Bill D’Alessandro (@BillDA) is joined by Mehtab Bhogal (LinkedIn link) DTC eCommerce specialist to talk about distressed acquisitions & turnarounds, operations, capital structures, downsizing for quality, finding a business partner on Reddit, why makeup brands suck, and much more.
We discuss a Bankruptcy deal, BH Cosmetics, linked below.
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Acquisitions Anonymous Episode 89
Show Notes:
(0:00) Intro
(1:00) Cloudbookkeeping.com
(2:09) Mehtab's introduction
(4:23) Why do you buy a business to downsize it? [Episode clip for wednesday]
(6:14) What is your general path after acquiring a business?
(7:21) What does the cap structure look like pre vs. post-close?
(10:23) How do you handle the Equity?
(15:39) Let's jump to the Deal: BH Cosmetics.
(18:14) Revenue trajectory
(21:19) What is a 363 auction?
(23:16) What does the process look like?
(24:17) What do you think about this deal from a diligence and structure perspective?
(26:52) How well do you know the business at the bidding stage?
(28:26) Let's say you give it a go, how do you decide what the proposal is going to be for lenders and equity holders?
32:00 DIP loan: Debtor in possession financing [Clip]
(32:43) What is the downside risk here? How does Karta add a layer of coverage?
(34:46) Let's take about the operation side: How do you start a turnaround?
(40:02) What are specifics about diligence for your company? Why are product teams so important?
(44:05) BH got purchased at $4Mio. Was it expensive?
(48:35) Tell us about the Return Profile, & how does it relate to equity value?
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Links:
* BH Cosmetics Deal Link
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Past guests on Acquanon include Nick Huber, Brent Beshore, Aaron Rubin, Mike Botkin, Ari Ozick, Mitchell Baldridge, Xavier Helgelsen, Mike Loftus, Steve Divitkos, Dzmitry Miranovich, Morgan Tate and more.
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Additional episodes you might enjoy:
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