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Meet Thomas Smale. He is the co-founder of FE International, a brokerage firm that specializes and advises in the sale of established websites from across the globe. Thomas is a graduate from the University of Bath with a degree in Business Administration and previously owned and ran several successful websites.
Looking to make some extra cash while at university, Thomas says, “I kind of got into buying and selling websites myself.”
Originally founded in 2010, Thomas “unofficially started this” at 22 years old and “over a period of years that kind of morphed into a brokerage business, which is pretty much what we do now,” Thomas continues.
Over 400 Deals Valued at $45,000,000
In 2012, Thomas joined forces with a friend from the University of Bath, Ismael Wrixen and together they re-branded into FE International. From bootstrapped to over $45million in sales, FE International has become a distinguished advisor within the industry.
Further proving their growing dominance, Thomas says, “We’ve done just over 350 now, coming up to 400 deals. So the number moves quite consistently upwards.“
He continues, “In the last 12 months we did about 80 deals, so we did about 1.5 deals a week and they really vary in size.”
In FE International’s last deal, to which Thomas cannot give any specifics on the company name or the buyer due to non-disclosure, he says it was “just over $1million dollars. It was a SaaS business.”
How Does Thomas Sell Companies?
Thomas says, “So essentially a client comes to us, they have a business they want to sell. We will value the business. If they are happy with our valuation, we will then work through an on-boarding process where we will learn more about their business.
Find out about the financials of their business and then we put together a sales pack or prospective about the company that’s being sold. And then we then go out to our own network of buyers who are interested in buying online businesses.”
How Thomas Brokered His Last $1,000,000 Deal
So how did Thomas value his last deal, the $1million SaaS business and what metrics did he use to get that valuation?
“Generally we look at the financials for the last 12 months, and then we apply the multiples to the those financials. And the multiples we apply are based on the variables that we discussed,” he says.
“The owners involvement is one of the most important (variables) in how much time they spend on the business. What the growth of the business looks like; so a business that’s growing say, 5-10% month over month is worth more than a business that’s been on a consistent decline,” he says, speaking specifically on variables.
Applying what we are learning here with Thomas, let’s look at another one of FE International’s recent sales that was public and discuss the details.
Brennan Dunn founded a Saas business called Planscope and was extremely busy with “a much larger business elsewhere” and wanted to sell. With monthly revenue of $3k a month and 70 active customers, how did Thomas convince the buyer to pay $100k for Planscope?
In the buyer’s case “Brennan’s story made a lot of sense because he was putting his focus elsewhere and didn’t really have the time to put into that particular business and grow it,” Thomas says.
Additional key points:
- “So our average deal size is about $250k.”
- “We charge 15% per deal.”
- In 2015, FE International did “around $1.5 million in commissions.”
- “All of our team is salaried and then they also get, depending on their role internally, they get a commission. So the majority of our costs are team based.”
- FE International has over 4,000 vetted buyers.
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