Bill D’Alessandro (@BillDA) is joined by Mehtab Bhogal (LinkedIn link) DTC eCommerce specialist to talk about distressed acquisitions & turnarounds, operations, capital structures, downsizing for quality, finding a business partner on Reddit, why makeup brands suck, and much more.We discuss a Bankruptcy deal, BH Cosmetics, linked below.-----Thanks to our sponsors! CloudBookkeeping offers adaptable solutions to businesses that want to focus on growth with a “client service first” approach. They offer a full suite of accounting services, including sophisticated reporting, QuickBooks software solutions, and full-service payroll options.-----* Do you love Acquanon and want to see our smiling faces? Subscribe to our Youtube channel.* Do you enjoy our content? Rate our show!* Follow us on Twitter @acquanon Learnings about small business acquisitions and operations.-----Acquisitions Anonymous Episode 89Show Notes:(0:00) Intro(1:00) Cloudbookkeeping.com(2:09) Mehtab's introduction(4:23) Why do you buy a business to downsize it? [Episode clip for wednesday](6:14) What is your general path after acquiring a business?(7:21) What does the cap structure look like pre vs. post-close?(10:23) How do you handle the Equity?(15:39) Let's jump to the Deal: BH Cosmetics.(18:14) Revenue trajectory(21:19) What is a 363 auction?(23:16) What does the process look like?(24:17) What do you think about this deal from a diligence and structure perspective?(26:52) How well do you know the business at the bidding stage?(28:26) Let's say you give it a go, how do you decide what the proposal is going to be for lenders and equity holders?32:00 DIP loan: Debtor in possession financing [Clip](32:43) What is the downside risk here? How does Karta add a layer of coverage?(34:46) Let's take about the operation side: How do you start a turnaround?(40:02) What are specifics about diligence for your company? Why are product teams so important?(44:05) BH got purchased at $4Mio. Was it expensive?(48:35) Tell us about the Return Profile, & how does it relate to equity value?-----Links:* BH Cosmetics Deal Link-----Past guests on Acquanon include Nick Huber, Brent Beshore, Aaron Rubin, Mike Botkin, Ari Ozick, Mitchell Baldridge, Xavier Helgelsen, Mike Loftus, Steve Divitkos, Dzmitry Miranovich, Morgan Tate and more.-----Additional episodes you might enjoy:#87 Yelp is not evil! Building a business using digital CAC | with Johnny Robinson#82 How Great Operators Win! How PE does it like pros | with Mark Brooks#88 Sellers Lie about the numbers?! | with Elliot Holland