New Deals: A land surveying business, managed IT service provider, and 3 other finds

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NEW DEALS

1/ Land Surveying Business

📍 Location: California
💰 Asking Price: $5,250,000
💼 EBITDA: $1,308,287
📊 Revenue: $4,418,459
📅 Established: 1997

💭 My 2 Cents: Land surveys are essential for real estate transactions, construction, zoning compliance, and infrastructure projects, ensuring consistent and reliable demand. In operation for 28 years, this company has completed over 17,000 projects across 25 states, developing a stellar reputation for competitive pricing and quality work. Other real positives are their experienced team which includes three licensed land surveyors, a solid client base, and minimal risk of collection issues as most of their jobs are paid through escrow. I’d want to know what % of revenue are from recurring contracts or repeat clients, the revenue breakdown between their residential, commercial, and government projects, if there are any client concentration concerns, what their current backlog and pipeline look like, how they source new business, and the condition of the FF&E included in the sale. I’d also want to look into how scalable the business is with their current workforce and what opportunities might exist for adding services such as GIS mapping and drone surveying. Ultimately, this is a strong cash producer that, given their demonstrated geographical reach, should also offer serious growth potential.

2/ Managed IT Service Provider

📍 Location: Florida
💰 Asking Price: $2,450,000
💼 EBITDA: $522,917
📊 Revenue: $1,922,228
📅 Established: 2001

💭 My 2 Cents: This managed IT service provider specializes in cybersecurity, cloud hosting and storage, network infrastructure, and helpdesk support. I really like their 80+ active clients (with an average monthly contract of $2K), very high levels of recurring revenue, and standout 20%+ margins. While they have a great current track record, their focus on cybersecurity in particular has also positioned them really well for continued growth in a world with increasing IT security concerns and increasing compliance requirements. Plus, switching IT providers can be complex and risky, leading to strong customer stickiness and long-term relationships. I’d want to better understand the relative earnings for each of their different services, client churn, what industries their clients represent, how they differentiate themselves from competitors, how they stay current with the latest technologies, if they hold any certifications needed to operate in the cybersecurity space and, if so, how these would transfer post-sale. In addition to emphasizing cybersecurity, I’d also be curious as to the possibility of expanding their services to AWS and Azure. They are SBA-prequalified and, for a buyer looking for continuity, the seller is willing to stay on in an advisory role to ensure a seamless transition.

3/ Towing Company

📍 Location: California
💰 Asking Price: $4,990,000
💼 EBITDA: $1,000,000
📊 Revenue: $3,700,000
📅 Established: 2004

💭 My 2 Cents: While towing is known as a great boring business, what can really make a difference is when you have several set contracts that bring in a steady revenue flow. This very successful company fits the bill as, in addition to standard 24/7 towing services, they have long-standing lucrative relationships with both commercial and law enforcement clients. What also immediately caught my eye is the $4.5M of FF&E, including a fleet of 15 trucks, included in the sale, with these tangible assets alone almost covering the full purchase price. However, I’d want to dig in on the condition of the trucks and other equipment, including their age and projected useful life and any pending capital expenditures. I’d then want to get a handle on the standard terms of their towing contracts, how they bring in clients outside their contracted agreements, their annual fleet maintenance and repair costs, the possible impact of increases in fuel prices on their margins, and the qualifications and experience of their staff. Given the inclusion of the FF&E in the sale price, this nicely profitable business is offered at a very reasonable multiple, while their two facilities, owned by the seller, can be either leased or purchased separately.

4/ Hospitality Design and Procurement Business

📍 Location: California
💰 Asking Price: $3,000,000
💼 EBITDA: $995,655
📊 Revenue: $5,560,053
📅 Established: 1975

💭 My 2 Cents: In business for an impressive 50 years, this company provides interior design, food facility design, branding, and front-of-house procurement for a prestigious client base that includes top-tier hotels and restaurants. I like how their long-standing lead position in their market often gives them an advantage over competitors, as they are afforded a “last look” privilege on many high-value projects. They also benefit from predictable revenue cycles given the hospitality industry’s standard refresh (5-6 years) and remodel (10-12 years) schedules. I’d want to find out what percentage of their revenue comes from repeat versus new clients, if there is any risk of client concentration, who their main competitors are, how dependent they are on specific suppliers, and the roles and responsibilities of their staff. While a key consideration would be keeping key client relationships post-sale, this could readily be addressed as the seller is open to staying on as an employee.

5/ Environmental Services Business

📍 Location: California
💰 Asking Price: $2,900,000
💼 EBITDA: $852,934
📊 Revenue: $1,827,122
📅 Established: 1981

💭 My 2 Cents: Our increasing environmental awareness means there’s a growing market for environmental services businesses (a good thing!). This company focuses on air pollution control and related air filtration services, including baghouse conversion and filter maintenance and repair, for such diverse industries as power, battery, concrete, and metal manufacturing. I like their expertise in their specialized niche, experienced leadership team, and flexible staffing model, as their extensive use of subcontractors both lets them achieve very impressive margins and gives them the ability to scale up quickly when demand requires. I’d need more detail on their ongoing contracts and level of recurring revenue, how they win new business, how much competition they face, if there are any pending regulatory changes that could impact their business model or profitability, what is involved in obtaining the required contractor license, and the proposed transition plan.