September 27th Edition

▪︎ RECENT NEWS:

Here’s a transaction that’s much closer to the world of ordinary Australian business owners than the billion-dollar deals usually filling the financial press.

National Dental Care has acquired the business assets of Steve King Dental Group, a five-clinic dental group operating around Cairns.

The transaction received merger approval on 15 September. National Dental Care has also been approved to acquire Golden Grove Village Dental Centre in South Australia.

Separately, private-equity-backed Impression Dental Group recently acquired Blackburn Clinic Dental Centre in Victoria.  

Why this matters

This is exactly how consolidation happens in fragmented industries.

A buyer doesn’t necessarily need you to have built a national company.

They may already have the national company.

What they need from you is:

Locations. Customers. Practitioners. Staff. Systems. Revenue. Local reputation.

The same acquisition logic can apply to accounting firms, veterinary clinics, allied health, electrical contractors, HVAC businesses, managed IT providers and other fragmented SME industries.

For owners, the lesson is simple:

You don’t necessarily have to become the biggest operator in your industry to become valuable to the biggest operators in your industry.

Another useful SME transaction recently received approval.

⁠Holcim Australia has acquired the assets and business of Burdett Group, a family-operated business supplying sands, soils, landscaping materials and ready-mix concrete in south-east Victoria.

The two businesses overlap in products including sand, aggregates and ready-mix concrete.  

The transaction price hasn’t been publicly disclosed.

And that’s okay.

The interesting part for SME owners is why the acquisition makes sense.

Holcim already operates at scale.

Buying an established local operator can give a strategic buyer immediate access to:

Instead of spending years recreating those things organically, it buys them.

Think about your own business

Ask:

What would take a competitor three years to build that they could acquire from me tomorrow?

That’s where strategic value can start appearing.

▪︎ EXIT INTELLIGENCE:

One of the more interesting pieces of Australian business-sale data this year comes from Bsale.

At 30 June 2026, approximately 16,793 businesses were advertised for sale on its marketplace.

Buyer enquiries increased by around 13% during the June quarter.

But the number of listings marked sold fell from 607 in the March quarter to 459 in June — approximately a 24.4% decline.  

That’s an interesting combination.

More buyer enquiries.

Fewer businesses getting across the line.

The median advertised asking price among listings marked sold during the June quarter was approximately $272,500, reinforcing how much of Australia’s business-sale market consists of normal small and owner-operated businesses rather than huge corporate transactions.

Importantly, these are advertised asking prices, not verified settlement prices.  

Across FY2026, Bsale says 1,956 listings were marked sold with more than $1.17 billion in combined advertised value.  

What does this mean if you’re selling?

Having buyers in the market doesn’t mean buyers will buy your business.

Buyers can compare opportunities.

That puts more pressure on sellers to have:

And perhaps most importantly:

A business that justifies its asking price.

The businesses that sell aren’t necessarily the businesses with the best story.

They’re the ones where the story survives due diligence.

▪︎ THE MULTIPLE BOARD:

There is no official Australian database showing the exact weekly sale multiple for every SME industry.

So this board should be treated as indicative market guidance, not a claim that every business in an industry sells within these ranges.

We keep this board updated every week.

↑ Recurring revenue
↑ Management team
↑ Low owner dependency
↑ Diversified customers
↑ Growing earnings
↑ Strong margins
↑ Contracted revenue
↑ Defensible market position

What pushes you towards the bottom?

↓ Owner does everything
↓ One customer dominates revenue
↓ Declining profit
↓ Messy financials
↓ Staff instability
↓ Project-only revenue
↓ Poor systems
↓ Significant working-capital requirements

▪︎ VALUATION OF THE WEEK:

Let’s build a hypothetical one.

The business

Revenue: $2,400,000

Reported net profit: $295,000

Team: 8 employees

Owner: Works full-time

Work mix: 65% projects / 35% maintenance

But the reported profit isn’t necessarily the number we’re going to value.

First, we normalise it.

Step 1 — Reported profit

$295,000

Step 2 — Add-backs

The owner runs several legitimate expenses through the business that a buyer wouldn’t necessarily inherit.

Owner motor vehicle above normal business requirement: +$15,000

Owner’s spouse receives wages but performs limited work: +$35,000

One-off legal dispute: +$18,000

Personal phone/travel/other discretionary expenses: +$7,000

Adjusted earnings:

$370,000

Now we have a much better picture of the underlying earning capacity.

Step 3 — Choose the multiple

Suppose we assess this hypothetical plumbing business at:

2.5×–3.25× adjusted earnings

Why isn’t it getting 4×?

Because the owner still:

There’s value there.

But there’s also owner dependency.

Step 4 — Do the maths

Low case $370,000 × 2.5 = $925,000

High case $370,000 × 3.25 = $1,202,500

Indicative value:

$925,000–$1.20m

This is an illustrative example, not a valuation of an actual business.

And here’s where it gets interesting.

Imagine the owner spends the next two years:

Hiring an operations manager.

Moving quoting to an estimator.

Increasing maintenance revenue from 35% to 55%.

Reducing dependence on two major builders.

Growing adjusted earnings to $450,000.

Now suppose buyers become comfortable paying 3.5×.

$450,000 × 3.5 = $1,575,000

The owner didn’t just increase profit by $80,000.

They potentially increased value by hundreds of thousands because they improved both sides of the equation:

Earnings × Multiple = Business Value

▪︎ BUILD VALUE:

Imagine your business produces:

$3 million revenue.

Sounds good.

But then the buyer discovers one customer contributes:

$1.2 million.

That’s 40% of your entire revenue coming from one relationship.

Now imagine that customer leaves six months after settlement.

The buyer didn’t acquire a $3 million revenue business.

They effectively acquired a $1.8 million business and a very large risk.

That’s why customer concentration matters.

What should you do?

Pull a customer concentration report from your accounting system.

Work out:

Top customer % of revenue

Top 3 customers %

Top 5 customers %

Then deliberately grow around your largest accounts.

If your largest customer contributes 35% today, you don’t necessarily need to fire them.

Instead, grow other customers until that 35% becomes 25%, then 20%, then 15%.

You keep the revenue.

But reduce the risk.

The principle:

Don’t reduce your biggest customer. Make the rest of the business bigger.

That’s something you can start working on Monday morning.

▪︎ WORDS FROM JACK:

I’ve noticed that owners often start thinking seriously about the value of their business only when they’re ready to sell it.

By then, a lot of the things that could have increased the value needed two or three years to implement.

You can’t build a management team overnight.

You can’t suddenly create three years of recurring revenue.

You can’t instantly diversify a concentrated customer base.

And you can’t manufacture years of clean financials six months before due diligence.

Even if you have absolutely no intention of selling today, start asking yourself:

Would somebody else want to own this business without me?

Build the answer to that question now.

If you eventually sell, you’ll be glad you did.

And if you never sell, you’ll still own a better business.

See you next week!

— Jack