New Deals: A vehicle smog check business, hurricane shutter business, and 3 other finds

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NEW DEALS

1/ Lawn Care Business

📍 Location: Wisconsin
💰 Asking Price: $1,640,000
💼 EBITDA: $534,223
📊 Revenue: $1,515,644
📅 Established: N/A

💭 My 2 Cents: While lawn care is a great boring business with solid margins that’s not going anywhere, it’s also a very crowded industry. So when buying one, it’s important that it provides top-notch service. For this specific business, this seems to be the case. They have a full staff of skilled long-term employees, a stellar reputation and loyal client base, and a steady level of repeat business. I also like their location in a growing area and the more than $400K in vehicles and equipment included in the asking price. However, I’d need to know more about the business, including when they were founded, how consistent their earnings have been over time, and if their revenues are now holding steady or continuing to increase. I’d also want to understand who their clients typically are (it is all residential, or some commercial too?), how they bring in new business, if they have contracts that provide predictable recurring revenue, and what seasonality looks like. Ultimately, their strong reputation and established operations should give a new owner an excellent base for an expanded marketing effort to scale things up.

2/ Hurricane Shutter Business

📍 Location: North Carolina
💰 Asking Price: $7,800,000
💼 EBITDA: $1,595,880
📊 Revenue: $5,830,739
📅 Established: 2003

💭 My 2 Cents: This business provides storm and security shutters to residential and commercial clients across North Carolina. I like how there is a real need for their products and services given the state’s history of hurricanes and other high-impact weather events. I also like their reputation for high-quality products and customer service, strong vendor network, and exclusive rights to certain products which gives them a nice moat against possible competition. I’d want more detail on their $1M in work in progress and how far out their revenue projections go, who their key vendors are and if they are dependent on any for a significant proportion of their sales, how they source new clients, and how much competition they face. I’d also need to get a handle on the qualifications and experience of their staff, and what would be involved in replacing the owner. If that all checks out, then this business is well-positioned to benefit from both North Carolina’s growth and the increasing frequency of storms due to climate change.

3/ Painting and Restoration Business

📍 Location: Maryland
💰 Asking Price: $4,250,000
💼 EBITDA: $918,871
📊 Revenue: $2,595,553
📅 Established: 1970

💭 My 2 Cents: What will draw a lot of buyers to this painting and restoration business is that it’s currently absentee-owned. But what should keep them hooked is that it's been operating successfully for over 50 years while building a AAA-rated reputation and loyal client base. Painting is known for its low barriers to entry and high level of competition, so it means a lot when a business has been able to survive this long while generating consistent revenues and cash flow. I like their solid margins, the fact that the seller is willing to offer up to $1M in seller financing, and the inclusion of $700K in real estate and $350K in FF&E and inventory in the purchase price. When digging into this deal, I’d first want to understand how they are able to service an area running from NY to MD. I’d also want to check the revenue split between their residential and commercial projects and get a handle on their level of repeat business. For someone who wants to be absentee, this could be a great opportunity, but it seems like they’re set up for further geographic expansion for an owner who wants to be more active as well.

4/ Pavement Striping Business

📍 Location: Colorado
💰 Asking Price: $3,500,000
💼 EBITDA: $1,087,370
📊 Revenue: $4,607,534
📅 Established: 2006

💭 My 2 Cents: Pavement striping is another classic boring business with consistent demand and some repeat revenue. I like that pavement striping clients such as parking lots, municipalities, highways, schools, and commercial properties always need periodic restriping to maintain compliance with safety regulations. This company works with top general contractors, which is nice because it means they’re getting more repeat business. I like their solid reputation, proven expertise, strong cash flow, and potential to expand into additional geographic markets. One other benefit is they operate from an 8,700 sq. ft. facility available for purchase separately, which could help extend the amortization on an SBA loan and thus improve your post-debt-service cashflows. That said, I’d want to look into their backlog or pipeline, see if there is any concentration on the general contractors they work with, and understand who owns the relationships with these contractors. Ultimately, this is a great boring cash producer made even more attractive by being SBA pre-approved and open to financing.

5/ Vehicle Smog Check Business

📍 Location: San Francisco, California
💰 Asking Price: N/A
💼 EBITDA: $887,333
📊 Revenue: $1,701,164
📅 Established: 2013

💭 My 2 Cents: There’s nothing better than a legally mandated service. This test station specializes in both regular and STAR-directed smog checks for a variety of vehicles. They are teched up and employ extremely efficient processes, typically completing checks in 15-20 minutes, resulting in their having serviced an amazing 130,000 vehicles over their 10+ years in operation. I really like how there is a guaranteed demand for their services, as there are strict requirements in California for these tests to be performed on a routine basis. I also like that they have an awesome level of repeat business, with a high number of their customers coming back again for the mandated periodic tests. I’d be curious as to how often drivers are required to get the testing done, the capabilities and condition of their facility and equipment, the roles and responsibilities of their staff, and the licensing and certification required to operate the business. I’d also ask how many other options drivers have within a 10-mile radius, how they differentiate themselves from the competition, and what marketing they currently do. Finally, I’d want to know what volume of tests they could handle before needing to add to their facilities, equipment, or staff. For someone looking to get into a recession-proof niche, this business offers both great margins and serious growth potential.