Cetane Data Room

The Earn Out: Cash Can Be Best, But It’s Not Always on the Table

A large part of our business involves representing owners who are selling their home energy company. We have received well over 100 offers for businesses in the last year alone. Of those offers, around 80% contained some type of future performance payout or “earn out.” In contrast, over 70% of the offers that our clients have accepted were for cash (or almost all cash) at closing. Better understanding how an earn out works helps both buyers and sellers evaluate offers to determine what they will actually pay or receive from the transaction.

How Long Does it Take to Sell Your Business

Most owners we speak with tell us they think the process will take six to twelve weeks for a basic home energy company without a property sale. If everything runs perfectly they are not too far off in their estimates however, it rarely runs perfectly.

Is Bigger Better?

Bigger does not necessarily mean better but it does mean more valuable. Companies who grow through acquisition will not only increase their earnings, they will increase the value of their business when and if they decide to sell their company.

Hedging….It’s not just for Price Protection Programs

Many fuel marketers have learned that variable priced customer gallons can also be hedged and additional profits can be made with little or no risk. Not only is there little risk to hedging these gallons, but you can actually reduce the volatility while simultaneously locking in higher margins.

Margins….How Much Are You Worth?

The most obvious way to increase your profit is to increase your price or your margin. This sounds simple but you need to ask yourself some important questions before becoming the highest price company in town.

Cash at Closing

When fielding an offer for one of our clients, “Cash at Closing” are the three words I love to hear. A cash transaction has always been first choice; however with today’s changing business environment, can a seller expect to receive an all cash offer?

How Much per Gallon is Your Fuel Company Worth?

We all wish there was a magic formula to quickly value a business but it all comes down to the purchaser’s return on their investment.

Building Value through Propane

“Home Energy Companies” are quickly replacing traditional Home Heating Oil Companies as customer perceptions have changed and owners look to diversify; seeking new revenue streams to replace gallons lost to conservation and conversion.

Valuing and Acquiring Home Energy Businesses

Six steps to acquiring a Home Energy Business including: Introduction, Industry Trends, Finding a Company and Making an Offer, Performing Due Diligence and Closing the Transaction and Transitioning Your Acquired Company.