New Deals: A property management company, septic company, and 3 other finds

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Hello SMB Deal Hunters!

Thanks for all the great feedback from the deals I shared on Tuesday!

🔥 Community Top Picks from the Last Issue:

#1: Distributer of mission-critical fastening systems with 92% repeat
#2: Medical records and billing company with proprietary software
#3: Ski resort transportation business in operation for over 25 years

I’m excited to share 5 new deals worth checking out.

Today’s issue is sponsored by MaidThis, the first and only national franchise focused on residential & Airbnb cleanings.

1/ Property Management Company

📍 Location: Palm Springs, California
💰 Asking Price: $2,500,000
💼 EBITDA: $560,000
📊 Revenue: $2,700,000
📅 Established: 2006

💭 My 2 Cents: This business offers a full suite of concierge and property management services. I really like their Palm Springs location, as there are both a huge number of homeowners who do not live there year-round and a steady flow of vacationers who need their services. I also like their multiple revenue streams, which include errands, personal tasks, and home maintenance. Clients pay either via monthly retainer, a block of time that is automatically renewed when depleted, or, if they are a local vendor, membership fees for first-right privileges when clients need more extensive work done. I’m curious what their retention rate is, what their average revenue is per client, whether most of the work is outsourced or done in-house, and whether there are issues in finding people to do the work. I’d also want to check on their competition and current marketing and sales strategy. While there’s a lot of demand for property management, what’s exciting about this company is all of the ancillary services they can offer to clients, which makes me believe there is a ton of room for growth here for someone looking to expand on and scale their current offerings.

2/ Septic Company

📍 Location: Duval County, Florida
💰 Asking Price: $3,500,000
💼 EBITDA: $566,393
📊 Revenue: $4,840,282
📅 Established: 1999

💭 My 2 Cents: This company provides the always-in-demand essential services of septic repair, service, installation, and removal. I really like that they have a stable base of revenue coming from the repair and maintenance side of the business. It’s always nice to have consistent work outside of new construction. At the same time, I also like how they are able to increase their profitability through the high-margin work involved in the removal and installation of septic systems, as the septic industry has been developing new, higher-cost systems that can now be upsold to both old and new customers. Given the importance of their service and maintenance work, I’d want to know how much of their revenue comes from this side of the business, if there are any recurring revenues stemming from long-term service contracts, and how often the buyers of new systems convert into steady clients. In operation for an impressive 25 years, this business comes with 20 employees as well as nearly $1M in equipment. I’d want to check on the current age and condition of the equipment, if there are any managers on staff likely to stay post-transaction, what the role of the current owner is, and if the required licenses come with the sale or would need to be acquired. If that all comes back clean, then this looks like a really nice boring business.

3/ Medical Staffing Business

📍 Location: Connecticut
💰 Asking Price: $4,477,824
💼 EBITDA: $1,895,216
📊 Revenue: $2,296,726
📅 Established: N/A

💭 My 2 Cents: As the demand for medical staffing agencies has boomed since Covid, so have their profits and scalability. You can see this in this particular agency with their established clients, clinicians, schedules, and a fully built-out infrastructure. I especially like how they’ve developed their own application and have the ability to take card payments and do daily cash-outs. I also like that the potential total market is massive, as the business can be operated from anywhere and thus can be expanded not only in-state but also out-of-state. While their margins look great, I’d want to ask if there is ever recurring revenue once a placement is made, or if it is all an upfront fee. I’d also be curious as to how often their clients come back for additional placements. There can often be different models in how staffing agencies are run, so I’d need to understand how this one operates, including what the owner and each of the staff do, how they recruit new staff, why practitioners choose them as opposed to their competition, and how their cost structure compares to their competitors. Assuming everything checks out, this deal could be a real winner.

4/ Signage And Lighting Company

📍 Location: Volusia County, Florida
💰 Asking Price: $2,700,000
💼 EBITDA: $650,000
📊 Revenue: $3,500,000
📅 Established: 2015

💭 My 2 Cents: This SBA pre-qualified signage and lighting company provides services from design to installation and maintenance for both local and national businesses. A lot of signage companies have some of these capabilities but will have to outsource others, so it’s great that this company can work with a client through the entire project. This way, you can capture all of the revenue and ensure that everything's done at a high level the entire time. I like that this company does commercial lighting maintenance, as this provides a recurring revenue stream that isn’t tied to new projects. I also like that one of the owners is interested in staying on long-term in a sales capacity. The relationships a seller has with clients can be really important, so knowing you’ll be able to continue to leverage these in the future is a real plus. Speaking of clients, I’d want to know more about them, including what the average customer relationship looks like, how many of their services the typical customer uses, and if any of these services represent higher margins. I’d also want to know the length of a normal project from proposal to completion, the usual payment terms, and if there is any current work backlog. I’d finally want to check on the utilization of their office and warehouse to confirm that they have the space and equipment required for their current level of sales and get a sense of what might be needed for expansion.

5/ Electrical Contracting Company

📍 Location: Volusia County, Florida
💰 Asking Price: $2,200,000
💼 EBITDA: $625,000
📊 Revenue: $4,100,000
📅 Established: 1990

💭 My 2 Cents: This electrical contracting company has been in business for over 30 years, meaning they should have both an excellent reputation for quality work and many valuable long-term customer relationships. I like that they handle residential and commercial work, as this means revenue flows are not dependent on any single business line. I also like that they have over 20 employees and a master electrician who is willing to stay on for two years, but I’d want to check on how many of the staff will be leaving as well as what the current ownership does and what would be involved in replacing them. Other things I’d want to dig into are their current work backlog for 2024, their sales process, especially who does the quoting and submitting of bids, what types of projects they usually take on, how long an average project takes, and how far out they contract for future work. Otherwise, given their location in the steadily growing Florida, there could be a real opportunity to scale here, so I’d want to get a feel for possible expansion areas as well as a sense of their current competition. 

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See you next Tuesday!

-Helen Guo
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Disclaimer

This publication is a newsletter only and the information provided herein is the opinion of our editors and writers only. Any transaction or opportunity of any kind is provided for information only; SMB Deal Hunter does not verify nor confirm information. SMB Deal Hunter is not making any offer to readers to participate in any transaction or opportunity described herein.