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.

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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.

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