New Deals: A commercial painting contractor, concrete cutting and demolition company, and 3 other finds

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NEW DEALS

1/ Commercial Painting Contractor

📍 Location: Colorado
💰 Asking Price: $6,400,000
💼 EBITDA: $2,256,790
📊 Revenue: $7,124,770
📅 Established: 1996

💭 My 2 Cents: Painting companies especially at this scale can be great profitable businesses. This commercial contractor specializes in large, complex projects such as hospitals, schools, and multi-family housing. In operation for nearly three decades, they have an established client base that includes prominent local general contractors, preferred pricing arrangements with major suppliers, and an exemplary safety record Add to this their awesome $3.5M backlog, which provides a significant runway of expected income for a new owner, and you have a killer business. However, I’d need to better understand how diversified their client base is and if there are any concentration issues, how they source new jobs to include any bidding involved, the timeline and expected conversion of their current backlog, the nature and condition of any FF&E, and what options there might be to expand into industrial painting. Ultimately, this looks like an excellent turnkey opportunity, as they have a staff of 20 in place and the owner, who is retiring, is willing to stay on for a transition period.

2/ Concrete Cutting and Demolition Company

📍 Location: Arizona
💰 Asking Price: $2,800,000
💼 EBITDA: $513,000
📊 Revenue: $1,656,000
📅 Established: 1989

💭 My 2 Cents: Anyone who’s been reading my newsletter for a while knows that I like niche service businesses that require specialized skills and equipment. This particular company specializes in industrial-grade concrete cutting and demolition services, with a long history of handling complex jobs, including professional sports arenas, major commercial construction sites, and government contracts. I like their sterling reputation for precise work, highly trained staff, and significant amount of specialized equipment included in the sale. I also like that the seller says the business has been intentionally kept on the smaller side to accommodate their lifestyle choices, so there could be a lot of untapped potential for growth for a new owner. I’d want to look into how much competition they face in their Phoenix market, how much of their revenue is derived from government contracts versus private clients, the amount of work in progress and on the backlog, the condition of their FF&E and facility (available for sale separately), and how readily scalable they are for larger regional projects. Ultimately, what I like about this niche is that while these projects are often one-off, there’s the opportunity to secure ongoing work with developers and municipalities.

3/ Courier Service

📍 Location: Texas
💰 Asking Price: $4,730,000
💼 EBITDA: $1,263,395
📊 Revenue: $3,203,623
📅 Established: 2004

💭 My 2 Cents: This Texas-based courier service focuses on short-haul air freight trucking, concentrating on routes to and from DFW Airport (one of the busiest cargo airports in the US). I like the stability of this business as well as the complicated process for new entrants to enter and compete, as there are a lot of hoops to jump through to be able to warehouse at airports and be compliant with all local, state, and federal regulations. I also like their long-standing client relationships, advanced logistics technology which enables very cost-efficient operations, 26,000 sq ft bonded warehouse, and nearly $1M in hard assets between FF&E and inventory included in the sale. Given its critical importance, I’d need more detail on their fleet to include its capacity and current utilization rate, annual maintenance schedule and cost, and if there are any pending capital expenditures. I’d also want more info on their standard contracts, required certifications with TSA or other regulators, the lease terms for their facility, whether there is space to grow at the airport, and the qualifications and experience of their staff. The U.S. courier and delivery services market is projected to expand at 7.5% CAGR through 2030, so this company should have no problem continuing to grow.

4/ Landscape Design and Installation Business

📍 Location: Colorado
💰 Asking Price: $2,500,000
💼 EBITDA: $975,000
📊 Revenue: $1,250,000
📅 Established: 2007

💭 My 2 Cents: This business focuses on high-margin landscape design and installation projects, including softscape, hardscape, and outdoor features like water installations and fire pits. In 2024, they completed jobs for 62 customers with an impressive average project size of $20k. I like that they are SBA pre-approved and are available at a very reasonable multiple. What really stands out, though, are their exceptionally high profit margins. I’d definitely need to dig in to understand how their overhead is so low and these margins are so strong, but if they are legit, this means they have found a great niche, a high-paying client base, and a method for keeping their internal costs down. However, I’d want to get a handle on the revenue split between their different services, how they acquire new jobs, the amount of work currently in progress or in the pipeline, if there is any seasonality with their Colorado location, and the roles and responsibilities of both their employees and owner. Ultimately, there is always competition in the landscaping industry, but a solid reputation and client base can go a long way.

5/ Luxury Home Staging Company

📍 Location: California
💰 Asking Price: $6,500,000
💼 EBITDA: $1,521,054
📊 Revenue: $3,190,024
📅 Established: 2001

💭 My 2 Cents: This is a business you don’t often see for sale. They provide a mix of luxury home staging, vacation rental design, and interior design services, currently serving over 600 properties annually throughout California. I like how they come with a whopping $6m in assets, including a vast inventory of furniture and home furnishings. While the hard assets mean you are buying something tangible and not just future expected earnings, it’s critical to dig in on what their true value is. So, I’d need to really understand the quality, condition, book value, and market value of these assets. Styles can also change quickly and furniture they own now might not be as useful in the future, so I’d need to find out how frequently they need to purchase new items to stay current. Additionally, furniture, as compared to other hard assets, can have a very limited resale value, so, in a worst-case scenario, I’d want to learn what a realistic liquidation value of the assets would look like. Finally, I’d want to know how much competition they face in different markets in California, how they attract new clients, if there are opportunities to expand into virtual staging or other digital platforms, their strategy for handling market downturns like the 2023 “mansion sales tax” slump, and the potential impact of the recent LA fires.