Make Bank buying a bankrupt business | With Mehtab Bhogal - Acquisitions Anonymous Episode 89

Bill D’Alessandro (@BillDA) is joined by Mehtab Bhogal (LinkedIn link) DTC eCommerce specialist to talk about distressed acquisitions & turnarounds, operations, capital structures, downsizing for quality, finding a business partner on Reddit, why makeup brands suck, and much more.We discuss a Bankruptcy deal, BH Cosmetics, linked below.-----Thanks to our sponsors! CloudBookkeeping offers adaptable solutions to businesses that want to focus on growth with a “client service first” approach. They offer a full suite of accounting services, including sophisticated reporting, QuickBooks software solutions, and full-service payroll options.-----* Do you love Acquanon and want to see our smiling faces? Subscribe to our Youtube channel.* Do you enjoy our content? Rate our show!* Follow us on Twitter @acquanon Learnings about small business acquisitions and operations.-----Acquisitions Anonymous Episode 89Show Notes:(0:00) Intro(1:00) Cloudbookkeeping.com(2:09) Mehtab's introduction(4:23) Why do you buy a business to downsize it? [Episode clip for wednesday](6:14) What is your general path after acquiring a business?(7:21) What does the cap structure look like pre vs. post-close?(10:23) How do you handle the Equity?(15:39) Let's jump to the Deal: BH Cosmetics.(18:14) Revenue trajectory(21:19) What is a 363 auction?(23:16) What does the process look like?(24:17) What do you think about this deal from a diligence and structure perspective?(26:52) How well do you know the business at the bidding stage?(28:26) Let's say you give it a go, how do you decide what the proposal is going to be for lenders and equity holders?32:00 DIP loan: Debtor in possession financing [Clip](32:43) What is the downside risk here? How does Karta add a layer of coverage?(34:46) Let's take about the operation side: How do you start a turnaround?(40:02) What are specifics about diligence for your company? Why are product teams so important?(44:05) BH got purchased at $4Mio. Was it expensive?(48:35) Tell us about the Return Profile, & how does it relate to equity value?-----Links:* BH Cosmetics Deal Link-----Past guests on Acquanon include Nick Huber, Brent Beshore, Aaron Rubin, Mike Botkin, Ari Ozick, Mitchell Baldridge, Xavier Helgelsen, Mike Loftus, Steve Divitkos, Dzmitry Miranovich, Morgan Tate and more.-----Additional episodes you might enjoy:#87 Yelp is not evil! Building a business using digital CAC | with Johnny Robinson#82 How Great Operators Win! How PE does it like pros | with Mark Brooks#88 Sellers Lie about the numbers?! | with Elliot HollandSubscribe to  weekly our Newsletter and get curated deals in your inboxAdvertise with us by clicking hereDo you love Acquanon and want to see our smiling faces? Subscribe to our Youtube channel.Do you enjoy our content? Rate our show!Follow us on Twitter @acquanon Learnings about small business acquisitions and operations.For inquiries or suggestions, email us at [email protected]