Lead Today entrepreneur Robert de Boer responded to a sales profile on Brookz, which was viewed 228 times and generated 14 responses. Three months later, the deal was done and he had acquired a customer portfolio from an online marketing agency.
What does your business do?
'Lead Today is a consulting firm that helps businesses grow through marketing and sales optimization, with a strong focus on lead generation. We do this primarily for businesses with B2B services and charities.'
Why did you want to buy a business?
'I noticed during the corona crisis that one of our three pillars was doing above average. In the areas of strategy and technology, assignments were temporarily postponed. But our online marketing branch was busier than ever before. Then I asked myself the question: how can we grow even faster there? One answer was by acquiring a business or a customer portfolio.'
How did you end up at Brookz?
"For another business of mine I had already found a financial partner through Brookz. So for this issue, I again went to Brookz s database of businesses for sale. After a quick search, I came across the profile of an online marketing agency that wanted to part with some of their clients.'
How did the buying process go?
'I responded to the sales profile and got a response from the offering party within a day. The selling entrepreneur immediately said he had interest from many buyers, but also wanted to talk to me. During the first conversation, there was quickly a personal click and we saw that the types of customers of both businesses were a good match. We had some charities as clients and the portfolio of clients offered also consisted largely of charities. That aspect provided an advantage for us because the salesman wanted to hand over his customers with a good feeling. Some clients he has known for more than a decade and still meets on a personal level. So the highest price was definitely not the main goal. That ensures that you both have the customer's best interests at heart.'
How did you determine the value and price?
"I put all the customers in an Excel file and indicated per customer what I wanted to pay for it. I looked at the type of subscription, the current service and in what area I could expand the service after the acquisition. This resulted in a bid factor, which I multiplied by the customer's annual turnover. Actually a simple calculation.
Do you have any tips for other buying entrepreneurs?
'Pay special attention to the click with the seller. I responded twice to another profile on Brookz and when I think back to that now, those were not open conversations. As if the selling entrepreneur was wary and purely financially driven. When there is trust on both sides of the table, an acquisition works much more pleasantly.
This is what the sales profile on Brookz to which Robert responded looked like:
Portfolio full service online marketing agency
Ideal extension for online marketing agencies with ambition
REVENUE
€ 1.200.000
EBITDA
EBITDA € 210,000
NUMBER OF EMPLOYEES
6-10
REGION
West Netherlands
SECTOR
IT, online & e-commerce
Business services
TYPE OF CUSTOMERS
B2B
PROFILE NUMBER
#29031
RIGHT FORCE
B.V.
Well-run online marketing agency based in the Randstad. Founded almost 20 years ago and specializing in custom development. Around 300 clients in the SME sector. Delivers full service solutions in the field of online marketing and e-commerce:
- Design
- Development
- Online marketing (SEO/SEA)
- Hosting
Reason for sale
The business wishes to split up to focus on one customer group and is going to part with some of its customers/services. This is therefore a transaction where only the customers are taken over. Ideal as an extension to an existing business. Possibly it can be discussed to invite some employees to also join the buying party, if they are open to it.
Custom solutions
The business specializes in custom solutions and integrations and has many successful customers in the SME and not-for-profit sectors. Stable growth of about 10% per year over the past few years without much acquisition.
Good to know:
- All clients who have a website hosted by the business use a custom CMS and pay monthly subscription fees for it.
- Revenue is based on ongoing agreements with clients, many of whom have been with the business for years
- All hosting, online marketing and other licenses are based on continuing agreements (see below).
Turnover data 2019:
- Hosting (domain registration, reseller web servers, SSL). approx €145,000.
- Online marketing (SEO, SEA and content marketing). Approx. €385,000.
- License CMS and other subscriptions approx. €205,000.
The business stands out in a number of ways:
- The customer base is loyal and stable. The company is committed to placing loyal customers with a good business that subscribes to the same values. That is an important factor in choosing the ideal acquisition candidate.
- There are a number of partners with whom customized links have been developed. An acquirer can use these partnerships to scale up its customer base.
- Almost all clients have come to the business through word of mouth over the past 18 years. As a result, growth is steady and clients are connected to the business.
- The ideal buyer takes over the entire part of the customer portfolio for which there is no more room in the new organization and no separate parts
- EBITDA forecast for 2020 is €210,000 on revenue of €1,150,000
The schedule envisioned:
- The goal is to complete the acquisition in the current year so that all clients will be housed with a new party by 2021.
The seller wants to sell the entire business (100%).
The selling entrepreneur indicates that he is open to both 1) a Share transaction and 2) an Asset transaction. This for discussion by mutual agreement.
This company is of interest to strategic buyers/investors. The business is also interesting for entrepreneurial MBI candidates with knowledge of this sector.
