The benefits of buying companies are vast. In this article, I will explore the reasons for buying a company today that will benefit your company in the future. There is an entire industry built around the idea of “buy to sell,” — private equity.
Many of the people reading this today are strategic plumbing distribution owners/operators. Without going into too much detail, plumbing distribution wholesale businesses are selling from 4.5-7x EBITDA for companies under $50 million, while the larger plumbing wholesale businesses are selling for 6-7x+ EBITDA. If you are a larger plumbing wholesale company, buying a smaller wholesaler will immediately be accretive to the value of your business.