New Deals: A landscaping business, digital marketing company and 3 other finds

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NEW DEALS

1/ Landscaping Business

📍 Location: Massachusetts
💰 Asking Price: $2,295,000
💼 EBITDA: $656,000
📊 Revenue: $4,918,000
📅 Established: N/A

💭 My 2 Cents: While landscaping and lawn care can be a crowded space, there are a number of things that help this company stand out. First is that they don’t face any real seasonality issues, as they also offer much-needed snow plowing services during the winter in their Massachusetts area. They also have a mix of commercial and residential clients, a high percentage of clients on multi-year contracts, and a focus on providing high-margin fertilization and spraying services, with the hard-to-obtain permits for these services providing a nice barrier to possible competitors. I like that their facility, available for separate purchase, has plenty of space to support future growth and I especially like that $2.4M in FF&E (more than the asking price) is included in the sale. While acquiring this level of assets would be great, I’d need more detail on the equipment and vehicles, including their nature, condition, useful life, and how they were valued. I’d also want to look into the company’s revenue split between commercial and residential clients, the terms of their standard contracts, how they bring in new business, and what opportunities exist for expanding their services or geographic reach. The current owner is basically absentee, as there is a tenured management team in place, so this looks like a very attractive turnkey boring business.

2/ Digital Marketing Agency

📍 Location: Tampa, Florida (Remote)
💰 Asking Price: $2,399,000
💼 EBITDA: $727,977
📊 Revenue: $1,271,724
📅 Established: 2013

💭 My 2 Cents: This performance digital marketing agency serves B2B clients in high-spend fields such as healthcare, law, and financial services. They have 55 active clients, for whom they provide an average 5x ROI, while with their current staffing, they could expand to more than 80 clients. I like their high-value clientele, average contract length of over 9 months, remote business model, and ready scalability. However, above all else, I love the extremely impressive margins with this business, meaning that if a new owner can further scale their operation, then every new client will have a large impact on the bottom line. I’d want to understand their full-service offering (paid search, paid social, email marketing, etc.), average client retainer size, if there are any concentration issues (which can be common with marketing agencies who charge based on ad spend), and contract renewal rates. I’d also want to understand what their sales funnel and sales team look like, as that is going to be key to scaling this business. This deal should appeal to someone who sees this business’s growth potential and high earnings upside. It could also work well for someone looking for a more hands-off situation, as the current owner works only about five hours per week primarily overseeing finances.

3/ Electrical Contractor

📍 Location: New York
💰 Asking Price: $4,000,000
💼 EBITDA: $1,359,923
📊 Revenue: $6,168,577
📅 Established: 1991

💭 My 2 Cents: This electrical contractor specializes in renovations, conversions, and new construction for various commercial clients including supermarkets, retail chains, and developers. I like that 70% of their work is in renovations and conversions, as this means there should be a steady demand for their services no matter the economic cycle. I also like how they currently do not compete for projects as their over 30-year history has earned them a great reputation and strong client relationships, with some 80-90% of their business coming from repeat clients. Their focus on their specific niche has also allowed them to develop differentiated expertise that generates a nice revenue and cash flow. I’d want to review their financials to confirm the consistency of their numbers over time and to see if any of their clients represent an outsized proportion of their revenues or earnings. I’d also be curious as to the qualifications and experience of their staff, what is included in their FF&E and inventory, and the role of the owner. Finally, I’d want to explore what would be involved in competing for additional business in the future.

4/ Laundromat

📍 Location: North Carolina
💰 Asking Price: $2,750,000
💼 EBITDA: $745,000
📊 Revenue: $3,750,000
📅 Established: 1984

💭 My 2 Cents: While there’s nothing sexy about a laundromat, they’ll always be in demand. You usually don’t see a laundromat generating this amount of cash flow, but this company operates five locations, each offering a self-service laundromat, wash-and-fold services, and dry cleaning. I really like this deal as the multiple locations show this business can handle growth while also providing diversification of risk compared to a single location operation. I also like this company’s proven 40-year track record, number of longstanding employees, loyal customer base, eco-friendly practices, and embrace of modern technology, including a mobile app and seamless website. I’d want to dig into the revenue breakdown between their different locations and services, whether any of their locations are underperforming relative to the others, the terms of the lease for each location, how they handle fluctuating energy costs, the nature and condition of the $810K in equipment and inventory, if there are any pending capital expenditures, and, if there are managers in place at each location. With a reasonable multiple for this type of business (not to mention the hard assets included in the sale), this looks like a potential winner.

5/ Manufacturing Business

📍 Location: Nebraska
💰 Asking Price: $2,700,000
💼 EBITDA: $717,829
📊 Revenue: $2,607,424
📅 Established: 1987

💭 My 2 Cents: This business produces high-quality items for regional and national distributors and OEMs, with 75% of their revenue coming from industry-standard products and the other 25% from custom solutions. I like their mix of standard and custom work, 40-year history, long-standing client relationships, and, last but not least, the inclusion of $1.4M of FF&E in the sale. I love it when there is this level of hard assets in a business as they derisk a transaction while existing as a barrier to upstart companies coming in. After checking on the condition and projected lifespan of the machinery, I’d want to understand exactly what this company produces, how much competition they face, and how much pricing power they have when dealing with clients. I’d also need to understand how stable their revenue and cash flow have been over the years, the extent of their current backlog and pipeline, their relationships with suppliers, and how reliant they are on the owner. Finally, I’d want to scope out the current utilization rate of their equipment and staff and what total level of business they could support without additional investment. For someone with a background in manufacturing, this looks like a chance to take over an established operation while building on the projected increased demand for domestically made products.