The £1.3M the memorandum left out

A family office in heads of terms to acquire an FBA brand at £4.6M — broker memorandum polished, seller P&L confident, timeline tight.

That the numbers were broadly right and diligence was a formality — the question was speed, not price.

The P&L did not reconcile to disbursements; a fifth of trailing-twelve-month profit came from a one-off price spike already reversing; 71% of revenue sat in one ASIN whose review velocity was propped by tactics that die on transfer; and the working-capital requirement for the first 120 days was absent from the memorandum entirely.

A rebuilt buyer’s P&L from raw disbursement data, a risk-adjusted valuation, and a first-120-days cash model — the deal as it actually was, not as presented.

Proceed — but only at a repriced £3.3M with a holdback tied to hero-ASIN performance, and a supplier agreement signed before completion. Otherwise: do not proceed.

The findings pack went to the seller’s side line by line. The structure was renegotiated over three weeks; the seller accepted the reprice and the holdback.

Completed at £3.3M — £1.3M below the agreed heads of terms — with a holdback that subsequently paid out in full, confirming the pricing was fair to both sides.