To fund the growth of his other business, Jorn Docter decided to put NederlandReview on display. He posted a sales profile on Brookz, which was viewed 973 times and generated 37 responses. Within a few months, the sale of his business was complete.
What does your business do?
'NederlandReview is a national collection site for reviews, experiences, feedback and complaints about all businesses, stores and online stores in the Netherlands. The big difference with other review platforms is that we are independent. The businesses reviewed do not pay us directly to be on the website, but we work on an affiliate basis.'
Why did you want to sell a business?
"We started HollandReview in June 2015. But the further development of such a platform takes a lot of time and a lot of money. In addition, we were running another business, Magic Hospitality Manager, which we wanted to invest extra in ourselves. Then me and the two other shareholders asked ourselves whether we wanted to continue in the current way or whether faster growth could be achieved by selling NederlandReview.
How did you end up at Brookz?
'Via-via I heard about Brookz. I knew nothing about selling your business, but came across valuable information on the website. In addition, I saw that there were hundreds of businesses for sale, which made me feel confident that I could sell my business through Brookz.
What is your experience with posting a sales profile on Brookz yourself?
"Placing a sales profile was fairly easy for me. We had already written an information memorandum, so drafting the sales profile went pretty smoothly as a result. I deliberately put 'with 85% net margin' in the title of the sales profile, because that kind of figure naturally piques the interest of buyers.
How did the sales process go?
"After publishing my sales profile, the responses poured in. I eventually lost count. But I neatly answered all responses from interested buyers and added a confidentiality agreement, should they wish to receive more information about the business. That already yielded an initial screening of about 50 percent. After sending the full information memorandum, another 50 percent or so dropped out. We then held talks with three interested buyers. The final buyer was Cherry Group, a group of businesses in the field of marketing and communications. With them we had a good personal click and the best feeling that our platform is in good hands.
How did you determine the value and price?
'The asking price was made up of net profit x a multiple, plus an earn-out based on future growth. We proposed that earn-out ourselves as sellers. We firmly believe in the potential of the platform. And since we ourselves are working on NederlandReview for another year to ensure a good transfer, we dared to accept that earn-out.'
Do you have any tips for other selling entrepreneurs?
'Don't just look at the money, look at the buyer. We received an offer from another interested buyer. That offer consisted of a cash takeover price in exchange for a direct acquisition. But our gut still told us not to do that. We only realized how important we thought the buyer was when we were actually faced with that choice.
This is what Jorn's sales profile on Brookz looked like:
Review platform with 85% net margin
SaaS platform with high growth potential and spectacular profit margin
REVENUE
€ 584.000
EBITDA
EBIT € 495,000
NUMBER OF EMPLOYEES
1
REGION
Not site-specific
SECTOR
IT, online & e-commerce
Other
TYPE OF CUSTOMERS
B2C
PROFILE NUMBER
#28973
RIGHT FORCE
B.V.
An online review website with independent and transparent platform. An important difference with other parties is that this platform is not paid directly by the reviewed businesses (which would give a conflict of interest), but indirectly through a network of affiliates, with limited influence of the reviewed businesses.
Details
A business with a very low-maintenance (automated) website and very low labor costs, resulting in a spectacular margin. (85% net margin in 2019). The business has grown over the past 5 years, every year by (at least) 50%. Without too much effort, the business can be run with less than 2 employees. With more effort, even higher growth can be achieved compared to the forecast according to the current owners.
Revenue.
Revenue in 2019 was €584,000 with a net profit of 85%. For 2020 it is projected at € 749,000 with an EBIT of about 84%.
Landscape
The webshop offers the new owner a firm foothold in the online review landscape and a very good basis for tremendous growth.
Affinity
Affinity with SEO e-commerce is desired, but not necessary. This knowledge can be transferred.
Equity
To qualify as a prospective buyer, candidates must have sufficient equity.
Reason for sale
The current entrepreneurs have another business in a completely different industry and want to invest in the other business with the sale.
Interest offered
The seller wishes to sell the entire business (100%). If interested, a sales memorandum can be submitted after signing a confidentiality agreement.
This company is of interest to strategic buyers/investors. The business is also interesting for entrepreneurial MBI candidates with knowledge of this sector.
