New Deals: A home services marketplace, auto body shop, and 3 other finds

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NEW DEALS

1/ Home Services Marketplace

📍 Location: Florida
💰 Asking Price: $2,100,000
💼 EBITDA: $529,419
📊 Revenue: $1,768,856
📅 Established: 2019

💭 My 2 Cents: This online platform connects moving and home service providers with consumers across 300 cities in 49 states. I’m impressed how in 5 years they already have 67,000 registered contractors and 44,000 email subscribers, while their 4.8-star Google rating with 3,600+ reviews is a great indicator of high-quality performance. They have a very lean operation, with much of their staff located in the Philippines, which helps underpin their outstanding 35% net margins. I really like how they are 95% complete with the development of both IOS and Android mobile applications, which could significantly increase the reach of their platform. Since the business has only been around for 5 years, I’d want to review their financials for each year to see how much they’ve invested in the platform, what the key cost drivers are, and what their revenue and earnings trends look like. I’d also want to get a handle on how their revenue model works, the volume of jobs sourced through the platform each year, the expected completion date for the mobile apps, and what challenges exist with managing a large contractor network. If everything checks out, this is a business with a tremendous amount of potential.

2/ Auto Body Shop

📍 Location: California
💰 Asking Price: $10,500,000
💼 EBITDA: $5,244,692
📊 Revenue: $9,178,418
📅 Established: 2018

💭 My 2 Cents: As anyone who has ever had a fender bender knows, the services of auto body shops will always be in demand. This collision center is I-CAR certified, has multiple Direct Repair Programs with insurance companies (meaning they get a lot of free referrals), and operates out of a leased 6,000 sq. ft. facility with a large lot that provides both current storage and room for further growth. They have several revenue streams, including repair work, significant fleet contracts, and the online sale of vehicle parts. I really like their proven marketing strategy, diversified revenue sources, high EBITDA, and great margins. The fleet clients are particularly interesting to me as these B2B customers come with a lot of repeat revenue from regular repair and maintenance work. That said, I’d want to see the revenue split across repair work, fleet clients, and online sales. And since the facility is leased, I’d also want to find out when their lease is up and whether there is a clear renewal option that’s already been negotiated. Ultimately, while auto body shops can be a wonderful boring business, they don’t operate themselves. So, the fact that the seller is willing to stay on for up to a year is a huge positive.

3/ Commercial Remodeling and Maintenance Business

📍 Location: Virginia
💰 Asking Price: $3,200,000
💼 EBITDA: $649,487
📊 Revenue: $3,732,843
📅 Established: 1992

💭 My 2 Cents: Based in Virginia, this company provides commercial maintenance, remodeling, and renovation services across 11 states. I like their significant geographic reach, experienced staff, and excellent reputation built over their 30+ year history. They have a number of long-term relationships with major clients like Wells Fargo and Norfolk Southern Railway, so you can figure they are likely to continue to have a steady stream of work going forward. Plus, with these businesses, there are often maintenance contracts in place that can provide steady, predictable income. To get a better feel for their operations, I’d want to see their revenue and earnings breakdown by client type, work performed, and geographic region. I’d want to know their current work backlog and pipeline, if there are any client concentration issues, and the value and condition of any included assets. I’d also be curious as to the challenges in operating across 11 states, what would be involved in their adding bonding or expanding into larger projects, and how reliant they are on the owner for day-to-day operations.

4/ Towing Company

📍 Location: California
💰 Asking Price: $7,980,000
💼 EBITDA: $1,500,000
📊 Revenue: $5,000,000
📅 Established: 2014

💭 My 2 Cents: This company operates from 4 locations with a fleet of 13 trucks, offering 24/7 towing services for private properties (they do not provide law enforcement towing). Private property towing can be more challenging to run than roadside assistance towing because of the disputes with vehicle owners, but this business has reached a scale where you’re probably not going to be the one dealing with owners yourself. I like their multi-locale setup, proprietary cloud-based system for tracking vehicle violations and towing operations, solid client base, and scalable operational model. I also like their strong growth potential, as the US towing market is projected to continue to expand. However, I’d want to know their revenue breakdown by location, if any key clients account for more than 10% of their revenue, and what contracts they have in place with property managers and HOAs. There are nearly $1M in assets included in the sale, so I’d also want to understand the condition of the tow trucks and impound lot equipment. I suspect their proprietary software could represent another revenue stream, so I’d finally want to explore what would be involved in separately monetizing it.

5/ Carpet Cleaning & Remediation Business

📍 Location: Alabama
💰 Asking Price: $1,700,000
💼 EBITDA: $519,144
📊 Revenue: $1,348,551
📅 Established: N/A

💭 My 2 Cents: This company offers a full suite of carpet cleaning and restoration services for both residential and commercial clients. Their positives include a stellar reputation, loyal customer base, and many long-term service contracts that bring in consistent recurring revenue. In what can be a crowded space, I like that they have certifications from industry leaders like IICRC, the Carpet and Rug Institute, and WoolSafe, which can help set them apart from competitors. I also like their very solid margins and the $420K of FF&E included in the purchase price. The current owner works less than 15 hours per week and has an experienced management team in place, so this deal should appeal to a buyer seeking a less hands-on opportunity. I’d want more detail on their revenue split between cleaning and remediation services, who their key clients are, the renewal rate for their long-term contracts, and how they win new jobs. I’d also need to ask about the roles and responsibilities of their staff and if they subcontract any work, the condition and projected lifespan of the FF&E, and if they have an online presence and reviews. Overall, this looks like a very attractive operation that’s asking for a fair multiple considering the great base of recurring revenue.