New Deals: A multi-location mental health clinic, wholesale food distribution company, and 3 other finds

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NEW DEALS

1/ Mental Health Clinics

📍 Location: Minnesota
💰 Asking Price: $2,150,000
💼 EBITDA: $519,724
📊 Revenue: $1,332,914
📅 Established: 2006

💭 My 2 Cents: Did you know that you can own a mental health clinic without being a licensed mental health professional or doctor in Minnesota? This multi-location mental health clinic offers a broad range of outpatient services from evaluations to therapy to medication management. I like that they have been around for almost two decades and have likely developed a very sticky client base, as patients are prone to remain with their treatment plans for many years. I also like that they provide specialized services like animal-assisted therapy that help set them apart from the competition. I’d first want to dig into the owner’s role (are they seeing patients or playing more of an admin role?) and the qualifications and tenure of the staff. I’d also want to get a handle on what their billing and payment procedures look like, the split between insurance and private pay, how they identify and bring in new patients, and their average client duration. Given their multiple locations, I’d also want to know the breakdown in revenues across the different sites, the current utilization level of each facility, and the opportunities for expansion in either their existing or new markets. If that all checks out, then this business is made even better by being SBA pre-qualified and their real estate being available for purchase.

2/ Food Distributor

📍 Location: Burleigh County, North Dakota
💰 Asking Price: $3,900,000
💼 EBITDA: $823,000
📊 Revenue: $7,600,000
📅 Established: 1986

💭 My 2 Cents: There’s nothing more essential than food, and distributors play a key role in the food supply chain. This nearly 40-year-old wholesale food distributor serves six states across the Upper Midwest. I love that they carry 13 exclusive brand products, have a 96% customer retention rate, and have a very impressive 38% profit margin (significantly higher than the industry average). On top of that, they serve a diverse clientele without significant client concentration (their largest client represents 11% of sales). I’d want to know what percentage the exclusive products are of their total sales, if they are consistently popular year over year, and the terms of the exclusivity. While their customer retention rate is great, I’d also want to see a multiyear history of purchases by individual retailers to check on the stability of their revenues and earnings. Finally, I’d need to ask what their supplier contracts look like and who their key clients are.

3/ School Bus Operator

📍 Location: Essex County, New Jersey
💰 Asking Price: $6,000,000
💼 EBITDA: $1,600,000
📊 Revenue: $4,000,000
📅 Established: 1992

💭 My 2 Cents: Unless there’s another pandemic that temporarily shuts down in-person schooling, there will be demand for school buses by reliable and responsible operators. This highly profitable school bus company, in operation for over 30 years, has an impressive fleet of 50 buses (FF&E value of $1.5M) and 81 employees. Given their scale, it’s safe to say you are buying a real business and not someone else’s job. I would also assume that they have established procedures and processes in place for almost anything that can come up, a loyal longstanding customer base, and a solid reputation in the industry. I’d need to review their financials for the past five years to better understand their revenue by client and route, their average annual fleet maintenance costs, and the impact of varying fuel prices. I’d also need to look into the makeup and condition of their FF&E and if any vehicles are pending replacement, who their key clients are, and if they normally have long-term contracts.

4/ 11 Liquor Stores

📍 Location: San Antonio, Texas
💰 Asking Price: $5,000,000
💼 EBITDA: $1,200,000
📊 Revenue: $10,500,000
📅 Established: 2014

💭 My 2 Cents: This package deal is for 11 liquor stores located in San Antonio with combined expected sales of a hefty $15 million in 2024. All the stores have been fully updated and are located in heavily populated areas with strong foot traffic. I love how recession-resistant liquor stores can be, and the combined scale of this offering leads me to believe there is the purchasing power, demand, and know-how to support further expansion. Additionally, they currently run no advertising, do not do deliveries, and do not provide in-store ATMs or lottery services. These are all potential add ons that a new owner could leverage to boost revenue. I also really like the idea of using their large hub of stores to support wholesale sales, as they are positioned to cater to a wide range of clients and locations. That said, I’d need to see a breakdown of the financials for each location and understand how they handle the management and staffing of their different locations. Overall, this looks like a nice deal, but it’s important to note that their inventory is valued and priced separately from the asking price, so this is something that will need to be figured out during diligence and negotiations.

5/ Precision Metal Shop

📍 Location: Dallas, Texas
💰 Asking Price: $1,995,000
💼 EBITDA: $600,000
📊 Revenue: $3,300,000
📅 Established: 1998

💭 My 2 Cents: This is a joint sale of two precision metal shops in Texas that provide a comprehensive suite of metalworking services to the aerospace and military sectors. The combined business operates out of a 17,000 sq. ft. facility equipped with state-of-the-art CNC machinery and holds both AS 9100 and ISO 9001 certifications, enabling them to compete for very specialized contracts with a very distinct group of clients. These clients, especially in the defense realm, can be great in terms of stickiness as they tend to be very lucrative long-term relationships. I really like that the business comes with $1.5M of specialized equipment and $2M of purpose-built production space, as it helps to provide a barrier to entry. I also like that the owner only spends five hours per week on the business and that there is a shop manager in place who currently handles the day-to-day operations. I’d also want to understand the level of their repeat business and if there is any recurring revenue, who their main clients are, and how they win and keep contracts. Note: the owner is also open to selling the real estate.