Transforming a distributor or reseller into a valuable company may seem like a daunting task. Distributors are usually not worth very much, because an acquirer reasons that without a point of differentiation, a distributor is vulnerable to a price war. Rather than acquire a target company, a savvy potential acquirer of a distributor could temporarily lower [...]

Last month, Darden, the owner of the Olive Garden restaurant chain, announced it was acquiring Ruth’s Chris, the legendary American steakhouse, for $715 million, implying a valuation of around one times last year’s annual revenue, or about ten times their adjusted EBITDA for 2022. Not bad for a giant company, but Ruth’s Chris’s value was likely [...]