New Deals: A sprinkler & de-icing company, dump truck business, and 3 other finds

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NEW DEALS

1/ Sprinkler & De-Icing Company

📍 Location: Nebraska
💰 Asking Price: $3,200,000
💼 EBITDA: $644,074
📊 Revenue: $2,548,193
📅 Established: 1981

💭 My 2 Cents: This long-standing business has carved out a distinctive niche specializing in high-quality irrigation systems that provide a diverse range of sprinkler, snow removal, and de-icing capabilities for both commercial and residential clients. I like the recurring revenue from sprinkler maintenance and de-icing services and the seasonal demand balance (sprinklers generate revenue in warmer months, while de-icing is a winder service). Plus, de-icing can be a legal requirement for businesses, ensuring demand. They also function as an EXMARK dealer, adding another revenue stream through equipment sales and services. I really like that included in their sale are some $900K of equipment and an awesome $1.7M of real estate, involving five buildings on nearly five acres of land with significant frontage on a major highway (together, these two items alone cover 80% of the asking price). I’d want to get a handle on the revenue split between their different services, if their earnings vary by season, the qualifications and experience of their team, and the condition and assessed value of the FF&E and real estate. I’d also be curious as to how they might be impacted by changes in local water usage regulations or environmental policies and if there is any risk of this happening.

2/ Dump Truck Business

📍 Location: Arizona
💰 Asking Price: $3,900,000
💼 EBITDA: $1,575,000
📊 Revenue: $2,580,500
📅 Established: N/A

💭 My 2 Cents: Waste removal may not be very glamorous, but it’s a great boring business. This company, operating a fleet of seven dump trucks, generates a wonderful steady cash flow with extremely strong margins. I love their simple business model, reliable and consistent client base, the inclusion of their fleet valued at $1.7M, and their already very reasonable purchase price. Given their location in the thriving Phoenix area, there should be a lot of growth potential here, meaning a new owner should be able to expand their readily scalable operation by adding more trucks. This business is built around their trucks, so I’d need more detail on their condition, useful life, maintenance costs, and any pending capital expenditures. I’d also need to dig into their percentage of revenue from long-term contracts (i.e. with municipalities) vs spot jobs, how they attract and retain qualified drivers, and cost-per-mile for truck operations to include fuel, maintenance, and driver wages. Assuming the trucks are in good shape and the drivers will stay on, this looks like a chance to acquire a beautifully boring turnkey cash cow.

3/ Point of Sale Software Developer

📍 Location: Kentucky
💰 Asking Price: $1,950,000
💼 EBITDA: $577,639
📊 Revenue: $1,854,969
📅 Established: 1984

💭 My 2 Cents: This company has provided point-of-sale (POS) solutions for independent and franchised hardware retailers across the U.S. for nearly four decades, with their comprehensive software suite covering inventory management, sales orders, vendor communication, service ticketing, and rental management. While there are some major players in this space, like Square, this doesn’t mean that there isn’t room for smaller, specialty providers that can deliver a more customized service. The proof of this is that approximately 63% of their revenue is recurring, pointing to their leading reputation in their niche, established customer base, and financial stability. I’d want to look into their client retention rate, their typical client lifetime value, how they compete for clients (price, services etc) in the POS space, and how their revenue model works outside recurring subscriptions. I’d also need to understand how they support their clients in the use of their software, how they recruit and retain their employees, and how they keep up with the latest advances in the relevant technology. With the U.S. POS market expected to grow at a CAGR of 13.3% from 2023-2030, this company looks like a good play going forward. 

4/ Architecture And Planning Company

📍 Location: Ohio
💰 Asking Price: $3,200,000
💼 EBITDA: $1,058,000
📊 Revenue: $3,684,997
📅 Established: 70+ Years

💭 My 2 Cents: It’s always a real positive when a business has been around for a long time. This architecture firm has been at it for over 70 years, designing buildings for sectors from housing and healthcare to education and government. Though the industry is tied to real estate development and construction, cities like Columbus, Cincinnati, and Cleveland are experiencing robust growth in both commercial and residential sectors. Plus, their long history tells me they have a tried-and-true loyal client base and a well-earned reputation for quality work that stands up over time. They have around 50 active projects at any given time and operate from an 8,500 sq ft facility that is currently utilized at 75% capacity, allowing for growth without significant capital investment. I’d need to scope out how reliant they are on their top clients, how they bill for their work and what their standard contract terms are, what relationships they have with developers, municipalities, and corporate clients (since this is a referral-based business), what their current backlog and pipeline are. Importantly, a buyer won’t have to worry about project continuity during and after the sale as two of the current partners, who are retiring, are open to staying through a transition and the third partner and the rest of the staff are looking to remain with the business.

5/ Specialty Auto Repair Business

📍 Location: Georgia
💰 Asking Price: $2,000,000
💼 EBITDA: $691,902
📊 Revenue: $2,539,420
📅 Established: 1998

💭 My 2 Cents: I like businesses with a specific niche in the auto repair business, as they tend to be in high demand (as anyone who’s ever tried to schedule expert repair work knows) and can charge a pretty penny for their services. This business specializes in transmission repair, an industry experiencing significant growth in both average job costs (thousands of dollars per job) and margins. Plus, general auto repair shops may not have the expertise or equipment to handle transmission repairs, allowing a specialty shop like this one to dominate the market. I like their skilled team of 11, modern facility, and proven marketing strategy, all of which have contributed to a more than doubling of their revenues over the past five years. I also like how their revenue growth and ready scalability suggest several possibilities for expansion, including adding new locations or implementing a franchising model. I’d want to know what percentage of revenue comes from transmission rebuilds vs. replacements vs. minor repairs, what the current backlog looks like, the shop’s reviews, how they source their parts and if there are any supply chain vulnerabilities, the nature and condition of the $250K in FF&E and inventory included in the sale, and technician retention rate (since skilled transmission techs are hard to find). In an industry with a lot of consolidation, this looks like an appealing opportunity to acquire a very successful independent shop.