Adjusted EBITDA Explained for Private Companies

Video Description

How to calculate normalized EBITDA when selling a business? How to calculate EBITDA to determine private company valuation? What is considered an EBITDA Addback/Normalization? How do I normalize my EBITDA? In today's video we will be discussing in detail EBITDA normalizations for buyers/sellers when dealing with private lower mid-market M&A transactions. We will be answering the following questions in more detail: 1) How to normalize your salary when selling your business? 2) What types of personal benefits/discretionary costs can be normalized? 3) Are COVID subsidies considered an addback? 4) Are gains/losses on equipment sales considered an addback? 5) Can I addback cost synergies/savings realized from equipment, technology and real estate investments? 6) What other common addbacks exist for EBITDA normalization purposes? EBITDA Rule of Thumb: Its always important to remember, a buyer is using your historical EBITDA to estimate the future cash flow they are buying and paying for. Any costs/revenues that are considered sustainable should be justifiable as an EBITDA addback however if the cost or gain is non-recurring, it would be excluded from the adjusted EBITDA. Interested in selling your Canadian business? Harmony Succession Partners (HSP) is an independent M&A advisory firm focused on selling Ontario-based companies valued between $3MM to $30MM. HSP has one of the largest databases of qualified family offices, private equity, strategic buyers and high net worth investors focused on acquiring lower middle market companies. In the last 5 years, our team has closed over 50 acquisitions totaling $250MM in value with a 95% closing rate. Our mission is to provide the highest client experience to business owners looking to sell their business. Please see our website below: https://www.harmonysuccession.com/ #MergersAndAcquisitions #familybusiness #canadianbusiness #sellbusiness #successionplanning #LOI #BusinessStrategy #Finance #M&A #DealMaking #CorporateFinance #Investment #businessforsale If you are interested in taking a deeper dive into a company you are looking to buy, you can book a 1-hour session with me! On this call, I can provide a more detailed analysis on the target company and provide suggestions on valuation, purchase price structure and how to position your bid in an auction scenario where you are dealing with a sell-side M&A broker. Click the link below to learn more: https://calendly.com/robert-bezede/60min_consulting_zoom