New Deals: A septic cleaning and maintenance business, commercial HVAC company, and 3 other finds

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NEW DEALS

1/ Septic Cleaning and Maintenance Business

📍 Location: Fresno County, California
💰 Asking Price: N/A
💼 EBITDA: $420,000
📊 Revenue: $1,341,862
📅 Established: 2006

💭 My 2 Cents: This business offers the definition of an essential service, as septic systems absolutely require periodic cleaning and servicing. I really like how this business generates a stable cash flow, is basically recession-proof, and is not impacted by seasonality. I also like how their mix of commercial and residential clients provides two distinct revenue streams and that a substantial $750K of FF&E is included in the sale. I also see a lot of upside potential here as the business currently does not have any of its clients on long-term contracts. A new owner could put marketing and sales systems in place that would let you lock in upwards of 150 existing clients on long-term deals, while the sellers estimate there are another 300 to 400 clients who you could go after to also turn into ongoing contracted business and recurring revenue. Given that they don’t really track their customer data, I’d want to review their financials to confirm their estimated number of monthly jobs. I’d also want to better understand the scope and duration of their typical job, how they get new customers, and how they schedule their workflow. Finally, I’d need to look into the qualifications and experience of their staff, if there are any special licensing requirements, the types and condition of the FF&E, and how involved the owners are day-to-day. 

2/ Commercial HVAC Company

📍 Location: Dallas, Texas
💰 Asking Price: $3,995,000
💼 EBITDA: $815,000
📊 Revenue: $2,200,000
📅 Established: 2005

💭 My 2 Cents: This commercial HVAC provider has several distinct things going for them. First, they focus on providing premium services to clients willing to pay premium rates as they own or have a long-term interest in their facilities. This lets this company avoid the bidding wars often involved in winning HVAC business while bringing in higher margins than normally found in the industry. Second, they have an experienced general manager who could be a huge plus to a new owner in running the day-to-day operations of the business. Last but not least, this company comes with real estate valued at $1.2M included in the sale. If their facility is worth this valuation (would need to confirm!), this could be really helpful in securing debt financing, as a loan with RE assets should garner a lower interest rate and longer payback period. I’d want to know the revenue split for the different types of projects they do, the level of their repeat business, if there are any client concentration issues, how they gain new business, who their main competitors are, and how they might increase the products and services they offer to their established client base. Ultimately, this deal looks tailor-made for someone looking to get into or expand in the HVAC space.

3/ Niche Distributor

📍 Location: Maricopa County, Arizona
💰 Asking Price: $4,000,000
💼 EBITDA: $1,425,000
📊 Revenue: $17,075,000
📅 Established: 1995

💭 My 2 Cents: I always like businesses that operate in a specific niche, especially ones with an awesome market share, so this distribution company that provides 40-50% of a particular set of products to residential home builders definitely fits the bill. I like how they have a diversified client base with no concentration issues, repeat clients that come back year after year, and numerous suppliers for their products, so there is no real risk of being unable to service their clients. What’s most interesting to me about this opportunity, though, is the $1M of FF&E and $3M of inventory included in the sale. It’s often hard to accurately value inventory, but if the real market value is anything close to the listed prices then this is a pretty amazing offer, as it would greatly de-risk the acquisition since you could liquidate the assets and make back a large portion of your purchase price. Naturally, I’d need to confirm the value of the FF&E and inventory. I’d also want to know the consistency of their financial numbers over the past three years, the different products they sell, how their sales process and distribution channels work, whether they have any exclusive distribution agreements, the roles and tenure of their staff, and if there are any special licensing or certification requirements.

4/ Interpretation Business

📍 Location: Minnesota
💰 Asking Price: $1,500,000
💼 EBITDA: $562,188
📊 Revenue: $1,856,799
📅 Established: 2009

💭 My 2 Cents: This business provides translation services to various clients from medical and educational institutions to corporate and government entities. I love their low overhead, as their employees are home-based and their translators are independent contractors, and their scalability. Given there is no physical infrastructure and the work is done by independent contractors, you can scale up as much as you want and increase earnings without additional investment. On the other hand, I also need to warn you here. While there is still a need for human translation in many cases, this is definitely an industry AI can disrupt. As real-time translators become more accessible and accurate, it’s important to understand what exactly this business offers, how insulated they are from new technology, and what they’re doing to adapt with the times. I’d need to know what risks they see to their business from AI products and advancements, what technology they use now, and how they anticipate their business evolving. I’d also want to understand the breakdown of their 400 employees between staff and contracted translators, how they source their translators, what their standard client contracts look like, if there is any client concentration, and who their key competitors are. The business is run by two partners: one who handles bookkeeping and administration and one who handles client relations and business development, so you would need to plan for their replacement post-transition. Assuming AI is not an issue, this home-based business with strong margins could be an appealing option for someone comfortable in the translation space.

5/ Commercial Cleaning Business

📍 Location: Lakewood Ranch, Florida
💰 Asking Price: $1,300,000
💼 EBITDA: $365,918
📊 Revenue: $1,177,491
📅 Established: 2018

💭 My 2 Cents: I love commercial cleaning businesses, as they generally have larger contracts, recurring revenue, and stable work. I really like that this company has also positioned themselves to do construction clean-up work, allowing them to use their equipment and capabilities to branch into a related customer base and access an additional revenue source. I’m also impressed with how they’re growing 20% yearly while spending no money on marketing, as all their new business currently comes from word of mouth. I’d want to understand the revenue split between their commercial and construction cleaning sides, who their key clients are for each side of the business, what their standard client contracts look like, who their main competitors are, on what basis they compete for new business, and if they often need to bid on new projects, I’d also be curious as to the composition of their staff, what is included in the $240K of FF&E, and the current role of the owner. I’m curious to see what growth might be possible with a serious marketing and sales effort, so I’d want to check on the current utilization rate of their staff and equipment and what expansion they could support without further investment. Overall, this is a nice boring company that also has going for them their clean books (which you don’t always find in businesses like this) and SBA pre-approval.