Top 3 Reasons Companies Do Not Sell

This first in particular. Owner dependency. The more specialised/niche the company, the more likely this is. The company was founded on the skills and specialist knowledge of the owner and these skills have never been wholly disseminated. In many cases, when such an owner leaves the company at the close of the sale, replacing those skills from the employment market will significantly affect the EBITDA and require time to solve, often proving discouraging to potential buyers.

Inflexibility of the owner on purchase deals – there is always a route to a deal which benefits both parties. The key is flexibility.

The Unicorn Hunter – The “unicorn hunter” expects an unreasonable, often unattainable premium for their business. Twice in the past year 2024-25 we have come across vendors of contract manufacturing companies (no IP, nor particular USP) seeking 7x EBITDA, with the company fully owner dependent for operation.  Despite honest and data-driven advice on likely business valuation, the company owners firmly believes that a unique or “unicorn” buyer will emerge who offers to pay a vast premium for their company.

This is not to say that 3x EBITDA is a limit, very often not the case, we will always explore how the company can be purchased at a higher price.

Business has plateaued – The owner(s) sees, or more likely the potential buyers sees, that, despite climbing turnover over the last 3-4 years, the company has reached its limits of growth in its current status. In order to grow, it will require investment, such as new/additional machinery, worse, imminent replacement machinery, larger premises, more personnel, higher skills, to name a few, with an additional requirement, management energy and drive. In these circumstances, the purchase price paid by the buyers will not be his final outlay. This situation can be overcome by the purchase structure and flexibility of the vendor.