Import and distribution businesses for sale

An importer rarely owns the brands it sells. It has an agreement with the manufacturer to sell them in a defined territory, often exclusively. Read the agreements carefully: which territory and products do they cover, how long do they run, what is the notice period, and can the manufacturer terminate on a change of ownership? There may also be minimum purchase volumes or sales targets that must be met to keep exclusivity.

Ask how long the relationships have lasted, and speak to the key manufacturers before making a final offer. A manufacturer planning its own Danish sales office is a risk that belongs in the price.

Goods from outside the EU must clear customs, and changes in duties and exchange rates hit the margin directly. Ask how currency risk is managed and whether prices to dealers can be adjusted. As an importer, the business may be responsible for products meeting EU requirements for labelling and documentation. Check how this is handled and whether there have been complaints or recalls.

Sitavo’s indicative range for trading is 2.5–4.5 times EBITDA, cross-checked against 0.2–0.6 times revenue. Long exclusive agreements with several manufacturers push the price up; one dominant manufacturer with short notice pulls it down.

• Distribution agreements: territory, exclusivity, term and change of control.
• Minimum purchase volumes and sales targets.
• Customs arrangements, currency hedging and price adjustment.
• Documentation of product compliance and any recalls.
• Dealer agreements and the dealers’ share of sales.

See the general advice on buying trading businesses, and use the price estimate to compare the price with the figures.