Acquisitions Anonymous - #1 for business buying, selling and operating - Does this moving company sell for $26M?!! - Acquisitions Anonymous 275

Episode Date: February 27, 2024

In this episode of Acquisitions Anonymous, Mills and Heather discuss the sale of a moving company based in Oregon and Washington, established in 1989. The company, with an asking price of $26 million, boasts a cash flow of $4 million and gross revenue of $31 million. It has expanded to over 10 strategic locations and offers services including office and business moving, military contracts, and storage solutions. The discussion covers the company's financials, growth strategies, and the operational complexities of the moving industry. They evaluate the valuation, the practicality of service expansions such as mobile storage and server farm moving, and the challenges of financing such a purchase. The conversation highlights the intricacies of buying and managing a large moving company, touching on seller financing, equity retention, and the potential for strategic buyer interest.You can check out the listing here: https://www.bizbuysell.com/Business-Opportunity/moving-company-with-client-diversity-in-packing-hauling-and-storage/2023125/Thanks to this episode's sponsors:Acquisition Lab and their team have been longtime supporters of the pod.Created by Walker Diebel author of Buy Then Build: How to Outsmart the Startup Game, is an accelerator with a highly vetted cohort-based educational and support community for people serious about buying a business.Acquisition Lab exists to help people buy a business and navigate all the complexities of the process, as well as provide a trusted framework, tools, and resources to support you from search to close.If you are serious about buying a business, check out acquisitionlab.com or email the Lab's director Chelsea Wood, [e-mail].-------------CloudBookkeeping offers adaptable solutions to businesses that want to focus on growth with a “client service first” approach. They offer a full suite of accounting services, including sophisticated reporting, QuickBooks software solutions, and full-service payroll options.Subscribe to weekly our Newsletter and get curated deals in your inboxAdvertise with us by clicking here Do you love Acquanon and want to see our smiling faces? Subscribe to our Youtube channel. Do you enjoy our content? Rate our show! Follow us on Twitter @acquanon Learnings about small business acquisitions and operations. For inquiries or suggestions, email us at [e-mail]

Hey, everybody. Welcome back to another episode of Acquisitions Anonymous. I'm Mills Snell, one of your co-hosts, me and Heather chat today about a really interesting moving business. Over $4 million in EBITDA, $26 million purchase price, $31 million in revenue. It's in the Pacific Northwest. 300 employees, I think like 8 to 10 locations, pretty interesting, mature business. We talk about a lot of the kind of quirks of the moving in storage business, the asset intensity, the way maintenance capets plays a role in, kind of diluting some of those earnings. Heather has some really helpful insight when it comes to the financing of something like this, how far maybe off the mark the realistic kind of valuation is from their perceived valuation. And we talk about a lot of things in detail that I think are super helpful, especially if you're looking at businesses in this kind of three plus million dollar ebit dot range. So hope you enjoy the episode and stick around for a word from our sponsors. Hey, Michael here. Want to talk to you about today's sponsor for the episode, which is cloudbookkeeping.com.

So cloud bookkeeping is actually run by my neighbor, Charlie. So I've met him in person and can attest that he's a real human being and a good person. And what cloud bookkeeping does is offer a full suite of bookkeeping services all in the cloud for you around QuickBooks and other technologies that you're using as a small business owner. So if you're interested in getting the bookkeeping part of running a business off of your plate and focusing on running your business, Charlie and his team are one to call. They can put together a bunch of other stuff in terms of helping you manage and grow your business besides just bookkeeping, sophisticated reporting, definitely helping you get your quickbooks online set up in the right way, and a number of things around payroll as well. So definitely know them and recommend them. If you want to find out more about Cloud Bookkeeping,

you can go to their website at cloudbookkeeping.com, reach out to Charlie. I know many of you have and see if he can help you make running your business easier and more fun by letting them help with a lot of the bookkeeping solutions. And when you call, mention this podcast, it would help us and help Charlie know that we're supporting him as well.

So thanks a bunch. and cloudbookkeeping.com as the sponsor for today's episode. Welcome back, everybody, to another episode of Acquisitions Anonymous, Mills Snell. Hey, Heather, how are you? I'm good. I'm good. It's a cold Friday morning here in Southern California. Our version of cold.

Those are rare. Yeah, right. We have a lot of rain. Now it's cold. That's the way it goes sometimes. I think it's about to get warmer in South Carolina. It's been colder and it's going to get into the 70s. So that makes for fun times.

That's nice. That's nice. Ah, good. Well, it looks like you found a pretty interesting deal for us to talk about today. Yeah, it kind of caught my eye. I think it should be interesting. Okay, you want me to read it? Yeah, that's good.

I'll pull it up on the screen too and share it. All right. All right, I'll get to start. So we found this on Biz Buy Sell. It's a moving company with client diversity in packing, hauling, and storage. Asking price, $26 million. Cash flow, $4,340. Gross revenue, $31 million.

FF&E 10.4 million, established in 1989. This moving company has been serving Oregon and Washington for two decades, expanding in over 10 strategic locations. Their services range from office business moving, contracted military moves, some residential. They also offer packing, crating, and warehousing in their storage sites.

Consistently growing between 5% and 10% in revenue is attributed to their very strong organization chart of a PT resident CFO, leadership team, and regional managers. This allows for passive ownership with the current owner only needing to be present for two meetings per month, as all of his roles have been absorbed for the last several years. Conservatively projecting 31 million in revenue this year, they will earn 14% profit margin from the clear processes and procedures their divisions have in place. These include call centers, sales, and marketing,

and IT and drivers. The business has recently started a mobile pod division, allowing them to provide further services to different types of clients and continue the overall growth. Other opportunities include small, inexpensive acquisitions to expand the territory. Also, they are adding server farm moving,

oh, and hauling. Yeah. With their excellent reputation, as well as our existing client base and locations, they have a service area spanning across local, interstate and international clients. At a purchase price of $26 million, there's an option for the seller to not only provide a 10% seller carry, but also to retain 15% in equity if desired. This is being done to show the vested interest in the ongoing success of the business post-close.

Wow. So the real estate is leased. They don't give us the size or anything. There are 300 employees. That's pretty good size there. FFNE is included. facilities, assets included in purchase price, 10.4 million in vehicles, 7.5 in FF&E, working capital AR, 2.8 minus AP. This is very specific of 547, so a net of 2.262. Leasehold improvements, 460,000 prepaid expenses, 121. Recently launched mobile storage spots. They already said that. 10% seller financing. We said that. Cellar training period, six months to a year. retirement planning is the reason for selling and he owns commercial property, but I guess not this property.

So he's looking to deploy more capital. Okay. What do you think, Mills? This is really interesting. A lot of info. I mean, this is a kind of, I would say, not fully matured moving business, but, you know, definitely past the kind of early and adolescent stages.

I mean, they are doing work. It seems like maybe in multiple locations, but it's kind of hard to tell. But, you know, I think once moving companies get to the point where they're taking on storage, you know, there's signs of maturity there. It seems like they might be stretching a little bit to me with some of these things like, hey, we can grow via acquisitions and we're going to start, you know, moving data farms and things that, you know, sound like really enticing, but probably, are, you know, they're just different, they're very different animals.

Mobile, the mobile storage thing, like a mobile attic, you know, or things like that, pods, those are very tangential to what they're doing, but it is a very different business logistically and practically to go from, you know, managing movers to, you know, then also now, you know, managing a fleet of, you know, different heavy equipment and dropping these things off at people's houses and picking them up and moving them and things like that. Yeah, well, and I was kind of amazed that server farms are ever moved. And now I'm kind of fascinated by that. I guess they're good reasons for that to happen.

But I always thought they were sort of kind of stuck in place in a specialized piece of real estate that, you know, kind of exists forever. But, but obviously not. They do say that they've got regional managers. I think they said that in here somewhere. So it sounds like, oh, 10 strategic locations. Okay, okay. Two decades spanning over 10. So they've got 10 offices of some kind or locations, and they're serving this whole Oregon, Washington region.

And I do think they're pretty mature. I would guess if we wanted to sleuth it, it would probably not be that hard to figure out which moving company this is. You know, if you're in Washington and you need, it's a big moving job, not your, you know, apartment or something. A big commercial moving job. This is probably the go-to company for that. I like that they have military contracts or they've been serving the military. I think that shows also some signs of maturity that they can kind of get through whatever that process might be. Yeah.

Yeah, I think it's a pretty solid business. I don't know how, I mean, they've been growing 5 to 10% per year is what they've said. And it sounds like that's kind of been through these locations. You know, getting another one stood up in an area that they think is, you know, worthwhile. And so a buyer would have to sort of continue that if they want the growth to continue, unless they want us to kind of buy it where it is and stay there. It's got a nice ebata. I like it.

Yeah. I think you're right. You know, it's relatively easy if you know what you're doing to go into, you know, another market and kind of hit that semi-saturation point. There's already competitors. If you're elbowing your way in, you can still get a nice market share. but the amount of moving that goes on is, you know, kind of fixed in its supply. It, you know, is not hugely discretionary.

If, you know, it is very tied a lot of times to, you know, interest rates and what's going on, you know, in the housing market. If interest rates are low and people are moving a lot and there's a lot of housing activity kind of boom and bust, you know, there's a lot more, there's a lot more moves happening. As that slows down, that's why so many of these movers have gotten into the storage side. of things because why miss out on the recurring revenue and your customers are already saying, hey, I'm selling my house. I need to pack all this stuff up or pack it up for me. And my new house isn't going to be ready. We have to refinish the floors and paint or whatever and redo the kitchen. And it's going to take three months. And then that means it's actually going to take like seven. And so, you know, will you store it for us in the meantime? And it's a great, you know,

revenue stream that is more predictable. So I like elements. of it a lot. I would be very curious, you know, how absentee really is the owner, you know, what's going on kind of underneath the hood with the, with the team. But, and I guess in a way, you know, there's so much due diligence that has to happen around that and what kind of access do you get? If you're totally relying on the team at a business this size, you know, you're kind of thinking about something that's bigger and maybe more complex than owner operator, don't you think? I mean, yes, definitely. Yeah, this is someone, someone's got to have, they've got to retain that team, which is also kind of making me wonder, why didn't he try to sell it to the team that's running?

Yeah. I've seen that sometimes just, you know, based on the size of this, it may just be too big for, you know, for him to contemplate a management buyout or for them to contemplate it. Obviously, management buyouts happen all sizes of business. But to me, there's a level where a lot of times you see. there's kind of a no man's land, you know, in this kind of four-ish, you know, four to six million in EBITDA, where it's just a lot to swallow. It's a lot to figure out how to transition to the management team. Yeah, an ESOP, which we are seeing a little more lately. You know, we're seeing that sort of growing popularity, but they're not easy. You know, that's a difficult, that's a challenging transaction to put together. So, you know, maybe it could, maybe they looked into that. And like you said, it's just too big to fight off and too many moving parts.

And they would rather find an outside buyer. I think at this size, though, maybe a strategic buyer makes sense also, you know, from another region. Yeah. One thing I know, I think I've talked about, but my brother owns a moving company. And then I have some friends who own larger moving companies. And it's weird in terms of transactions around moving businesses and the kind of transferability of value. a lot of people in the moving business, I think are very hesitant to acquire.

And they're incredibly hesitant to acquire for anything more than just kind of the value of the assets. I've seen a lot of instances of that. Now, this business may have some kind of residual and transferable value in goodwill, maybe, you know, in a name. It doesn't seem like it's a franchise. You know, there's been some bigger ones

like college hunks, you know, hauling junk and two men in a truck and, you know, some of the others, it doesn't seem like that to me. I think they would have probably, you know, led with that or at least acknowledged it. But who knows? I think it's typically cost prohibitive to pay up because if you're, like, let's say you're a college hunks movers, you know, franchisee and you want to go grow into these markets, you kind of have a playbook already to run and you just go roll out that playbook and grow into these markets for a lot less than, you know, this kind of six-x multiple. That's what I was going to ask. Why won't they acquire strategically? And so really the barriers to entry, right? It's sort of, it's just too easy to go ahead and plop your, your next office

down over in that market and grow organically than it is to acquire, which is interesting because then that sort of says this business is vulnerable to that. And maybe, you know, even more so at the time of change of ownership that, you know, their competitors could realize, oh, this is a good time for us to try to come into those markets and pick up some of the business while they're going through their, you know, whatever, their difficulty during transition. So I always worry about that with any of my clients after they close. I try to do some follow-up calls just to see how those initial months are going.

because the smoother the transition, the less the risk of all those things, the competitors jumping in or your employees going to the competitors, the less the risk of that happening there is. But very interesting that the moving companies don't want to buy each other. I think that's a telling not so good sign, right? Yeah, yeah. Well, and I think they know, you know, like, okay, 300 employees,

they probably have, you know, 30 to 40, you know, trucks, if I had to guess. And, you know, those trucks are probably fully depreciated or close to fully depreciated. They are, you know, big, expensive items that, you know, they do depreciate fairly quickly in terms of their residual value. And, you know, these things are on the road all day, every day. They get up to, you know, hundreds and hundreds of thousands of miles. The founder, you know, mindset of most of these is let's squeeze every last drop out of the trucks. whereas more sophisticated, you know, operators who are up market, you know, they're usually

cycling assets, you know, more proactively, less downtime, less maintenance, less headaches, all those kind of things. It's also tricky once you grow multi-location for an asset-intensive business like this, you can't, you know, if you just had 40 pickup trucks or 40 box trucks in one market, you can have a mechanic on staff. It makes sense to pay for it. But if you're across eight or ten different markets that are all. all maybe an hour, you know, away or, you know, some of them several hours away, you're not able to insource that. You're having to outsource. And it's really expensive. And guess what? Usually when these trucks break, they're full of somebody's stuff. And they are like, I want my

furniture. And so you're, you know, having to pull two trucks up beside each other and offload one to the other and just kind of crazy stuff that is, is not fun. Yeah. Hey, everyone, this is Bill. I'm just taking a quick break from this week's episode to tell you about a long-time sponsor, major fan of the podcast, Acquisition Lab. So a lot of our listeners that you guys tune in every week for our deal reviews, you want to get in on buying a business, but you're not really sure where to start. The cool thing about Acquisition Lab is they were created to solve that problem.

So they exist to help people buy a business and also to navigate all the complexities of the process. They provide a trusted framework, tools, resources. They kind of support you all the way from. search while you're looking to buy a business all the way to close. So if you're serious about buying a business, you want to learn more about the process and you want someone to Sherpa you through buying a business, check out Acquisitionlab.com. Or you can email the Labs Director Chelsea Wood directly.

It's just Chelsea at buy, then build.com. Right. I can't imagine. And back to what the teaser says is that it says, you know, assets included in purchase price 10.4 million in vehicles. Well, that's got to be an original cost of the vehicles, not what they're worth today, which, you know, to your point, may be pretty close to nothing by the time you're buying this. Yeah. How long does a moving truck, if it's being used a lot, how long does it last?

Is it a three-year useful life? Or is it longer than that? No, it's longer than that. I mean, I think I'm kind of making this up because I don't have good hard data on it. But I would say in the probably plus, like, plus seven-year range. Some of these, though, and like it's really interesting when you, when these guys talk shop, like my brother and and some of my friends who own larger moving businesses when they talk shop, they're like, oh yeah, I got this like, you know, great old, you know, fill in the blank, whatever truck, like this international 26 footer. And they're like, oh, man, you can, you know, you can get those. They can go over half a million miles and all this stuff. So like, if you're a young business and you're scrappy and, you know, you can't just pay $250,000. or $200,000 for a box truck, you can get a lot of life out of them, but it's just expensive, you know, when they go down and it's not easy.

Right. And a good point. You can't have your own mechanic driving all over the region to service all those trucks. And then they go past their offices, you know, they've got a radius around there. So yeah, you probably are getting a lot of breakdowns all over the place, all over the region that you've got to have a network to manage a lot of expense. So, you know, the EBITDA here is probably not the right way to judge the cash flow once again. We shouldn't be adding back depreciation and not deducting almost the same amount for maintenance cap X. It's probably the same. It's probably equal. What's interesting for me in these businesses where they do have a lot of the maintenance cap X is being expensed. So you've got to kind of dig out

how much are they spending. It's already in the P&L. And then how much in addition to that might be kind of capital expense that I've got a reserve for buying. new trucks. I think that's always a hard exercise for a buyer to do because they don't have enough knowledge at that time to really estimate it. We all, we do our best,

but you're really guessing. Yeah, maintenance cap X is a guess for a buyer. Always. You're right, because it gets buried so often in, you know, the income statement. It's not just a clear, you know, it's not as easy as finding the asset purchases. Those are big lumpy ones. But, you know, hey,

we spent, you know, $12,000 at TMC transportation. Like, what is that? That was truck repair. That was tires, you know, or that was, you know, a transmission replacement or something like that. My brother kept having the problem where people would, they would cut the barbed wire fence and then steal batteries out of trucks. And it was incredibly disruptive because they'd, like, mess up the cables.

And so then my brother would have to tow his trucks to a place to get new cables put on and new batteries. And he's like, if you just left me a note and said, hey, you know, give me, give me like $10 for the recycling fee of the batteries. It would cost me a lot less. I will do that. Yeah. Yeah. Oh, that's terrible. Yeah. So lots of issues like that. But, you know, you know, back to like the CAPEX that's being expensed, I see lots of deals where, you know, it becomes a trust issue, right? You just have to trust the seller. They're going to tell you so-and-so's salary is half maintenance. of the fleet or the equipment or whatever it is,

and you don't know whether that's true. Yeah, yeah. And the other thing that I find when companies with a lot of fixed assets trade hands, is that the seller usually kind of has intimate knowledge of how to keep that equipment going. They really, you know, they can baby it along much better than the buyer who steps in and it all of a sudden breaks, you know, because we don't know how to do that. Yes. Oh, man.

that happens in my business a lot. You know, the sellers bought these things at an auction. You're talking about, you know, big expense, expensive, like 54-foot telehandlers, you know, that lift equipment up to the roof. And, you know, they bought them at an auction, got a good deal years ago. It paid for themselves just many, many times over. And, you know, when a hydraulic cylinder goes down, our mechanic, we have an in-house mechanic, he's like, hey, it needs to be replaced or whatever.

Or there's certain things that he can't do and has to. to get sent out. But the seller also, you know, my partner is like, oh, well, that's happened three or four times and here's the way we go about doing it most economically. Or while they're in there and tearing the whole, you know, boom arm apart, we need to get them to replace these pads and, you know, do X, Y, and Z, but they're not going to do that if we don't ask. It's just a lot of institutional knowledge around asset, you know, maintenance and protection and kind of stewardship that is very, very hard to pick up quickly. Absolutely.

So this is a, you know, you're getting this fleet of probably pretty old trucks. And like you said, where's the franchise value? If the other movers don't see it, you know, where's the franchise value? Is it a brand? Is it, you know, are these repeat customers? Is the military have contracts? Yeah, there's, it does seem like it's overpriced to me. I'm going straight to the price now.

Yeah, yeah. I think it's, you know, that's not the right. cash flow that you should be, you know, EBITDA is not the right number here. You've got to, you've got to figure out what the maintenance cap X is. And that's a whole big exercise. So we know that, you know, that cash flow we're looking at. What are they saying for, 4.3? You know, that's, I don't know, maybe it's 3.3. I'm even wondering if this business is probably, you know, trading, they're asking closer to 10 times because I think that the true free cash flow is going to be, I think it's going to be probably

sub three even possibly. Sub three, yeah. Okay. So, and once it goes sub three, then I, as a finance person, I have another red flag that goes up between two and three. Financing is like, it's a desert. There's nobody doing it. It's too big for SBA. It's too small for everything else.

And it gets really, really difficult to do. So yeah, I think this is a, this is a aspirational list price. the guy's not working that hard and he's like yeah sure if you can get me 26 million I'll sell it but uh you know I wonder if this one even trades because if if true if there's only a couple meetings a month why not just keep it yeah yeah or you know well and so it brings up another point so he mentions the real estate you know and and owns real estate and wants to deploy more more capital into real estate which is a you know I would say a predictable thing for an age owner. They want to be in, you know, less intensive assets. They want to be in, you know,

less volatile assets, those kind of things. But what I've found with business owners who own a lot of real estate that, you know, is not core to their business, they usually are the, the real estate holding entity is usually receiving a lot of benefit from the unaffiliated, you know, but commonly owned operating business. Maybe it's, you know, the bookkeeper, you know, or the property manager if it's in-house is kind of on staff or your maintenance guy, you know, hey, he does maintenance on our building, but he also does maintenance on, you know, the other buildings that the owner owns and things like that. And so sometimes it's hard to kind of pull that apart. I'm sure it would be found in due diligence, but it's something that I see repeatedly that, you know,

there's kind of some benefit that the real estate receives from the operating business. Yeah, good point. Commonly own, a common ownership, even though they're completely different businesses, you still have these entanglements, you know, in terms of the finances. And it gets, it gets tricky sometimes to unwind that and understand when we separate these, what is this cash flow really going to be? What are the hidden costs that I'm going to have to take over because they were being, you know, born over there by this other entity that the, that the seller owns. I think that's all a really good point. And there's lots of serial entrepreneurs sellers who have, you know, different industries, different businesses, but they may be kind of tangled up together more than you think.

This, this broker is also kind of interesting. We've talked about them before and I have a strong opinion. I don't know if you've heard us talk about when I got on my soapbox before you joined us, Heather and I was yelling it doesn't pencil. But they, this, you know, they are, they're well-meaning and they have a lot of distribution. They are far flung and they're based in the Midwest, but they pick up listings all over the place, like obviously in Washington and Oregon. And I think the price expectations are usually pretty high. And they almost kind of over-engineer the solution for you and say, hey, look, with the 10% seller note and the 15% role, you know, and, you know, these kind of financing terms, here's how you can afford to pay, you know, this. And they kind of, you know, do the math for you. But there was a particular instance in the past where they did that and just running the rough math on what the debt service obligations were going to be, it literally didn't pencil. And so I, you know, got, I got real inflamed about it. But, you know, you think $2.6 million, you know, or let's say $3 million even on this, on the level of debt that this would take after, you know, after maintenance cap X, I don't know that there's really much margin of safety.

for, I mean, maybe you clear, you know, one and a half times debt service coverage ratio, but it, I don't know. The rule of them that I use, just so I don't have to get out my calculator or my spreadsheet when I look at things, is if you're going SBA debt, because that's going to be a 10-year amortization, that's your longest. The rule of them at today's rates, because it always depends on that, too, is about 3.75 turns of EBITDA. So whatever you decide the right EBITDA is, multiply that by 3.75, and you probably shouldn't take more debt than that. Yeah. Just rule of thumb, you know, there could be nuances there to consider. But, you know, so that that's not a lot of debt relative to. Yeah.

And like you said, it's not four million of cash flow. It's really not that you can borrow on. It's more like three or could even be sub three. So you're saying, you know, under those rules of thumb, you know, you're at 11, you know, a little over $11 million worth of, you know, debt that can be put on the business serviceably. And then, you know, call it another turn or two of equity. And you're still, you know, $10 million below their purchase price expectations. Right.

And I actually have to shrink it again because it is $11 million. So remember, SBA only goes up to five. So that 10-year term isn't going to be there for you for this one. You're going to have to go with a five or a seven-year term if you're lucky. And so that that 3.75 is going to be more like three or sub three. Lenders will want it to be sub three unless you go with like a SBIC fund that's kind of high cost. So but yeah, the math is still the same. You know, it's like kind of just to have to know that rule of thumb about how many turns of debt can this, can EBITDA absorb at the different types of credit that I might use.

Yeah. And it helps you just kind of figure it out real fast. This is overpriced. There's no way. You're not going to bring in that much equity. You know, it's one of my favorite, and I've talked about it before on the podcast, it's one of my favorite kind of tools to use with an unrealistic seller expectation is, hey, this is how much, this is how much anyone can afford to pay for this business.

It's not unique to me. This is what is financeable. Short of, you know, an 800 pound national gorilla coming in and buying you and not putting any debt on it, any buyer you talk to who's like me, you know, the numbers have to work. you know, this is this is the most they'll be able to afford because this is a most, this is the most a lender will provide. And, you know, if you're hoping for somebody to come along and buy this business who just has $20 million of excess cash that they want to park somewhere, people who have that much cash usually don't buy businesses like this.

So moving businesses. Yeah. Yeah. So, you know, are those people out there? Yes. But, you know, this is probably isn't the type of thing they're going to buy. And they don't pay, you know, they have price discipline and, you know, on and on and on. So I do think on the positive side, I mean, I do think that it seems like the seller has done some things to get the business ready for him to be away from it. And it may just be that he kind of says, hey, if I don't get the price I want, I just keep doing what I've been doing. That doesn't work forever. You know, at some point you got, you know, trust, you know, and estate issues that have to be solved, you know, because at some point everybody exits, but it does at least seem like a head nod towards, you know, some

preparation. And it seems like a really, you know, interesting operating entity that has cleared some big hurdles. So I would say kudos to them in a lot of ways. I just think it can't transact for this level unless there's a strategic. And I don't think those are out there for this. Absolutely. Yeah. Like you said, you've got to, if you know the financing markets and you don't have to get into the weeds. You just have to know like these little rules of them and what are the different types of debt I could use. And what's the number, what's the terms of EBITDA I could borrow in each type? And you explain that to a seller. And, you know, there's no point in listing something that there's no market for. There's no way to finance it, you know, at that at that valuation. So I think

that's a really good technique. All right. Well, good. Well, that was a fun one. Heather. Thanks for bringing, you know, some really good insight. I need like an update every time. interest rates change as to where that rule of thumb goes. Okay, we should have like a sliding scale and show you what, you know, it's now here. Yeah, a little dial or something. We should do that. That's really helpful, though. So I'm glad you brought that insight and helped us think through the financing part of this too.

Well, thanks, everybody for tuning in and hope you enjoyed the episode. We'll see you next time.