Would You Pay 7x EBITDA for a Background Check Business?

In this episode, Michael and Heather analyze a 25-year-old background search provider in California with a $7 million asking price and $1.1 million cash flow. They discuss the business model, the technology and operations behind criminal background checks, and the challenges of evaluating a market-leading "data wholesaler." The team debates its potential as a strong acquisition or a risky proposition amidst tech disruptions and high cash demands.Thanks to this weeks sponsors!Acquisition Lab: Serious about buying a business? Join Acquisition Lab’s proven framework and support community. Learn more at AcquisitionLab.com or email Chelsea Wood at [email protected] Conference: Learn from top HoldCo owners! Join us in Utah next spring for HoldCo Conference 2025. Save 10% with code AAPod at HoldCoConference.com.Episode Key Highlights:Background Checks Unpacked: The process and customer base for this business.Financial Overview: $3.8M revenue, $1.1M cash flow, $7M asking price.Offshore Operations: A 15-year document processing facility included in the sale.Competitive Edge: Unique state-wide coverage and proprietary systems.Tech Disruption: Concerns about AI and automation reshaping the industry.High Barrier to Entry?: Evaluating claims of market dominance.Subscribe 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]