New Deals: An autobody/collision shop, environmental abatement and remediation service, and 3 other finds

Sign Up | Podcast | Advertise | Work With Me

NEW DEALS

1/ Autobody/Collision Shop

📍 Location: Minnesota
💰 Asking Price: $1,800,000
💼 EBITDA: $653,206
📊 Revenue: $2,233,456
📅 Established: 2000

💭 My 2 Cents: I like how auto body repair is a simple business that will always be in demand. There is a lot of competition in this space, but this repair shop’s proven track record over 25 years and excellent reputation, as seen with their Google 5-star rating, suggest they should continue to be consistently profitable. It’s also nice to see that SBA financing has been preapproved, so there are presumably clean books and records. While their listing says there is currently little competition in their area, I’d want to confirm this and then look into what marketing they do and how they differentiate themselves from whatever competitors they do have. Equipment is key in a repair business, so I’d need to get a handle on the type and condition of the FF&E and inventory included in the sale and if any is in need of repair or upgrade. I’d also want to understand the breakdown in revenues between their different services (repair, painting, restoration), the qualifications and experience of their 7 employees, the licensing requirements, and the terms of the lease for their facility.

2/ Environmental Abatement and Remediation Service

📍 Location: Hampden County, Massachusetts
💰 Asking Price: $5,999,000
💼 EBITDA: $1,226,357
📊 Revenue: $6,084,104
📅 Established: 1991

💭 My 2 Cents: This environmental remediation company specializes in the abatement of asbestos, mold, industrial chemicals, and other hazardous materials. Given the importance of what they do to everyone’s health, it almost goes without saying that they provide a vital service that, if anything, should be in more demand as local and state governments move toward stricter environmental standards. I like that they have a large and skilled staff in place, perform over 1,000 projects a year, and are fully licensed, insured, and bonded. I also like that the seller is willing to offer financing of $300,000 at an attractive interest rate, so if approved for an SBA loan, a buyer could potentially only need to put 5% of their own equity into the acquisition. I’d be curious as to how they handle their various licensing requirements and, in a field with constantly evolving requirements, how they stay in compliance with the latest rules and regulations. Relatedly, I’d want to know if there are any pending regulatory changes that might impact the business, the value and condition of any specialized equipment included in the sale, and what current constraints there might be to further growth. In looking at their numbers, I’d want to understand if there is any repeat or recurring revenue, what their average job duration and value is, how they acquire new business, and who their main competitors are. Ultimately, with the increasing demand for environmental remediation, this looks like a really nice opportunity.

3/ Lawn and Landscaping Business

📍 Location: Greene County, Missouri
💰 Asking Price: $1,300,000
💼 EBITDA: $567,697
📊 Revenue: $1,348,114
📅 Established: 1986

💭 My 2 Cents: Regular readers know I think landscaping is a tried-and-true boring business. Beyond the steady recurring revenue typical with landscaping, I like that this 35-year-old company has built a loyal client base, has a robust staff of 40, and generates great margins. One really appealing thing about a business with a proven track record like this is that it could be an excellent place to start for someone without specific experience in the industry, with the established base of repeat customers ensuring you have a stable revenue stream from the start. At the same time, you’ll need to be prepared to manage a large team given the number of employees needed to generate this level of earnings. I’d want to look into their standard customer contract, average customer value and churn rate, revenue split between landscaping and lawn care, how they win and retain new clients, and who their main competitors are. I’d also want to check on how consistent their revenues and earnings have been, if there is much seasonality to their business, what equipment is included in the sale, the lease terms for their facility, how hard it is to attract and retain employees, and how much they could expand with their current capabilities.

4/ Gutter Contractor

📍 Location: Collier County, Florida
💰 Asking Price: $6,500,000
💼 EBITDA: $1,296,475
📊 Revenue: $6,404,866
📅 Established: 1972

💭 My 2 Cents: This specialty contractor provides a full suite of gutter installation and maintenance services. I like that they have been in business for over 50 years, have a large expert staff, bring in steady revenues, and have a contracted backlog of 8 to 12 months. I also really like that they have a specific niche as opposed to being a more general contractor, as this allows them to build their expertise and stellar reputation while ensuring they are not solely dependent on new construction but also can rely on their maintenance and repair work. While this is basically a straightforward business, I’d want to dig into a couple of things. I’d want to better understand the value and duration of their existing contracts, the breakdown in revenues from their different services, the various roles and skills of their staff, what sets them apart from their competitors, and what specific opportunities there are for expanding the business. Overall, this is a really nice boring business, but what really stands out here is that the property the company operates from, valued at nearly $2.5M, is included in the asking price. The sale also includes a fleet of 14 fully outfitted box trucks. With all the real property involved, you’d be able to get longer payment terms on an SBA loan and potentially a better interest rate.

5/ Commercial Plumbing Business

📍 Location: San Diego, California
💰 Asking Price: $4,500,000
💼 EBITDA: $1,582,526
📊 Revenue: $12,343,362
📅 Established: 1988

💭 My 2 Cents: Plumbing is the definition of an indispensable service that is always in demand. This company is in the commercial end of the industry, providing plumbing services across an array of building types from senior housing to military structures. I like their 35-year history, strong customer relationships with contractors and government agencies, and the fact that they have made significant investments in CAD and BIM Design capabilities to enhance their ability to complete jobs more efficiently and profitably. I also especially like their solid financials and their over a year of contracted backlog worth over $20M. I’d want to understand how they go about winning new business, if they routinely bid on projects, how much repeat business they do, and what competition they face in their market. I’d also want to explore why they’ve undergone such significant growth in the past few years, why it didn't happen earlier, and if it’s sustainable going forward.  Finally, I’d need to get a feel for the number, different roles, and qualifications of their employees. The business has two key employees who will stay post-transition and have been trained to take over the current owner’s responsibilities, including the crucial job of bidding. They both are willing to procure RME (Responsible Managing Employee) status if desired by a new owner, so licensing should not be an issue. In addition, the current owner is willing to negotiate an extended transition period to ensure everything goes smoothly. Ultimately, the company’s location in always busy southern California makes this a compelling combination of textbook boring business and growth potential.