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

Would you pay $7M cash for a background check business in California? Let's dive in!

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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.

Key Episode 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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