New Deals: An accounting firm, semi-absentee plumbing business and 3 other finds

Sign Up | Podcast | Advertise | Work With Me

NEW DEALS

1/ Accounting Firm

📍 Location: Thurston County, WA
💰 Asking Price: $4,500,000
💼 EBITDA: $1,545,842
📊 Revenue: $3,029,988
📅 Established: 1982

💭 My 2 Cents: This long-established tax and accounting practice now has over 1,100 active clients generating an impressive cash flow, while their decades-long track record and large team point to their ability to maintain their earnings in the future. Another thing that I really like about this business is their mix of revenue between different tax and accounting services. Many accounting firms I see for sale skew very heavily towards tax preparation services, which can make the revenue seasonal, but given the large amount of ongoing accounting services this business provides as well as their mix of business and individual clients, this shouldn’t be a concern here. I’d want to look into their financials for the last three years to better understand their revenue mix and associated costs and I’d want to see if they have retainer contracts that bring in steady earnings. I’d also want to get a handle on their key clients, any client concentration issues, the qualifications and experience of their staff, if any CPAs will remain with the business, and what would be involved in hiring new staff. However, any concerns about operations post-sale are eased a bit by the owners offering not only seller financing but also an extended transition period.

2/ Semi-Absentee Plumbing Business

📍 Location: Phoenix, AZ (Maricopa County)
💰 Asking Price: $3,500,000
💼 EBITDA: $900,000
📊 Revenue: $12,453,776
📅 Established: 1998

💭 My 2 Cents: Plumbing is and always will be your prototypical essential service. After all, when the kitchen sink is not working, you don’t have much choice but to get it fixed. This plumbing company is larger than what you normally see as it has a whopping 100+ employees and brings in a very high level of revenue. As a rule, I like larger companies as they tend to have refined systems in place as well as levels of management beyond a sole owner, meaning a new buyer can come in and not risk losing all of the senior leadership post-sale. I’d need to dig in more to understand the makeup of the employee base and verify what type of experience is remaining with the company, but given that the owner is semi-absentee, it’s likely there are senior people who will stay post-transition. I also like that this business comes with a significant $500K of FF&E, underscoring their scale and stability. I’d need more detail on this FF&E and their facilities, how their revenues are distributed across their different services, how they bid on new work, the general scope and duration of their projects, and the extent of their current work in progress and contracted backlog. I’d also want to know who holds their key client relationships and how this will be handled post-transition. A business this size is not for the faint-hearted, but this could be a great opportunity for the right person.

3/ Concrete Contractor

📍 Location: Nevada
💰 Asking Price: $1,500,000
💼 EBITDA: $519,784
📊 Revenue: $1,754,430
📅 Established: 1996

💭 My 2 Cents: Concrete may not be very glamorous, but we use it all the time in everything from simple structures to major highways. This particular contractor has been providing a range of concrete services to both commercial and residential clients for almost 30 years. In addition to their proven track record, I like the attractive multiple, the substantial $600K of FF&E included in the sale, and that you can purchase their 6860 sq ft storage lot for an additional $150K. While I would need to check on the condition of the FF&E, it’s always a plus to have this level of hard assets as part of a purchase. I’d need to see their financials for the past 5 years to verify the consistency of their revenues and earnings and I’d want to understand who their main clients are, what their typical projects look like, what their contracted backlog is, how they attract new clients, and what level of competition they face. I’d also be eager to get a feel for the current capacity of their staff and equipment and what opportunities might exist to expand their existing market. Finally, I’d want to establish what is involved in obtaining the needed Nevada contractors license and if the current owner, as part of their offer of transition support, would be willing to continue to hold it in the interim. Overall, this looks like a very attractive deal, and it gets even better when you consider that the owner is open to providing seller financing to a highly qualified buyer.

4/ Support Services Provider for Industrial Overhauls

📍 Location: Harris County, TX (Relocatable)
💰 Asking Price: $6,350,000
💼 EBITDA: $1,590,018
📊 Revenue: $13,523,765
📅 Established: 2014

💭 My 2 Cents: This company specializes in providing support services for scheduled industrial facility shutdowns, with a focus on reducing delays and improving safety performance. More recently, they have also expanded to undertake long-term facility maintenance and capital projects. They now operate across 10 states and their clients include major oil and gas companies. It would be important to know how their contracts are structured, as this could be either as a preferred provider or for a specific project. While project work can provide more immediate revenue, in the scenario where they are a preferred provider, their turnaround services when called for can also account for significant earnings. I like that there are major barriers to entry here as these contracts are very sticky and can be hard to win. Assuming a stable base of clients and contracts, this could be a recurring revenue machine going forward. I’d need to better understand exactly what services they provide, the standard terms of their contracts, the levels of their repeat business and recurring revenue, the extent of their work in progress and contracted backlog, who their key clients are, how they acquire new business, and who their main competitors are. I’d also be curious as to the type and condition of the equipment included in the sale, the qualifications and experience of the staff, and if there are any licensing requirements. What could make this deal even more interesting is that the owner is open to several different sale options. In the event of a full sale, they would be willing to retain a role in business, while they are also open to having an equity partner come in to help ramp up future growth.

5/ Fine Art Storage Company

📍 Location: New York
💰 Asking Price: $3,500,000
💼 EBITDA: $800,000
📊 Revenue: N/A
📅 Established: 1984

💭 My 2 Cents: This business specializes in transporting, storing, and installing fine artwork. They are effectively a moving company but in a niche that caters to a high-end clientele that includes museums, galleries, and private and corporate collections. I love that they are in a space where there will always be a need for what they do, while their long history points to a strong reputation and a loyal base of discerning customers who use their services again and again. They have a highly skilled team of 10 that includes experts in the safe handling and installation of high-value artwork, something that the competition likely doesn't. Given the distinctive nature of what they do, I’d want to understand how many clients they routinely have and who their main clients are, if there are any client concentration issues, how stable and predictable their revenues are, how they win new business, and if they have an online presence. I’d also need to know what FF&E is included in the sale, what storage facilities they use, what staff will remain post-transition, and what the owner does day-to-day.