You gotta love what you do in this life. If you do, that is the formula for success and long life.
On the other hand, we live in a world where society is up in arms against smoking anything. This new schipp tax proposal is only one of the myriad ways that will soon be coming down the pike to make smoking difficult and discourage people from smoking anything, especially cigars.
But in difficulty hides opportunity. You should be able to leverage the dearth of rational future opportunity to get a better price. This guy wants out. You should be able to get a totally leveraged buy out going, which would look like you get his inventory at a discount to what he paid, just to free him of his obligations, to suppliers mostly.
That's the hard part. What are his payables? Big question. He no doubt still owes money for the inventory on the shelves. I have never been in the cigar business, so maybe it carries a lot of cash transactions, but in any other kind of retail I have looked at, the inventory is paid for after the sale, and you get terms or factor the difference. Payables are the heart of the financial outlook for the company.
In the end, considering the future being so bleak and all, or at least you (and your bank will also) gotta couch things this way - the regulatory and tax outlook makes the future bleak. While you have a personal reason to take a leap of faith that things will never go THAT crazy, he will have a very hard time finding another buyer in this climate. You will have trouble getting this transaction banked as well, I presume.
Soooooooo, you should be able to stitch present ownership to a deal which essentially gets you the shop for free, or almost free after paying for inventory, IMHO. In any event, what they call "good will" is worthless, considering you are the governor's or the president's signature away from being out of business. We came 14 votes away from Schipp.
All things considered, I envy you the opportunity. I once had a chance to buy a pawn shop, and it is one of the few things I regret in life that I did not pull the trigger on that deal. Doing something you like, with people you get along with (plus dealing with the public, well, so it's not ALL good) and paying the bills, with a chance to thrive and do great if things come your way, you gotta seize the moment.
A little musical number to listen to while you ponder this deal:
http://www.youtube.com/watch?v=6_RicayN7X8