Big Bucks for Little Beds
By Ian Mount

(FORTUNE Small Business) – When tech consultant Karen Adams met former parole officer Andrea Edmunds six years ago, it was supposed to be a job interview. But by the end of lunch, the two moms had decided to start PoshTots, an online retailer of high-end kids' furniture. (One signature item is a $47,000 Cinderella-style Fantasy Coach bed.) In January retailer BabyUniverse announced it was buying PoshTots for $14 million in cash and stock. Adams, 36, and Edmunds, 39, knew PoshTots needed its own warehouse, and neither had the expertise to run one. Jim Carroll, a managing director at Tucson M&A advisory firm Oracle Capital, notes the price is about twice PoshTots' annual sales, and double the multiple that BabyUniverse paid in September for another e-tailer. PoshTots' luxury positioning and $500 average order probably boosted its price, he says.