New Deals: A fire protection company, residential and commercial HVAC company, and 3 other finds

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NEW DEALS

1/ Fire Protection Company

📍 Location: El Cajon, California
💰 Asking Price: $2,500,000
💼 EBITDA: $800,000
📊 Revenue: $2,500,000
📅 Established: 1999

💭 My 2 Cents: I really like fire protection service companies. In addition to providing an essential service, they require a special expertise to operate and they’re heavily regulated, both of which represent an excellent barrier to entry. This company has been operating for an impressive 25 years, so they’ve likely built a reputation for quality service and a loyal client base. I like that there are a lot of complementary services a new owner could add for additional revenue. For example, they currently do not do fire alarm systems or underground work. I also like that the sale includes a significant $500K of FF&E, which provides significant downside protection. I’d want to see detailed financials for the past three years to confirm the consistency of their margins and I’d need to better understand exactly what services they offer, who their key clients are, the types and terms of their standard contracts, if they subcontract any work, how they win new jobs and if bidding is involved, and who their main competition is. I’d also want to know the qualifications and experience of their staff, if there are any pending legal issues or liabilities, who currently holds the relationships with clients and how this would be handled post-transition, and what opportunities might exist for expanding their geographical reach. The seller is open to hearing best offers, so there’s a chance of securing this business for an even better deal than currently listed.

2/ Residential and Commercial HVAC Company

📍 Location: Palm Beach County, Florida
💰 Asking Price: $3,800,000
💼 EBITDA: $928,734
📊 Revenue: $2,117,952
📅 Established: 2001

💭 My 2 Cents: HVAC services are always in demand, especially in warm climates like South Florida. I really like how this company combines their favorable location, experienced technicians, well-equipped fleet, and high-end client base to produce very high margins. What stands out about this business, though, is their very impressive 4.9 star rating on Google based on hundreds of reviews. There’s a lot of competition among residential HVAC companies, so a stellar, multi-decade reputation is the absolute best way to differentiate, as it gives the new owner an excellent base to build on. While things look pretty good, I’d want to see their financials for the last five years to check the stability and consistency of their numbers. I’d also want more info on the revenue breakdown between residential and commercial work, the number of recurring maintenance contracts, their client churn rate and average lifetime value, the level of competition in their immediate area, and how they leverage their strong reviews and broader marketing in bringing in new customers. Finally, I’d need to look into the condition of their equipment, how they use their updated technology stack, the owner’s role day-to-day, who would hold the needed licenses post-transition, and the room for growth without adding to the team or equipment.

3/ HOA Management Company

📍 Location: Mecklenburg County, North Carolina
💰 Asking Price: $2,500,000
💼 EBITDA: $594,000
📊 Revenue: $1,952,000
📅 Established: 2006

💭 My 2 Cents: This HOA/COA management company, in operation for 18 years, services over 170 customers in both the residential and commercial markets. I love their large number of clients and the extremely consistent recurring revenue they represent. Given this client base, a new owner would be well-positioned to build on what is already in place while leveraging this company’s stellar reputation and stable earnings to expand further. I also like this business’s property management niche, as associations are easier to handle than individual households, tend to be stickier clients, and provide higher revenue levels. I’d want more details on the different services they offer and the revenue breakdown between them, their client churn rate and average client duration, how they attract new clients, the competition they face, and the size and roles of their staff. I’d also be curious about how they track client satisfaction rates, what management technologies they use, if there are any ancillary services you could upsell to current clients, and what would be involved in extending their current market area. At a minimum, this deal offers a nicely profitable turnkey operation. And if everything goes right, there is some real growth potential here.

4/ Recreational Rental Business

📍 Location: Florida
💰 Asking Price: $7,500,000
💼 EBITDA: $1,588,052
📊 Revenue: $4,448,559
📅 Established: 2013

💭 My 2 Cents: This multi-location recreational marine business in Florida has shown consistent growth in both revenues and profits, as they have the advantage of multiple revenue streams and minimal competition. I also like how they are a well-established franchise with 55 employees and $1M in FF&E that includes a fleet of boats and watercraft. While there can be challenges that come along with a franchise, there can also be a lot of benefits for a potential buyer who might be entering an industry where they don’t have any direct experience. By having corporate support for key functions such as branding, operations, and marketing, a new owner can focus on optimizing their own operations and leading their team efficiently, knowing that there is a backstop of support behind them even when the current owner is no longer helping with the transition. I would need to have an in-depth understanding of the franchisor and associated franchise agreement, if there are any restrictions on the business’s operations, how they conduct the business day-to-day, how they bring in new clients, and if there is any seasonality. I’d also want to check on the condition of their equipment and if any is pending replacement, the composition of their staff, and if there are any licensing requirements. If that all checks out, then this already attractive deal also has going for it a retiring offer that is offering up to $4.5M of seller financing with a very favorable interest rate and long payback period.

5/ Mulch Manufacturer and Distributor

📍 Location: Southeast, USA
💰 Asking Price: N/A
💼 EBITDA: $1,318,000
📊 Revenue: $10,262,000
📅 Established: N/A

💭 My 2 Cents: The mulch manufacturing and distribution industry is a nice space with consistent demand for their essential product by landscaping and property maintenance companies. This company, operating from a 65-acre manufacturing facility, distinguishes itself by providing environmentally conscious mulch products through sustainable practices, giving them a competitive edge as landscaping moves toward eco-friendly solutions. I like how this focus has already helped propel consistent growth in their revenue, with a 15.7% CAGR from 2020 to 2023. I also like that there is room to improve on their active marketing and online presence, so a new owner would have a clear pathway to expanding their sales and earnings. I’d need to dig into how their revenue is distributed across their different products and services, the size and makeup of their client base, the level of repeat business, who their key competitors are, and how they find and attract new clients. I’d also need to scope out the FF&E and inventory included in the sale, the different roles and experience of their staff, if there are any pending legal issues or liabilities and the current utilization rate and ultimate capacity of their staff and facility. Overall, this is a major operation offering a proven eco-friendly way to get into or expand in the industry.