Four weeks apart, two buyers priced the same industry at opposite ends of the scale. On August 4, Procter & Gamble agreed to buy Thorne for $3.8 billion in cash, roughly 5.8 times revenue and more than five times what a private equity firm paid for it in 2023. On September 1, Yellow Wood agreed to buy Nestlé's mainstream vitamin brands, Nature's Bounty and Puritan's Pride among them, for about $1 billion on roughly $1.2 billion of sales. Eight-tenths of revenue.
Same shelf, same regulator, same customer. A seven-fold gap in price. The gap is the most useful piece of information a founder planning an exit has seen this year, because it says exactly what strategic buyers pay for and what they refuse to.
What the 5.8x buyer bought
Thorne makes its own products, sells a large share through practitioners and subscriptions, and runs gross margins in the sixties. Its buyer got retention data it can underwrite, a supply chain it controls, and a brand that does not compete on a Walmart end cap. The 0.8x buyer got household names that sell at mass, where private label sets the price and the retailer sets the terms.
The pattern repeats outside supplements. In beauty this summer, the deals went to body care and fragrance brands with unit growth, not to color cosmetics losing units at both tiers. In food, the acquirers who paid up in July and August also marked down what they bought last year: one public buyer took a $187 million impairment on a protein brand, and a soda brand's earn-out is being reported at a fraction of its maximum. Buyers now price execution risk into the deal itself.
For a founder, that means the number a banker quotes for "the category" is fiction. Your multiple is set by which side of the barbell your specific economics sit on: gross margin after channel costs, repeat rate you can prove, how much of the supply chain you own, and how clean the books are when the buyer's accountants arrive.
The tax clock most founders have not started
Here is the part your banker will not bring up. A large share of the gain on a sale of qualified small business stock can be excluded from federal tax, and the One Big Beautiful Bill made the rule more generous for stock issued after July 4, 2025: 50% of the gain excluded after three years, 75% after four, 100% after five, with a per-company cap of $15 million (up from $10 million) and a company-size ceiling of $75 million in assets at issuance (up from $50 million).
The catch is in the word stock. The exclusion only applies to C corporation shares. Most brands at $20 million to $100 million are LLCs or S corporations, and for them the clock has not started, because there is no qualifying stock to hold. Converting to a C corporation issues the stock and starts the clock, but the holding period runs from that day, so a founder who expects to sell in 2029 needs the conversion done this year to reach even the three-year tier.
The trade-off is real. A C corporation pays its own tax on operating profit, which for a highly profitable pass-through can cost more each year than the exclusion saves at the end. Some states, California among them, do not follow the federal exclusion at all. And the $75 million asset test is measured at issuance, so a brand growing fast can outgrow eligibility before it converts. Our earlier piece on building to sell with QSBS walks through the older rules; the new tiers make the timing question sharper, not simpler.
As an illustration only: a founder who converts in 2026, sells in 2030 for a $20 million gain, and qualifies would exclude $15 million of that gain at the 100% tier. At federal rates on long-term gains, that is several million dollars of tax that turns on a decision made four years earlier.
Four questions to answer this fall
- Which side of the barbell are your economics on today: gross margin after Amazon, TikTok, and retailer deductions; repeat purchase rate you can show from card or subscription data; and how much of production you control?
- What would a buyer's accountants find in a quality-of-earnings review: are deductions reconciled, is inventory reserved, are tariffs in cost of goods, is sales tax exposure quantified?
- If a sale in three to five years is plausible, does a C corporation conversion now pay for itself after the annual cost, and does your state honor the exclusion?
- Who holds the shares? The cap is per company but applies per shareholder, so how founders, spouses, and trusts hold stock changes the total that can be excluded.
Where your facts change the answer
Deal multiples in the press are enterprise value on reported revenue, and both numbers are rougher than they look. The exclusion rules turn on the company's assets, the type of business, how the stock was acquired, and state law, and the new tiers apply only to stock issued after July 4, 2025. None of this is a reason to convert on instinct. It is a reason to run the numbers this year rather than in the year you get an offer.
If you have never seen a side-by-side of what your brand is worth on each side of the barbell, and what the sale would net after tax under each entity type, that is the tax planning conversation to have before a buyer starts the clock for you.
Reading about taxes usually means paying too much of them.
Over 90% of the time our tax advisors find savings a previous CPA missed — for brands with $150K+ in net profit, a typical first-year plan uncovers $20K–$50K. Grab the free Tax Savings Checklist, browse the tax strategy playbook, or start with a zero-cost planning session.