Choose your own adventure...
Option A) Purchase whole operating entity, tradename, goodwill, website, sales staff and admin. personnel, AND ongoing new business/production relationship with the Owners on a 90%/10% split for $8.4MM (5.6x). Paid as $5.2MM at closing, Balloon 1 in 12 months paid as $2.1MM, and Balloon 2 in 24 months paid as $1.1MM. Sellers would provide a retention clause such that NOT LESS THAN 85% of expected residuals would be collected by the Buyer post closing, and the Sellers will replace or secure as many new accounts as needed to achieve these guaranteed milestones if applicable.
Option B) Purchase the merchant processing accounts alone, for $6.34MM (4.3x). $4MM at close, $130k / Month for 18 months with a similar 85% retention/captured revenue threshold guaranteed as part of the sale. Option B) does not include infrastructure, tradename, sales force, but is a book of merchant services clients only. Comprehensive non-piracy non-solicitation agreement would be included in Option B) sale.
20 total agents included, of which about 7-10 are truly active and writing new accounts on a regular basis. No one merchant represents more than 1.0% of revenue, so this is a diversified, stable client book, thousands of individual processing merchants. NOT sequestered by industry vertical, they do all kinds of accounts, mostly brick and mortar retail with a sprinkle of gateway customers. NDA is required for further details.
Facilities: Professional office location, internal staff can be rolled up to an existing organization if it's a local play, or take over the accounts and the revenue as a stand alone acquisition per Buyer preference. (Home Based)
Competition: Merchant services is a fiercely competitive industry, however, the Sellers have a network of field agents that bring in regular new business, in addition to a very solid trade name that is easy to remember and has excellent brand recognition and URL presence.