New Deals: An ambulance medical billing company, fencing contractor, and 3 other finds

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NEW DEALS

1/ Ambulance Medical Billing Company

📍 Location: Florida
💰 Asking Price: $3,900,000
💼 EBITDA: $800,000
📊 Revenue: $1,800,000
📅 Established: 2017

💭 My 2 Cents: I’m generally a big fan of medical billing companies as they provide an important service that is basically always in demand. I like how this business has carved out its own distinctive niche in providing billing assistance exclusively to ambulance operators, meaning they should have a loyal, long-standing client base. I also like that they have clients in eight different states, as this suggests there is a lot of room for expansion and that they are set up in a way that growth into new areas is readily feasible. Given their specific niche, I’d want to better understand what services they provide, what their standard contract looks like, how much repeat business they have, and if they have proprietary software or systems that they use in their billing. I’d also want to get a feel for whether their clients are more hospital groups or private services, what the mix in their billing is between private pay and insurance, and what their marketing process looks like. With a solid team of 18 in place and, according to the seller, no prior experience needed to take over, this could be a great opportunity to take over a steady cash-flowing turnkey business.

2/ Fencing Contractor

📍 Location: Florida
💰 Asking Price: $5,799,999
💼 EBITDA: $1,500,000
📊 Revenue: $6,000,000
📅 Established: 50+ years ago

💭 My 2 Cents: I love seeing companies of this size that have a long history. In operation for over half a century, this fencing contractor should have an excellent reputation, and, with 30 employees, it’s very likely they have the staff in place that can guide the business during the transition. I really like that they have a strong backlog of $1M worth of work, so there is some runway for a new owner, and that the transaction comes with over $500K in inventory, machinery, and vehicles. If wanted, there is also a 6-acre property available for purchase. I also like that they have a good split of 60% commercial to 40% residential work as well as annual contracts in place with multiple school districts. It’s always great to have different revenue streams in case one part of the business is affected by a downturn. Given their potential importance, I’d want to know what the contracts with school districts look like and how much of this is new construction versus maintenance. I’d also want to understand how far in advance they are bidding on future work, what their project and payment timelines generally look like, what their licensing requirements are, how involved the current owner is in day-to-day operations, how they gain new work and, based on the current components of their marketing plan, how much business comes from SEO, referrals, bidding, and local contractors.

3/ Port-O-Potty Company

📍 Location: California
💰 Asking Price: $10,500,000
💼 EBITDA: $1,700,000
📊 Revenue: $6,400,000
📅 Established: N/A

💭 My 2 Cents: Portable bathrooms are a great boring business because it’s, in some ways, the most essential business. After all, if you need to go, you need to go. The port-o-potty rental industry, as a rule, also has great margins and an easy-to-understand business model. I like that this company has some scale to it, coming with 20 employees as well as $1.5M worth of inventory. Given their size, they should have a well-trained team in place and should be able to handle much larger projects. While the high level of inventory can provide something of a moat, this is an industry where you have to always be aware that new competition can always pop up, so I’d want to know how they distinguish themselves from competitors. Do they generally have to compete on price or service or both? I’d also want to know if they have any large repeat clients, whether there are any client concentration issues, the rental stock’s age, condition, and possible need for replacement, what the current owner’s role is, how they land new business, what geographic range they cover, and how far they can expand from their main facility.

4/ Fireproofing And Insulation Company

📍 Location: New Jersey
💰 Asking Price: $2,800,000
💼 EBITDA: $800,000
📊 Revenue: $3,740,712
📅 Established: 1991

💭 My 2 Cents: This company provides end-to-end fireproofing and insulation solutions for large commercial projects. I like that they are in a stable industry that is projected to grow at a decent 4.9% CAGR through 2030. I also like that while they are linked to the construction industry, they need not be dependent on new construction for income as fire systems need to be monitored and serviced. I’d want to confirm that they do indeed do servicing and maintenance, but even if it turns out that they’re currently more limited in this area, this could be a real opportunity to diversify into another revenue stream. Another positive is that their business is solely driven by word-of-mouth referrals, with no money being spent on advertising. This suggests not only that they have satisfied customers and a stellar reputation, but also that there could be clear avenues for growth by investing in marketing. I’d want to know more about their client base, including how much repeat work they have and how dependent they are on business relationships held by the owner. I’d likewise want to get a handle on who their main competition is and if they provide any special services that differentiate them from possible competitors. Finally, I’d want to understand any licensing and insurance requirements and if they face any potential regulatory concerns.

5/ Large Plumbing Company

📍 Location: Florida
💰 Asking Price: $8,999,999
💼 EBITDA: $1,965,697
📊 Revenue: $14,389,041
📅 Established: N/A

💭 My 2 Cents: This plumbing company serves mostly residential but also commercial and municipal clients throughout Florida. I really like their size, as they have an impressive 50 employees and undertake some 45-55 jobs per month with an average ticket size of $20,000. As I often say, having some scale is an awesome thing as it points both to a strong team in place and an excellent reputation. The current owners note how the company basically runs itself, meaning a new owner can focus on working on the business instead of in the business, leaving you free to concentrate on planning for future opportunities and growth. I also like that there is a 1-acre property valued at $500K that is included in the asking price and there is likely a large value in vehicles and machinery transferring with this business, but I’d need to understand the specifics here. Given that they keep 40-60 days of backlogged work at any given time (which is great), I’d be keen to understand how they decide what jobs to do and how they win new projects. I’d similarly want to understand their current marketing plan, whether they frequently receive business from relationships with contractors and home builders or from direct outreach with property owners, what the revenue split between new construction, renovation, and maintenance looks like, the standard customer acquisition cost and lifetime value, and the degree of repeat business. I’d also look to check customer reviews just to validate the quality of their work. I don't anticipate any issues, but I’d finally want to ensure that there will be skilled technicians sticking around post-transition. If that all checks out, then this already very attractive deal is made even better by the availability of SBA and seller financing.