New Deals: An HVAC business, produce distributor, and 3 other finds

Sign Up | Podcast | Sell Your Business | Work With Me

NEW DEALS

1/ Shade Cover Business

📍 Location: Arizona
💰 Asking Price: $2,500,000
💼 EBITDA: $719,500
📊 Revenue: $2,344,892
📅 Established: 1975

💭 My 2 Cents: Sometimes you can just see how a business fits their location. This company manufactures and installs shade coverings for commercial and residential clients in the Phoenix area where there is a steady high demand for sun protection solutions. I like their decades-long history, multiple revenue streams, and the stability and scalability of their straightforward business model. I also like how they now have work in California as well as Arizona, showing their capability to undertake jobs outside their primary market. I’d want to look into their revenue split between commercial and residential clients, their level of repeat business, how they bring in new work, how much competition they face, and how sensitive they are to material costs. I’d also want to get a handle on the condition of their equipment, the utilization rate and lease terms of their facility, and the breakdown of their staff. Pro tip: Warranties are important in this industry, so make sure you’re not responsible for fulfilling claims on past warranties (or have negotiated something with the seller). Ultimately, with their very solid cash flow, great margins, and the seller willing to negotiate the continued use of their qualifying license, this looks like an awesome deal.

2/ Specialty Door & Finish Work Business

📍 Location: Utah
💰 Asking Price: $8,800,000
💼 EBITDA: $2,559,641
📊 Revenue: $5,800,709
📅 Established: 1989

💭 My 2 Cents: This business has built a stellar reputation providing high-quality doors and finish work to contractors and homeowners in the Intermountain West region. I really like their location in a high growth geographic area, different revenue streams with their mix of B2B and B2C clients, and high margins from their premium market positioning. I’d need to better understand their breakdown in sales for new construction versus renovations, how their margins compare between fabrication and installation work, if there are any possible client concentration issues in their B2B business, how they source new jobs, how they distinguish themselves from local and regional competitors, how they handle relations with their suppliers, and the size and different roles of their staff. Ultimately, you don’t see a lot of home improvement businesses of this scale that have been around for over 35 years.

3/ Roofing Business

📍 Location: N/A
💰 Asking Price: $7,000,000
💼 EBITDA: $1,552,429
📊 Revenue: $14,372,680
📅 Established: 2010

💭 My 2 Cents: Readers know I like the roofing business because its an essential service that is basically always in need regardless of economic conditions. This established company offers a full range of residential and commercial roofing installation, inspection, and repair services. They operate in an expanding metro area, benefiting from a growing real estate market with its strong demand for roofing work. Other real positives are their staff of 22 which includes managers and experienced technicians, large well-equipped facility, and the $1M worth of FF&E included in the offering. I’d need more detail on the percentage of revenue that comes from their different services, the sales breakdown between their residential and commercial clients, if they do much insurance-related work, what seasonality looks like, and how they differentiate themselves in a space where there can be a lot of competition. I’d also need more info on who they key license holders in the business are, the nature and condition of the FF&E, and the day-to-day role of the owner. For someone with a contractor background, this looks like the chance to acquire a proven cash producer with a lot of growth potential.

4/ HVAC Company

📍 Location: Idaho
💰 Asking Price: $5,460,000
💼 EBITDA: $1,400,000
📊 Revenue: $3,500,000
📅 Established: 1998

💭 My 2 Cents: HVAC businesses for good reason are one of the darlings of the SMB space. They can count on steady demand, are recession-resistant, and bring in a stable flow of revenues from recurring services and new construction. This company, in operation for 27 years, handles both new work and service contracts for a range of residential and commercial clients. Located in a rapidly growing region, they recently moved to a 10,000-square-foot facility to accommodate future expansion. They have the staff and equipment in place to handle further growth, while their impressive margins indicate a well-run business with efficient operations. I’d want to know more about their service contracts, including what percent of revenue they represent, how long they typically last, and their renewal rate. I’d also need to find out how they define their geographic service area, if there is any seasonality to their cash flow, how they’ve managed challenges in hiring and retaining HVAC technicians, and what their current plans for expansion are. Assuming their key employees will stay on, this should be a nicely lucrative turnkey operation (with seller financing available).

5/ Produce Distributor

📍 Location: Florida
💰 Asking Price: $4,000,000
💼 EBITDA: $1,203,875
📊 Revenue: $14,074,872
📅 Established: 2001

💭 My 2 Cents: This Florida produce distributor offers a wide variety of over 600 fresh items sourced from the U.S. and Central America. In addition to distribution, they also provide cooling and storage services, helping to distinguish them from their rivals in the very competitive produce space. They have a fully equipped cold storage and packing warehouse in which they recently invested $1M in replacing the cooling units. They also come with a whopping $2.7M worth of FF&E, representing a significant asset base and a costly barrier to entry for new competitors. Add to this their well-established relationships with their suppliers and their ready potential to expand their operations throughout their state, and you have the inklings of a real winner. However, I’d want to dig into their wholesale versus retail sales, how they handle supply chain disruptions, how seasonal growing patterns impact their revenues, the condition of the cold storage, material handling, and food processing and packaging equipment, whether any other capital expenditures are pending, and the lease terms for their facilities. Overall, this looks like a great remote opportunity, as their well-established team includes two experienced managers capable of running the business in a semi-absentee ownership mode.