Northwind Climate Systems
Commercial HVAC & refrigeration services · Sherwood Park, Greater Edmonton, Alberta
What's in this deal book
The transaction in one view
The investment case
The condensed thesis: a recurring-revenue services business, acquired with modest leverage, deleveraged from its own cash flow, and re-rated at exit.
Buy the annuity, deleverage it, re-rate it
62% recurring
Maintenance contracts renew above 90%. The cash flow that services the debt is contracted.
Margin expansion
Repricing legacy contracts and a first sales function lift EBITDA margin from 26% toward 30%.
Debt-free by Yr 4
Free cash flow sweeps the acquisition debt to zero, moving enterprise value to equity.
3.0× to 4.0×
A larger, professionalized, recurring-heavy business exits to a strategic or consolidator.
An essential service, sold on contract
Northwind installs, services, and maintains HVAC and commercial refrigeration for roughly 480 commercial accounts across the Greater Edmonton area. Most revenue is scheduled maintenance under renewing agreements, with emergency call-outs and project installs on top.
Non-discretionary demand, structural retrofit cycle
It has to keep running
Commercial refrigeration and HVAC are essential. A failed cooler means spoiled stock by morning, and a dead furnace closes a dining room. Owners defer plenty in a downturn, but not the system that keeps the business trading, so service spend holds through the cycle.
Refrigerant phase-down
Rules phasing out older refrigerants force a multi-year wave of retrofits and replacements across the installed base. The work is driven by the regulation, not by the customer's mood, which pulls forward years of upgrade and install jobs.
Owner-operator tail
The market is a long tail of small one-van operators, and the same retirements taking Dale out of this business are taking dozens of them out too. Each one is a cheap bolt-on for a larger, professionalised owner at exit.
Steady growth, expanding margin
Revenue & EBITDA
C$ thousands · FY23 to Year 5 (Year 1+ projected)
EBITDA margin
Percent of revenue
What is being sold
A going concern acquired debt-free / cash-free at $1.95M, roughly 3.0× adjusted EBITDA. The founder is retiring and offers a structured transition.
- 480 active maintenance and service accountsand the recurring contracts behind them
- Trained field team and 8-van fleetGM and two lead techs stay through the sale
- Brand, phone number, supplier accounts, licencesand approved-vendor status with property managers
90-day handover + vendor take-back
The founder stays for a structured 90-day transition and carries a $0.30M seller note, keeping the seller aligned through the handover of relationships and systems.
Sources & uses of funds
Sources
| Senior term loan | $1,050K | 49% |
| Seller note | $300K | 14% |
| Sponsor equity | $800K | 37% |
| Total | $2,150K | 100% |
Uses
| Purchase price (3.0×) | $1,950K | 91% |
| Transaction fees | $120K | 5% |
| Working capital & min cash | $80K | 4% |
| Total | $2,150K | 100% |
Where the equity return comes from
Equity value bridge
C$ thousands · entry equity to exit equity
An individual buys the cash flow. A strategic buys the annuity, the cross-sell, and the multiple.
Northwind Climate Systems
A written walk through the investment case, one page for each part of the deck. The detail behind each page, the schedules and workings, sits in the supporting documents that follow.
The deal in one paragraph
Buy a business that gets paid to keep essential equipment running, use its own cash to clear the debt, then sell a bigger, cleaner version of it.
Most of Northwind's revenue is scheduled maintenance under contracts that renew above 90%. That is the annuity. It is the cash flow that pays down the acquisition debt, and it holds up in a weak economy, because a grocer cannot let a cooler fail overnight.
The return stacks from three places: earnings grow as under-priced contracts are brought to market and a first salesperson is added, the debt falls to zero from the company's own cash by year four, and a larger, recurring-heavy business sells for a higher multiple than it was bought at. That is roughly 5.8 times the money in, and about 42% a year over a five-year hold.
An essential service, sold on contract
Northwind installs and maintains heating, cooling and commercial refrigeration for about 480 businesses around Edmonton.
The work is not optional. When a restaurant's refrigeration or a shop's heating fails, it gets fixed that day, and most of it is booked ahead on a maintenance plan. Emergency call-outs and one-off installs sit on top of that contracted base.
The company has traded for 18 years, runs an 8-van fleet with 14 staff, and earns a 41% gross margin. A general manager already runs the day to day, so delivery does not depend on the retiring owner.
Steady by nature, busier for a while
Demand here is steady by nature, and two forces make the next several years busier than usual.
Commercial refrigeration and HVAC are essential, so service spending holds through good years and bad. That is what makes the earnings dependable enough to borrow against.
On top of that, rules phasing out older refrigerants are driving a multi-year wave of retrofits across the installed base. And the market is full of small one-van operators with no succession plan, which becomes a supply of easy bolt-on acquisitions for a larger owner later.
Growing, and the margin is widening
Revenue has grown steadily, and the margin is getting wider, not thinner.
Revenue moves from about $2.06M three years ago to $2.45M today, and the plan carries it to $3.68M by year five. Adjusted earnings are $640K today, a 26% margin, and the plan lifts that toward 30%.
The margin holds because pricing is set inside the maintenance contracts rather than won on a fresh competitive bid each time. That is why the last three years widened the margin instead of eroding it.
What the buyer is actually getting
A complete, running business, debt-free, for $1.95M, about 3.0 times its adjusted earnings.
The sale includes the 480 active accounts and the contracts behind them, the trained field team and the 8-van fleet, and the brand, phone number, supplier accounts and approved-vendor status with property managers. The GM and two lead technicians stay on.
The founder is retiring but stays for a 90-day handover and carries a $0.30M seller note, so he keeps money at risk while the relationships and systems pass across.
How the purchase is funded
The $2.15M needed is funded with bank debt, a seller note, and the buyer's own equity.
A $1.05M senior loan and a $0.30M seller note cover most of it, with $0.80M of buyer equity on top. The buyer puts in about 37% and borrows the rest at a modest 2.1 times earnings. The money pays the $1.95M price, $0.12M of fees, and $0.08M of working capital.
The leverage is deliberately light. It leaves a comfortable cash cushion to cover the debt every year, above 1.6 times, while still clearing it in full within five years.
Where the return comes from
The equity roughly six-times over five years, and it is worth being plain about where that comes from.
About $1.38M comes from growing earnings, about $1.35M from paying down the debt with the company's own cash, and about $1.10M from selling at a higher multiple than the entry. That turns $0.80M of equity in into about $4.6M out.
The exit does not rely on a hot market. An individual would pay for the cash flow alone; a strategic buyer or consolidator pays more for the recurring base, the cross-sell and the multiple that comes with size. Either buyer clears the plan.
Supporting documents & data room
The detail behind the memo: the company and its history, the people, how revenue is earned, the customer base, operations, the value-creation plan and the risks, plus the staged data room that holds every supporting file.
Eighteen years of building a service book
Dale Whitmore, a red-seal refrigeration mechanic, started Northwind out of his garage in Sherwood Park in 2008 on one idea: service what you sell, and answer the phone at 2am. The recurring model took hold with an anchor grocery contract in 2012, and the company has grown steadily since.
How revenue is earned
Revenue by contract type
Majority contracted and recurring, TTM
Scheduled maintenance
Annually renewing agreements, retained above 90%. The base that makes the earnings predictable.
Emergency & call-out
Higher-margin reactive work, largely pulled through the maintenance relationship.
Installs & retrofits
Lumpy equipment work that feeds the next maintenance contract.
Where the 41% gross margin comes from
| Revenue line | % of revenue | Gross margin | Character |
|---|---|---|---|
| Scheduled maintenance | 62% | 44% | Recurring, contracted |
| Service & emergency | 24% | 46% | Reactive, high-margin |
| Project installs | 14% | 28% | Lumpy, equipment-heavy |
| Blended | 100% | 41% | Contracted labour + parts markup |
Diversified, contracted, and sticky
Revenue by customer sector
TTM, share of revenue
Once a system is on a maintenance contract, switching means re-qualifying a vendor for equipment that cannot be allowed to fail. Retention holds above 90%.
Not owner-dependent for delivery
The founder's role is relationships and oversight. Delivery runs through the GM and two long-tenured lead technicians, all of whom intend to stay through the sale.
An organized route business
- 8-van fleet on planned routesacross Sherwood Park, St. Albert and Greater Edmonton, ~120 km radius
- Service-management softwarescheduling, work orders, and the maintenance-contract calendar
- 24/7 emergency responsethe reason grocery and cold-storage accounts stay on contract
- Two vans due for replacement~C$140K capex, budgeted in the plan
Five levers, none of them heroic
- Reprice legacy contracts to market.~15% of contracts sit below current rates. Pure margin, no new customers.
- Add the first sales function.All growth to date is inbound and referral, in a market with steady commercial demand.
- Bring refrigeration overflow in-house.Work referred to subcontractors today is margin walking out the door.
- Extend the service map.The Leduc and Red Deer corridor is within reach of the existing fleet.
- Launch monitored service plans.Sensors on commercial refrigeration, sold as a premium uptime tier.
What could go wrong, and the answer
90-day handover, a vendor take-back keeps the seller aligned, and the GM already holds many relationships.
Retention plan and incentives for the two lead techs in the first-100-days plan.
Largest client under 8%; top-10 at 40%; retention above 90%. Concentration risk is low.
No single supplier over 20%; parts and equipment are substitutable across national distributors.
62% contracted, non-discretionary essential service. Spend holds through cycles.
Modest 2.1× leverage, DSCR above 1.6× throughout, debt-free by year four.
The evidence room, released by trust stage
The teaser is open to anyone. Financials and customer contracts unlock the moment a mutual NDA is signed. The confirmatory file, bank statements, unredacted contracts and a buyer-run quality-of-earnings, opens in the final room once a buyer is exclusive. That staging is the point: the seller controls disclosure, the buyer sees exactly what is available and what comes next.
Mutual NDA
Two pages, standard mutual terms. Signing unlocks the financial statements, the contract register and the customer file in the index.
Every document, and where it sits
| Document | Fmt | Access |
|---|---|---|
| Corporate & legal | ||
| Certificate of incorporation & articles | Available | |
| Minute book & directors' resolutions | 🔒NDAAvailable | |
| Share register / cap table | 🔒NDAAvailable | |
| Business & contractor licences | Available | |
| Refrigerant handling (ODS) permits | Available | |
| Financial | ||
| Financial statements FY23–FY25 | 🔒NDAAvailable | |
| YTD + TTM management accounts | XLSX | 🔒NDAAvailable |
| Adj. EBITDA / ODE bridge + add-backs | XLSX | 🔒NDAAvailable |
| Corporate tax returns (T2), 3 yrs | 🔒NDAAvailable | |
| AR / AP aging + revenue by customer | XLSX | 🔒NDAAvailable |
| Bank statements, 12 months | On request | |
| Revenue & commercial | ||
| Contract register (terms, renewals) | XLSX | 🔒NDAAvailable |
| Sample maintenance agreements (redacted) | 🔒NDAAvailable | |
| Customer list (coded) + concentration | XLSX | 🔒NDAAvailable |
| Backlog & install pipeline | XLSX | 🔒NDAAvailable |
| Full unredacted contracts | On request | |
| Operations | ||
| Fleet & equipment schedule | XLSX | Available |
| Field-service software data export | CSV | 🔒NDAAvailable |
| Supplier list & key terms | 🔒NDAAvailable | |
| KPI pack (first-time-fix, utilization) | Available | |
| Document | Fmt | Access |
|---|---|---|
| People & HR | ||
| Org chart & employee roster | Available | |
| Employment & non-compete agreements | 🔒NDAAvailable | |
| Compensation & benefits schedule | XLSX | 🔒NDAAvailable |
| Key-person retention plan | 🔒NDAAvailable | |
| WCB / safety records | On request | |
| Legal & compliance | ||
| Insurance policies & loss runs | 🔒NDAAvailable | |
| Litigation & claims history | 🔒NDAAvailable | |
| Permits & environmental compliance | Available | |
| Warranty & callback obligations | 🔒NDAAvailable | |
| Assets & property | ||
| Real-estate lease (shop & yard) | Available | |
| Vehicle titles & leases | Available | |
| Equipment & tooling register | XLSX | Available |
| IP, brand & domains | Available | |
| Transaction | ||
| Confidential information memorandum | Available | |
| Draft asset purchase agreement | 🔒NDAAvailable | |
| Net-working-capital peg method | XLSX | 🔒NDAAvailable |
| Vendor take-back / earnout terms | 🔒NDAAvailable | |
| Quality-of-earnings (buyer-run) | On request | |
Valuation
A cash-flow valuation, built up from normalized earnings and owner's discretionary earnings, cross-checked against transaction multiples.
Valued on cash flow, not headline profit
We value Northwind on the cash it produces. Reported profit is first normalized to owner's discretionary earnings (ODE), then a discounted-cash-flow model on a conservative fair-value base case establishes intrinsic enterprise value. Transaction multiples provide a cross-check.
From reported profit to owner's discretionary earnings
Normalization bridge
C$ thousands · TTM
| Reported pre-tax profit | 265 |
| + Interest | 108 |
| + Depreciation & amortization | 95 |
| = Reported EBITDA | 468 |
| + Owner salary & benefits | 120 |
| + Owner discretionary (vehicle, travel, insurance) | 32 |
| + One-time / non-recurring | 20 |
| = ODE (owner-operator basis) | 640 |
| − Market-rate replacement manager | (125) |
| = Institutional adjusted EBITDA | 515 |
ODE frames the owner-operator (SDE-style) 3.0× asking multiple. Institutional adjusted EBITDA deducts a fully-loaded replacement manager, since a financial buyer cannot capture the owner's unpaid labour.
Conservative fair-value base case
| C$ 000s | Yr1 | Yr2 | Yr3 | Yr4 | Yr5 |
|---|---|---|---|---|---|
| EBITDA (3% organic) | 659 | 679 | 699 | 720 | 742 |
| − D&A | (95) | (95) | (95) | (95) | (95) |
| − Cash tax @25% | (141) | (146) | (151) | (156) | (162) |
| + D&A back | 95 | 95 | 95 | 95 | 95 |
| − Capex | (95) | (95) | (95) | (95) | (95) |
| − ΔNWC | (3) | (3) | (3) | (3) | (3) |
| Unlevered FCF | 420 | 435 | 450 | 466 | 482 |
Fair-value case grows ODE 640 at 3%/yr, distinct from the value-creation plan (710→1,100) used for returns and debt.
Discount rate build-up
Small private-company cost of capital
Enterprise value ≈ $2.08M
| C$ 000s | FCF | × | PV |
|---|---|---|---|
| Year 1 | 420 | 0.813 | 342 |
| Year 2 | 435 | 0.661 | 288 |
| Year 3 | 450 | 0.537 | 242 |
| Year 4 | 466 | 0.437 | 204 |
| Year 5 | 482 | 0.355 | 171 |
| PV of explicit FCF | 1,246 | ||
| Terminal value (g=2.0%) | 2,341 | 0.355 | 831 |
| Enterprise value | 2,077 |
Sensitivity — EV ($000s)
Discount rate × terminal growth · active cell highlighted
| r ↓ / g → | 1.5% | 2.0% | 2.5% |
|---|---|---|---|
| 21% | 2,269 | 2,299 | 2,331 |
| 22% | 2,156 | 2,183 | 2,211 |
| 23% | 2,054 | 2,077 | 2,102 |
| 24% | 1,961 | 1,981 | 2,003 |
| 25% | 1,876 | 1,894 | 1,913 |
What HVAC & refrigeration service books trade for
| Target (type) | Yr | Region | Revenue | EV/EBITDA |
|---|---|---|---|---|
| Refrigeration maintenance co. | 2023 | Pac. NW | $4.8M | 3.9× |
| HVAC install + service | 2022 | Alberta | $6.5M | 4.2× |
| Facilities / HVAC maintenance | 2023 | US Midwest | $5.0M | 3.6× |
| Commercial HVAC service co. | 2024 | W. Canada | $3.1M | 3.4× |
| Mechanical services (recurring) | 2024 | Ontario | $2.2M | 3.1× |
| Owner-operator HVAC (break-fix) | 2024 | Prairies | $1.4M | 2.6× |
| Median | 3.5× |
Illustrative SME HVAC / refrigeration-services transactions. Recurring-contract-heavy books trade at the top of the range; price-led break-fix at the bottom.
The asking price against every lens
Dashboards & forecasts
The financial picture today and the five-year plan behind the returns.
The business on one screen
Three years of financial history
| C$ thousands | FY23 | FY24 | TTM |
|---|---|---|---|
| Revenue | 2,060 | 2,280 | 2,450 |
| Cost of services | 1,236 | 1,345 | 1,446 |
| Gross profit | 824 | 935 | 1,004 |
| Gross margin | 40.0% | 41.0% | 41.0% |
| Operating expenses | 470 | 505 | 536 |
| Owner adjustments | 150 | 160 | 172 |
| Adjusted EBITDA / ODE | 504 | 590 | 640 |
| EBITDA margin | 24.5% | 25.9% | 26.1% |
Revenue and EBITDA plan
Revenue & EBITDA
C$ thousands · value-creation plan
| C$ 000s | Y1 | Y2 | Y3 | Y4 | Y5 |
|---|---|---|---|---|---|
| Revenue | 2,650 | 2,880 | 3,130 | 3,400 | 3,680 |
| EBITDA | 710 | 800 | 900 | 1,000 | 1,100 |
| Margin | 26.8% | 27.8% | 28.8% | 29.4% | 29.9% |
| FCF to debt | 315 | 442 | 560 | 677 | 780 |
Revenue ~8.5% CAGR; EBITDA grows faster as margin expands from repricing and operating leverage.
Free cash flow retires the debt
Net debt paydown
C$ thousands · debt-free by year 4
Free cash flow to debt
C$ thousands · after interest, tax, capex
~5.8× MOIC, ~42% IRR over five years
Equity cash flows
C$ thousands · sponsor equity in and out
| Exit × | Exit equity | MOIC | IRR |
|---|---|---|---|
| 3.0× | $3.55M | 4.4× | 35% |
| 3.5× | $4.10M | 5.1× | 39% |
| 4.0× base | $4.65M | 5.8× | 42% |
| 4.5× | $5.20M | 6.5× | 45% |
| 5.0× | $5.75M | 7.2× | 48% |
Entry fixed at 3.0×. Even at a flat exit multiple, deleveraging and EBITDA growth alone return 4.4×.
Competitive landscape
A fragmented, essential-service market where recurring density and refrigeration expertise are the moat.
Who Northwind competes with
| Competitor archetype | Scale | Focus | Note |
|---|---|---|---|
| National HVAC franchise | Large / multi-city | Project + light service | Brand and pricing; thinner local service & refrigeration depth |
| Regional mechanical contractor | Large regional | Construction / project | Big install book; recurring service is secondary |
| Western refrigeration specialist | Mid regional | Recurring + refrigeration | Closest direct competitor — overlapping grocery/cold-storage base |
| National industrial refrigeration | National | Industrial projects | Deep on large jobs; not focused on 480-account route density |
| Small owner-operators (2–5 vans) | Small / local | Break-fix, price-led | Cheap; limited 24/7 cover, thin bench, succession-fragile |
| National facilities-management bundler | Large | Bundled FM contracts | Wins on procurement; subcontracts trade work, variable quality |
Recurring-led and high-touch
Northwind sits in the upper-right: recurring-contract-led and high-touch, more service-dense and refrigeration-specialized than the project-led nationals, and more reliable and succession-proof than the small owner-operators.
Why a new entrant cannot easily win the base
Approved-vendor status
On the preferred-contractor list for several property managers, which takes years to earn and gates new entrants.
HVAC + refrigeration
One vendor for both, with red-seal refrigeration depth most HVAC-only competitors lack.
Contracted & sticky
Once a system is on a maintenance contract, re-qualifying a vendor for equipment that cannot fail is a high bar.
Working capital
Customer and supplier concentration, receivables, and the light, self-funding working-capital profile.
Top 10 customers — none over 8%
| Customer | Sector | % rev |
|---|---|---|
| Prairie Fresh Markets | Grocery | 7.8% |
| Northlands Hotel Group | Hospitality | 6.2% |
| Glacier Cold Storage | Industrial | 5.4% |
| Edmonton Co-op Food | Grocery | 4.6% |
| Rockyview Property Mgmt | CRE | 3.9% |
| Boreal Food Distributors | Industrial | 3.3% |
| Whitecourt Hospitality | Hospitality | 2.8% |
| Summit Restaurant Group | Hospitality | 2.4% |
| Aurora Medical Plaza | CRE | 2.0% |
| Ironwood Light Mfg | Industrial | 1.8% |
| Top 10 | 40.2% | |
| Next 470 accounts | 59.8% |
Concentration
Top-10 share of revenue
The recurring base is contracted years out
| Next renewal | Contracts | % of recurring rev | Auto-renew |
|---|---|---|---|
| 2026 (in year) | 92 | 18% | 84% |
| 2027 | 118 | 24% | 80% |
| 2028 | 104 | 21% | 77% |
| 2029 | 73 | 15% | 74% |
| 2030 and beyond | 106 | 22% | 71% |
| Contracted base | 493 | 100% | 78% |
Maintenance agreements only. Each renewal year is the next scheduled anniversary; most roll automatically unless cancelled in writing.
Clean AR, diversified supply
AR aging
DSO ~35 days · AR ≈ $235K
90% of receivables current or under 30 days; write-offs negligible.
No supplier over 20%
Parts and equipment sourced across several national distributors on net 30–45 terms. No exclusive dependencies; vendors are substitutable.
Trade terms fund working capital
Supplier terms (DPO ~32 days) roughly offset receivables (DSO ~35 days), so the cash-conversion cycle is only a few days.
Light, and it funds itself
Net working capital
C$ thousands · ~4% of revenue
| C$ 000s | TTM | Y1 | Y3 | Y5 |
|---|---|---|---|---|
| Accounts receivable | 235 | 254 | 300 | 353 |
| Accounts payable | 127 | 137 | 162 | 190 |
| Net working capital | 98 | 106 | 125 | 147 |
| % of revenue | 4.0% | 4.0% | 4.0% | 4.0% |
Financing
The non-equity capital structure: bank debt, the seller note, coverage, and the deleveraging path.
Two-thirds debt-funded, conservatively
Funding mix
Sources of the $2.15M
| Instrument | Amount | Rate | ×EBITDA |
|---|---|---|---|
| Senior term loan | $1,050K | 8.5% | 1.6× |
| Seller note (subordinated) | $300K | 5.0% | 0.5× |
| Total debt | $1,350K | 2.1× | |
| Sponsor equity | $800K | ||
| Total capital | $2,150K |
Entry leverage 2.1× EBITDA against a 3.0× purchase multiple. The seller note aligns the vendor through the transition.
Senior facility amortizes over five years
Senior loan balance
C$ thousands · scheduled amortization
| Senior · $000s | Begin | Int | Prin | End |
|---|---|---|---|---|
| Year 1 | 1,050 | 89 | 177 | 873 |
| Year 2 | 873 | 74 | 192 | 681 |
| Year 3 | 681 | 58 | 209 | 472 |
| Year 4 | 472 | 40 | 226 | 245 |
| Year 5 | 245 | 21 | 245 | 0 |
Seller note: interest-only years 1–2, then amortized years 3–5. Excess free cash flow sweeps the senior facility faster than the scheduled minimum.
DSCR comfortably above covenant throughout
Cash flow vs debt service
C$ 000s bars · DSCR ratio labelled
| C$ 000s | Y1 | Y2 | Y3 | Y4 | Y5 |
|---|---|---|---|---|---|
| CFADS | 487 | 551 | 622 | 691 | 760 |
| Debt service | 281 | 281 | 377 | 377 | 376 |
| DSCR | 1.73× | 1.96× | 1.65× | 1.84× | 2.02× |
| Net debt/EBITDA | 1.46× | 0.74× | 0.04× | 0.0× | 0.0× |
Covenants (typical): min DSCR 1.25×, max leverage 3.0×. Lowest DSCR is 1.65× (Yr3, seller-note amortization) — ~32% cushion above the floor.
Conservative, self-liquidating debt
2.1× at entry → 0 by Yr4
Well inside a 3.0× cap and cleared to debt-free in four years from the business's own cash flow.
DSCR 1.65–2.02×
Comfortable headroom above a 1.25× covenant across the whole plan, even before the value-creation upside.
Holds at −10% revenue
A 10% revenue shock still covers scheduled debt service (DSCR > 1.25×), given 62% contracted revenue.
How the transaction is put together
| Term | Position |
|---|---|
| Structure | Asset purchase (share sale considered) |
| Headline price | $1.95M enterprise value, ~3.0× ODE |
| Basis | Cash-free, debt-free |
| Working capital | Normalized peg ~$98K, trued-up at close |
| Included | Goodwill, contracts, customer list, 8-van fleet, equipment, brand, WIP |
| Excluded | Leased premises, owner's personal assets, surplus cash |
| Vendor take-back | $0.30M seller note, 3-yr, subordinated |
| Escrow / holdback | 10% for 12 months against reps & warranties |
| Reps & warranties | Customary SME set; W&I insurance optional |
| Earnout | None required; vendor note keeps the seller aligned |
| Transition | 90-day handover + 3-yr non-compete |
Clean liabilities, stepped-up basis
An asset purchase leaves historic liabilities behind and gives the buyer a stepped-up depreciable base. A share sale stays open if contract novation and tax trade-offs favour it.
No cash surprises at close
Delivered with a normalized ~$98K net working capital (~4% of revenue). Anything above or below the peg trues up dollar-for-dollar, so neither side wins or loses on timing.
Vendor note + handover
A $0.30M subordinated seller note and a 90-day transition keep the founder invested in a clean handover of relationships and systems.
How the process runs from here
- Data-room access & Q&Afull document access; questions submitted to Top Tier Advisory
- Management callwith the owner and GM, ahead of an indicative offer
- Indicative offer (IOI)headline price and structure for discussion
- Confirmatory diligence & site visitunder continued confidentiality
- Purchase agreement & closewith the 90-day transition and seller note
Top Tier Advisory
Represented by Top Tier Advisory. Illustrative sell-side sample.