New Deals: Landscaping business, full service digital marketing firm, and 3 other finds

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NEW DEALS

1/ Landscaping Business

📍 Location: Orlando, Florida
💰 Asking Price: $3,750,000
💼 EBITDA: $1,100,000
📊 Revenue: $4,100,000
📅 Established: 1987

💭 My 2 Cents: Landscaping is one of my favorite boring businesses because of its steady demand, recurring revenue, and ease of finding workers, and this landscaper also has going for it an impressive 35 years in business, 44 employees, and a Florida location where there is year-round demand. While I don’t think it’s an issue here given their size, I’d want to know how involved the current owner is in day-to-day operations, as you want to make sure you’re buying a standalone business and not just someone’s job. Tied to this, I’d want to understand what the key staff does and who will be staying with the business post-acquisition. I’d also want to check on possible customer concentration as well as on the breakdown between commercial and residential work, if they are at all dependent on new construction, and if they have any recurring service contracts in place. I’d finally want to look into the value, condition, and possible need for repair or replacement of any equipment transferring with the sale. With the owner looking to retire, this looks like an opportunity to acquire a proven, successful, boring business.

2/ Full Service Digital Marketing Firm

📍 Location: Remote
💰 Asking Price: $12,000,000
💼 EBITDA: $2,402,676
📊 Revenue: $13,140,182
📅 Established: 2010

💭 My 2 Cents: This full-service digital marketing agency is really impressive in a number of ways, as they have 46% net margins (implying that there is tremendous value you can capture as you scale) and have 40+ employees. I especially like that this agency operates on a monthly retainer model, so they have contracted recurring revenue with clients who are with them longer term. With marketing agencies though, it all comes down to client retention. In my experience, agencies operating in more niche industries tend to be stickier (that’s why I’d avoid agencies focused on DTC/SaaS), and those focused less on performance marketing also tend to see clients stick around for longer. I’d also want to look into their standard retainer agreement, average customer acquisition cost, and whether they have any customer concentration risk. Otherwise, businesses this big usually have well-established internal processes and managers, so this deal offers both an established turnkey operation and the potential for highly profitable growth.

3/ Commercial HVAC Company

📍 Location: Orange County, California
💰 Asking Price: $1,750,000
💼 EBITDA: $439,030
📊 Revenue: $1,730,092
📅 Established: 1985

💭 My 2 Cents: This HVAC business focuses on the refrigeration needs of national chain restaurants while also providing HVAC services for commercial properties, property management companies, and strip malls. I really like their commercial focus and the stickiness of their business relationships, as they have an average customer tenure of 15-20 years and many of their customers have been with them for over 30 years. This has translated into long-term service and maintenance contracts in place that leads to tons of recurring revenue. I also like that the business comes with a signed backlog of over $500,000 of work in HVAC replacements and preventative maintenance. However, I’d want to get a fuller picture of how much revenue is secured by recurring contracts, what these contracts look like, how much revenue is from repeat business, how they acquire new customers, the breakdown in work between new projects and maintenance and service agreements, and how often new customers convert to longer-term contracts. I’d also want to confirm that key employees, especially technicians, will be staying on as well as check if any vehicles or equipment come with the sale. With the owner willing to stay on to train for a year or to work as a salesperson/estimator to make sure the transition is successful, this is a great potential entry point into the HVAC space for someone who doesn’t have prior experience.

4/ Auto Transportation Company

📍 Location: Duval County, Florida
💰 Asking Price: $4,500,000
💼 EBITDA: $988,055
📊 Revenue: $5,566,981
📅 Established: 1997

💭 My 2 Cents: This company transports automobiles in Florida. I like their longevity (25+ years in business), experienced staff (many of whom have been with them 15+ years), and solid revenue numbers. But what really stands out about this deal is that the asking price includes $2.4M of FF&E. This means you would be acquiring assets that could aid in getting financing as well as provide downside protection if things go south as their sale would cover over half the purchase price. I similarly like that real estate is also available for sale in this transaction, as adding it into a purchase can extend the term of a loan, making interest and principal payments easier to meet. Given both the importance of their vehicles to their operations as well as their value as assets, I’d need to verify the condition, age, quality, and worth of the trucks and equipment included in the sale. I’d also want to understand the utilization and capacity constraints of the current fleet, the maximum amount of revenue you could generate without having to buy more trucks, and whether they also use outside trucks and contractors when needed. Car sales go up and down, with shifting demand for the transportation of new models, so I’d want to check how stable their cash flow is and what it has looked like through different business cycles. Finally, I’d want to look into how their pricing and service compare to their competition and how they go about gaining new customers. Assuming it all checks out, this is a great tried and true business.

5/ Commercial And Residential Plumbing Business

📍 Location: Suffolk County, New York
💰 Asking Price: $10,000,000
💼 EBITDA: $2,000,000
📊 Revenue: $12,000,000
📅 Established: 2007

💭 My 2 Cents: Plumbing ranks as one of my top boring businesses, as there will always be a need for it both in new construction and maintenance and repair. I like the scale of this company, with 40+ employees and over $2M in cash flow, and that they service both commercial (40%) and residential (60%) clients. However, I’m curious what the split is between new projects and maintenance, if they have any recurring contracts, and what marketing they currently run. The company comes with 30 trucks, so I’d need to know their value and condition and if there are any pending repair or replacement costs. Given this company’s scale, there are likely levels of management already in place who know how the business operates and can help post-acquisition. Still, I’d want to know what would be involved in replacing the current owner and who holds the required licenses. Relatedly, the seller owns the business’s real estate, so I’d need to check if the property is included in the asking price.