New Deals: A residential HVAC company, sewage repair company, and 3 other finds

Sign Up | Podcast | Sell Your Business | Work With Me

NEW DEALS

1/ Residential HVAC Company

📍 Location: Florida
💰 Asking Price: $4,000,000
💼 EBITDA: $1,186,000
📊 Revenue: $5,422,951
📅 Established: 2019

💭 My 2 Cents: This company focuses on residential energy efficiency solutions, specializing in HVAC systems, insulation, and water heaters. Their Florida locale is a great place to be in the HVAC business considering the year-round demand, while their specialization in energy efficiency means a steady flow of work above and beyond their standard HVAC services. I like their consistent rate of 5-10 projects per week, average $22.5K sale per customer, and typical $225K of work in progress. I also like how they can leverage government climate-related incentives such as the Inflation Reduction Act, but even if this gets repealed in the next administration, lower energy bills will always be enticing to homeowners. On top of that, I like that their use of subcontractors means they could readily scale to support further growth. I’d want to see the breakdown between new installs and repair/maintenance. I’d also need more detail on who holds the required licensing and whether there is redundancy, what their customer acquisition and lead generation funnel looks like, and how they handle their subcontractor relationships. Ultimately, the asking price is reasonable given how much interest there is from private equity in this space.

2/ Sewage Repair Company

📍 Location: Maine
💰 Asking Price: N/A
💼 EBITDA: $600,000
📊 Revenue: $2,200,000
📅 Established: N/A

💭 My 2 Cents: An essential service with stable and recurring revenue that’s also government-mandated? Sign me up. This long-established business provides septic pumping and repair services, with a strong emphasis on commercial accounts that ensure steady, year-round revenue. Septic systems are critical infrastructure for properties not connected to municipal sewer systems. On top of that, regulatory requirements often mandate septic maintenance, creating a built-in demand for services. I like their loyal client base, 24/7 availability, and recent investment in new equipment, as this should mean a new owner wouldn’t face any pending capital expenditures. However, I’d need to better understand their commercial accounts, including the current number of clients, the standard contract terms and duration, and the percentage of the total revenue these accounts represent. I’d also want to look into any possible client concentration, the qualifications and experience of their staff, the extent of the equipment included in the sale, how much competition they face in their market, and the role of the owner.

3/ Tennis Training e-Commerce Business

📍 Location: New York (Remote)
💰 Asking Price: $2,995,000
💼 EBITDA: $845,445
📊 Revenue: $1,429,096
📅 Established: 2016

💭 My 2 Cents: This is a pretty unique company targeting a dedicated and loyal community. It’s a remotely operated e-Commerce business that specializes in tennis training products for both professional players and enthusiasts. I really like their strong yearly growth, current average order of $163, and super impressive 59% profit margin. Add to this their 1M Instagram followers, email list with over 33,000 subscribers, and over 1,000 five-star reviews online, and you have a business that clearly knows how to market itself. The crazy thing is that they do no paid advertising and do not sell on Amazon, so for a buyer with experience in either, this could be a great brand to take to the next level. I’d need to dig into their business model and operation, starting with who thinks of, designs, and manufactures their products. I’d also need to know if any of their products are patented or proprietary, their manufacturing lead times and cash conversion cycle, what marketing they currently do (because it's clearly working), and what the opportunity is to sell on Amazon. Finally, since they have no employees, I’d need to get a handle on the full scope of what the owner does and what would be involved in replacing them. If everything checks out, this could be a very interesting proposition for someone with a background in both tennis and e-Commerce.

4/ Solar Panel Installation Company

📍 Location: Colorado
💰 Asking Price: $3,999,000
💼 EBITDA: $1,498,153
📊 Revenue: $6,380,513
📅 Established: 2016

💭 My 2 Cents: While there is a lot of demand for solar as energy prices continue to climb, there is also no shortage of competition in this space. This company has carved out a strong position by offering vertically integrated solar panel sales, service, and installation. I like how this vertical integration lets them capture all potential revenue from clients while giving them better control over their pricing and service quality. They have completed over 13,000 installations since their founding in 2016 while building a solid client base and maintaining an A+ BBB rating. I’d want to get a handle on what subsidies or incentive income they’ve received over this period, and if so, how these are expected to change in the next five years with potential regulatory headwinds (though some industry experts say that they don‘t see federal residential incentives going away). In addition, I’d want to understand how they source new clients and what their lead generation funnel looks like, the level of local competition, who holds mandatory licenses in the business, and the roles and responsibilities of their staff. Overall, I think given the asking price on this deal, it’s worth diving in further.

5/ Printing Company

📍 Location: California
💰 Asking Price: $3,500,000
💼 EBITDA: $1,010,656
📊 Revenue: $3,318,528
📅 Established: 2004

💭 My 2 Cents: This highly automated printing company serves a B2B clientele, with over 90% of orders from resellers and brokers. They have a seamless online ordering platform so most jobs are transacted without the need for employees to handle the pre-press process or interact with customers directly. Their automation lets them, with just a small staff of 7, turn an impressive amount of profit with very attractive margins. I like their B2B client base, which tends to be stickier and with a larger average order value, and the very significant amount of specialized equipment included in the sale. They operate a single shift in a facility with space to handle more capacity so there is the potential to scale their production by adding additional shifts and increasing their marketing efforts. I’d first want to check their financials for the past five years to confirm the consistency of their orders and earnings. I’d then need to look into any possible client concentration, what each employee does given their level of automation, how they find and win new clients, who their key competitors are, and if there is anything proprietary about their systems or processes. With the $1M in FF&E included in the asking price, this solid cash producer is available at a very reasonable multiple.