New Deals: A legal services business, niche commercial kitchen, and 3 other finds

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NEW DEALS

1/ Legal Services Business

📍 Location: Nassau County, New York
💰 Asking Price: $3,200,000
💼 EBITDA: $720,000
📊 Revenue: $2,000,000
📅 Established: 1994

💭 My 2 Cents: This business has carved out a nice niche providing process serving (aka delivering legal documents and saying, “You’ve been served”) and legal documentation for attorneys and similar clients. I like how their services are consistently in demand (as lawsuits are a part of life), and barring any changes to the regulations governing the legal services industry, there shouldn't be any systemic risk to their business model. I also like how they have been in business for 30 years, so they should have both an excellent reputation and a loyal client base. I’d want to better understand their revenue split between process serving and legal documentation, how many clients they have, what their client retention and repeat business rates are, how they go about gaining new business, and who their main competitors are. I’d also want to get a handle on how the process serving works, including if this involves outside contractors, what specific types of legal documentation they offer, and if there are any pending technological changes, such as online court records, that might affect their business. Ultimately, this looks like an opportunity to acquire an established boring business, and it’d be especially nice if you purchase its conveniently located 3,000 sq ft property that is also owned by the seller.

2/ Commercial Cooking Equipment Business

📍 Location: Nassau County, New York
💰 Asking Price: $4,100,000
💼 EBITDA: $800,000
📊 Revenue: $4,000,000
📅 Established: 2010

💭 My 2 Cents: This company specializes in selling and repairing commercial cooking equipment for clients ranging from hospitals to arenas. While there will always be a demand for new commercial kitchens, what is really great here is the large maintenance component that helps insulate them from a possible slowdown in new construction. I also like that this deal includes a fleet of outfitted trucks, 18 tenured employees, and an owner willing to stay on part-time post-transition, which could prove invaluable as their decades in the industry should mean deep-rooted ties and relationships with clients important to maintaining the business going forward. I’d want to check on the qualifications and experience of the staff and confirm that the owner holds the key client relationships. I’d also need to know the breakdown between new sales and maintenance, the current amount of work in progress and scheduled backlog, the average job size and duration, whether there is much repeat business, and the process for winning new work. Finally, I’d want to look into what would be involved in expanding their services or geographic reach.

3/ Commercial Landscaping Business

📍 Location: Miami-Dade County, Florida
💰 Asking Price: $1,300,000
💼 EBITDA: $508,373
📊 Revenue: $1,273,391
📅 Established: 2000

💭 My 2 Cents: Regular readers know that I love landscaping businesses. The landscaping business can be very competitive, so I like how this company differentiates itself by offering a full suite of services from design and installation to cleanup, maintenance, and repair. Other real positives are that they serve primarily commercial clients, which should mean steady recurring revenue, and the year-round need for their services due to their Florida location. Given how competitive the industry is, I’d want to check how consistent their results have been over the past 5 years, how much of their work is on-demand versus contracted in advance, and how their standard contracts are structured. I’d likewise want to look into their client churn rate and average lifetime value, how they capture new clients, how challenging it is to attract and keep employees, the current utilization rate of the staff and equipment, and whether there is room for growth without additional investment. If that all checks out, then this is a deal listed at a very attractive multiple with $320k of FF&E included in the sale (I’d need to check on its condition), almost 25% of the purchase price.

4/ Roofing and Siding Contractor

📍 Location: Davidson County, Tennessee
💰 Asking Price: $3,000,000
💼 EBITDA: $950,000
📊 Revenue: $13,700,000
📅 Established: 2001

💭 My 2 Cents: Roofing businesses are great because there will always be demand. After all, if your roof is broken, you don’t have much choice but to get it fixed. I like how this roofing and siding contractor has developed two different revenue streams, with 40% of their sales from commercial/multi-family projects and 60% from residential projects. I’m also impressed with what they’ve been able to do with relatively little investment in equipment and facilities, suggesting there is more scale to be achieved without the need for significant spending on staff or equipment. It’s interesting to note that they do zero marketing and do not even have a website, so this could be a prime opportunity to grow through a marketing and sales campaign. In this vein, I’d need to understand how they currently bring in new business, who holds the key client relationships, and what would be involved in transferring these post-transition. I’d also want to look into their financials for the last 3 years, how their revenue is distributed across their different services, what their current work in progress and backlog levels are, and how their staff is organized. Ultimately, it’s hard not to like a business that generates very impressive profits relative to the size of their workforce and asking price.

5/ Waste Disposal Business

📍 Location: Honey Brook, Pennsylvania
💰 Asking Price: $3,200,000
💼 EBITDA: $700,000
📊 Revenue: $2,000,000
📅 Established: 2018

💭 My 2 Cents: Waste disposal isn’t sexy but will always be needed (and won’t ever be replaced by AI). This company offers trash hauling services with a focus on clean and recyclable materials (meaning no hazardous materials!) from construction sites, retailers, and municipalities. I like the simplicity of their business model, as they drop off containers at client locations, pick them up when they are full, and deliver the contents to processing facilities. With over 300 open-top containers and 65 front-load containers, a fleet of roll-off trucks, and company drivers, they have achieved steady double-digit annual sales growth. I love the $2M of FF&E included in the asking price, which provides both a great barrier to entry and tangible assets, although I’d need to check on its condition and remaining useful life. I’d want to dig into how much repeat business and especially recurring revenue they have, if there are any client concentration issues, who their main competitors are, and on what basis they compete for new business. I’d also want to explore if the current staff and equipment could support expansion or if more investment would be needed. Considering that the owner is also offering up to 20% financing and is willing to stay on post-transition, this looks like a great boring business deal.