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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