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Large bulk valuation help


Bulk32

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I am as new as it comes to this business and wanted to reach out to see if I could get some information. 

I have recently sold a FedEx logistics route business due to many factors and have been looking for a different industry to get into. I have been vetting quite a few businesses including vending and it is a direction I want to go.

I have found a bulk route vending company that has over 1,000 higher end machines that has come up for sale and am highly considering putting an offer in. My question is: on a larger vending business that has good financial records is there a set net multiple that you would use in valuing the company like a traditional business or is there a different way to valuation these businesses.

I have familiarity with bread route valuation, Fedex route valuation, PF snack route valuation (ridiculous) but really wanted to hear from others who have been in the business for quite some time on this one . I have seen other smaller routes selling anywhere between 1-3x cash flow any help is greatly appreciated  Thank you

 

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Way to many variables to set a "standard" figure. Most bulk operators simply do not have very good records. Poor records leads to having to do serious due diligence. Always ask for tax filings ( state, local and fed), Ask to see records of commission payments, cancelled checks or signed copies of commission reports given to locations. If the seller cannot verify his stated income with his IRS filings he is lying about the rest. The "route" has a value, inventory on hand has a value, misc equipment like coin counters, vehicles, tools, parts, extra machines all have a value.

Basically: Can the route pay for itself and pay you a wage out of its provable income? If you are borrowing you will have to pay the note. If you are using your own money will it give you a decent return. AND pay you a wage. That is where you begin your valuation at. The "value" to you may be only 50% of gross, it may be an exceptional route and be "worth" 120% of gross. And then you have the other stuff like saleable goods, equipment.

Another thing, if you are a cash buyer you are in a very good negotiating position.

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