New Deals: An express delivery courier service, crane rental business, and 3 other finds

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NEW DEALS

1/ Express Delivery Courier Service

📍 Location: Los Angeles, California
💰 Asking Price: N/A
💼 EBITDA: $701,566
📊 Revenue: $3,076,858
📅 Established: 1988

💭 My 2 Cents: This company provides a full suite of on-demand and scheduled delivery services. In operation for 35 years, they have a fleet of over 8 vehicles and employ a staff of 25 as well as additional contractors who supply their own trucks and trailers as needed. While there are large national services as well as smaller local companies in this space, competition is not a major concern as this business has proven that they have staying power, while the size of their fleet and staff show that they have strong internal processes and management in place, which should ease the transition. Plus, they are pretty insulated from economic slowdowns with their wide range of clients and services. I see both steady revenue and a lot of growth potential here, as the ongoing consumer shift to online shopping and closure of brick-and-mortar stores during Covid have led to an industry wide 5.9% CAGR over the past 5 years. Given this company’s different revenue streams, I’d want to understand the split between their on-demand, courier, and scheduled delivery services. I’d especially want to know if they have long-term contracts in place, what their repeat business looks like, how much of their revenue is recurring, and if there are any key customers that account for an outsize portion of their revenues. I’d also want to understand their use of outside contractors and how the economics of this compare to in-house deliveries. Finally, I’d need to check if there are any capital investments pending for the fleet and whether the fleet and staff are enough to support expansion or if additional capacity would be needed.

2/ Crane Rental Business

📍 Location: Santa Fe Springs, California
💰 Asking Price: $6,000,000
💼 EBITDA: $1,075,000
📊 Revenue: $2,800,000
📅 Established: 1996

💭 My 2 Cents: Crane rental is always in demand, as cranes are so expensive that it makes more sense to rent rather than own. What really makes this deal stand out for me is that this business comes with over $3M of equipment. In addition to paying for the future cash flows of the company, a buyer is acquiring a very sizable amount of real property. This equipment helps keep new entrants out given the large start-up costs they would need to compete, helps with securing financing, and provides a backstop if things go wrong. Given how important it is, I’d absolutely want to know the equipment’s age, quality, and actual market/resale value. The last thing you want is to have to pay for machines that need to be repaired or upgraded soon. I’d also want to understand how their equipment stacks up against competitors, as they could be at a major disadvantage if a competitor has newer models. In looking at their revenue, I’d be curious as to what their sales process looks like as well as what their normal backlog for future work is. I like that there is an experienced staff in place and that the owner is open to a negotiated transition period. Still, I’d want to check on who is planning on staying and what skill sets and job functions will need to be replaced. Ultimately, this should be an attractive option for someone seeking either to get into or expand in the equipment rental business.

3/ Toilet Partitions Business

📍 Location: Orange County, California
💰 Asking Price: $11,000,000
💼 EBITDA: $2,500,000
📊 Revenue: $9,900,000
📅 Established: 1996

💭 My 2 Cents: This may be the ultimate unsexy but essential boring business, as this company manufactures, distributes, and installs toilet partitions, dividers, and accessories. I really like that they are in a niche that isn’t very competitive. I also like that they have diversified their revenue stream with their manufacture, sales, and installation capabilities, as it’s always nice not to too highly depend on a single business line. They also have going for them a high customer count with no concentration issues, an experienced staff of 18 who would stay through an acquisition, and a backlog of about $3-4M. While they have great revenue numbers, I’d want to dig into what the revenue split looks like between the different business lines and what the margins are like in each. Do they have any repeat business, or is all their revenue basically attributable to new customers and jobs? I’d also want to check on possible competitors and get a feel for the role of innovation in their industry. Do they need to consistently develop new products or are they able to sell an existing line for an extended time? As this is a family-run business, I’d finally want to take a look at the owner’s role and if they hold any key sales relationships. These are standard questions, though, and with their distinctive niche and profitability, it’s hard to think of a better boring business than this.

4/ SBA Pre-Approved Fencing Contractor

📍 Location: Washington
💰 Asking Price: $2,600,000
💼 EBITDA: $708,650
📊 Revenue: $1,659,078
📅 Established: 2007

💭 My 2 Cents: This company specializes in residential, commercial, and industrial fencing solutions, offering a variety of fence types and installation methods. I like that the fencing industry isn’t dependent on new construction alone, as fences consistently need repair and upgrading, so a slowdown in new builds wouldn't be fatal. While there are a lot of fencing companies, this business has differentiated themselves by building a strong reputation for quality craftsmanship, customer service, and fair pricing. Assuming these are their key differentiators, I’d want to really understand how they are perceived in their market relative to their competitors. I’d also want to check on how stable their performance historically has been and if their revenues are generally consistent throughout the year, what their marketing and sales process looks like, whether they do their own manufacturing or obtain their products from distributors, and, given their relatively lean staff of 6, if they also use subcontractors for installation work. While it’s hard to go wrong with a fencing company, this deal is made even better by being SBA pre-approved and including 1,900 sq ft of office space and 3,800 sq ft of warehouse in the asking price.

5/ Global And Domestic Logistics Company

📍 Location: Southwest US
💰 Asking Price: N/A
💼 EBITDA: $2,916,240
📊 Revenue: $17,350,000
📅 Established: 2006

💭 My 2 Cents: This company provides domestic and international logistics services focusing on freight handling, warehousing, ground services, and project management. There are many logistics companies that compete at either the regional or international level, but few can offer as comprehensive a suite of services as this one. I like that they have lots of repeat business and that they are set up for virtual operations, so they are poised to scale easily. I also like that they have developed proprietary technology that allows them to offer customers real-time data and quality control. While it’ll be important to understand what the differentiated value of their unique technology stack is, it’s always great to be in a position where you may be able to offer a better service than competitors. In addition to wanting to better understand this proprietary technology, I’d want to ask how they acquire new business, who their key clients are, what their standard contracts look like, and who their main competitors are. Licenses are critical for this type of business, especially with their overseas operations, so I’d want to know what licenses are required and who in the company needs to hold them. Given their number of clients (over 1000 projects completed in over 110 countries) and the large staff of 26 experienced employees who will remain with the business, this company likely has clearly established processes and managerial roles in place, which would make the transition fairly simple. It all adds up to a business that can provide a nice steady revenue or can be considerably scaled up.