New Deals: A lumberyard, car wash, and 3 other finds

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NEW DEALS

1/ Lumberyard

📍 Location: South Dakota
💰 Asking Price: $3,300,000
💼 EBITDA: $926,035
📊 Revenue: $8,205,032
📅 Established: N/A

💭 My 2 Cents: This lumberyard has been in operation for an impressive 40+ years. Lumberyards provide essential building materials like wood, hardware, and other construction supplies to contractors, builders, and construction companies. These are always in demand, especially in growing or stable real estate markets. This business has built a loyal and diverse clientele, has an experienced staff of 14, and has been chugging along with consistently strong results. I like that they’re located on a major highway in a growing community, with their 4-acre site including 10,600 sq. ft. of office/showroom and 34,000 sq. ft. of covered roof area, providing a lot of room to grow. I also like that the deal comes with $1M in inventory and $400K in FF&E included in the asking price, while there’s also the option to purchase the real estate. Given the impact of economic cycles on this type of business, I’d need to check on their financials for the past ten years to ensure the stability of their cash flow. I’d also want to better understand the local housing market, who their main customers are, what the local competition is like, and the nature and condition of the inventory and FF&E.

2/ Car Wash

📍 Location: Nassau County, New York
💰 Asking Price: $4,200,000
💼 EBITDA: $676,864
📊 Revenue: $1,541,527
📅 Established: 1980

💭 My 2 Cents: Car washes have gotten a lot of interest in recent years because they’re some of the most recession-resistant businesses. This car wash located in a high-traffic area in a bustling part of Long Island, has consistently delivered stable results with great margins. However, what really stands out here is that the current owner has secured a lease at favorable rates that goes through 2046. This provides significant security in knowing you won’t need to change locations or be at risk of a landlord raising prices and hurting margins. I also like that their facility has space to add more bays or could be converted into an express car wash, which could streamline operations and bring in even more customers. Given their long history and secure rent going forward, it should be easy to get a sense of what expected future earnings are by looking at the historical data. There shouldn’t be any guess work needed here as you can know off the bat how they have performed through different cycles as well as what your major cost inputs are going to be for the next 20+ years. Besides their financials, I’d also want to look into the condition of their equipment and facility, what their utilization rate is and how much more business they could handle with their current capabilities, whether they currently offer a membership model (if not, it’s an opportunity to bring in recurring revenue), and how much competition they face in the local area. Ultimately, car washes are in high demand and a proven business like this should draw a lot of interest.

3/ Environmental Services and Testing Company

📍 Location: Evansville, Indiana
💰 Asking Price: $1,800,000
💼 EBITDA: $647,407
📊 Revenue: $1,929,574
📅 Established: 1988

💭 My 2 Cents: This environmental services and testing company focuses on stormwater and erosion control, providing essential capabilities that are necessary for ensuring roadway and construction projects comply with legal standards. They have a proven track record, with 75% of their revenue generated from repeat municipal and commercial clients. Importantly, they have both the Women-Owned Business Enterprise (WBE) and Disadvantaged Business Enterprise (DBE) certifications, which are needed for various of their contracts. Having these designations helps to open the door to many extra opportunities and serves as an important barrier to competitors. While this can limit who a potential buyer is, if you can qualify for either of these or are a veteran, this could be a great way to get into the industry. I’d need to know what percentage of their revenue is tied to WBE/DBE contracts and what would be involved in passing these contracts to a new qualified owner. I’d also want to dig into their standard contract terms, how much work they have in progress or the pipeline, how they source new business and if bidding is involved, and who their key competition is. The current owner is involved in the day-to-day but is willing to stay for up to a year to ensure a smooth transition and is also offering seller financing, making this an overall really intriguing deal.

4/ Accounting Firm

📍 Location: Miami, Florida
💰 Asking Price: $12,000,000
💼 EBITDA: $3,373,134
📊 Revenue: $5,311,000
📅 Established: 2011

💭 My 2 Cents: Regular readers know I love accounting firms because of their steady recurring revenue and high margins, but I was particularly excited to come across this one because you rarely see accounting firms of this size for sale. This full-suite business provides personal and corporate tax services and bookkeeping with a strong focus on the Latin American community (85% Spanish-speaking clientele). They have 15 full-time employees in 6 branches and bring in additional preparers during tax season. I like their varied revenue streams, which help diversify risk while providing multiple avenues for future growth. I also like that they have plans to open two new branches in 2025, showing they are still expanding and have a team and business model that can support further growth. In tracking this growth, I’d want to understand how these two new locations were chosen and how they are projected to impact their earnings. I’d also want to get a handle on the revenue breakdown between bookkeeping and tax (tax is seasonal), their client retention rate, how they acquire new clients, and whether the current owner owns any client relationships. With a full team that is planning on staying, great margins, and impressive cash flow, this business could be a very interesting opportunity.

5/ Pipe Welding Business

📍 Location: Sacramento, California
💰 Asking Price: $7,500,000
💼 EBITDA: $1,504,637
📊 Revenue: $7,409,883
📅 Established: 2009

💭 My 2 Cents: This niche pipe-welding business specializes in projects for large power plants. They are licensed to operate in five states (CA, AZ, WA, OR, NV) and hold several lucrative government contracts. These contracts, which can be challenging to obtain, provide a serious moat against competitors and implies that they are a very stable and established business. I like how this business is well-positioned going forward, as they currently have maintenance contracts and committed projects spanning well through the next year. I’d also expect that there’s a great deal of expertise in their large workforce of 80, which should help secure their solid market position against possible competition. I’d need more detail on their revenue split between government and private contracts, how much work is in progress or on contracted backlog, their typical project’s scope and timeline, how they win new business, and who their main competitors are. I’d also be curious as to the projected market for their services over the next 10-15 years and what opportunities might exist for expanding into new markets or regions. Finally, I’d want to scope out any licensing or certification requirements and if they face any pending major capital expenditures for equipment or facilities. While this deal looks tailor made for someone with a manufacturing background, it could also work for someone looking to get into the industry, as the current owner is willing to stay for up to a year to aid in a transition.

Lumberyard and Building Products Business