Acquirers Must Translate Sellers' EBITDA Internally Rather Than Attempting to Correct Them
Tom Gaynor · Tom Gayner: Invest Like The Best · Jan 23, 2024 · at 1:56:02
Tom Gaynor, CEO of Markel Corporation, explains Markel's pragmatic approach to negotiating with business sellers who use EBITDA.
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“Where we are active buyers of businesses, sellers of businesses have been conditioned to use that phrase. So if you come in and try to academically explain the limitations or what adjustments you need to make, they're gonna sell that business to somebody else. And sometimes you should be happy about that because you don't want the business, but sometimes they have a really good business. And so your job is not to teach them how to think differently about their thing. Your job is to understand what economic reality is and make a rational decision is, would this be a good decision for Markel or not?”
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