I understand what you are saying. And you're right I have no idea what the fixed costs are... I was simply making an assumption. I understand about companies that whore off products, lose margin, and then become distressed and likely end up out of business. What I am getting at though, is that those companies will drown regardless. But there has to still be a strategic approach for supplement company A to acquire either supplement company B, C, or D, and part of that is weeding out those companies. Obviously if you are going to consolidate you don't want to have to rely on push marketing tactics forever. However, consolidation (if done right) can build stronger brand loyalty and not leave them forced to whore out products. But yes, of course it has to be done strategically. I am not talking about acquiring a company at $250k because it wouldn't be worth the headache. But I would imagine there are players that can effectively acquire companies in the $2-20 million range with success. But yes, I don't really know much about the industry. However, from a bankers perspective, you see growth and low concentration, and that makes it interesting.
What do these smaller supplement companies value at anyway? What do you see as the typical multiple of sales, net, EBITDA, etc.?
