New Deals: A school bus company, garbage route, and 3 other finds

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NEW DEALS

1/ School Bus Company

📍 Location: Massachusetts
💰 Asking Price: $2,600,000
💼 EBITDA: $635,706
📊 Revenue: $2,710,000
📅 Established: 70 years ago

💭 My 2 Cents: This school bus company, in business for an amazing 70 years, has an impressive fleet of 33 full-size school buses, three mini buses, and two mini vans, all equipped with GPS devices and on board camera systems. School bus services are great because they are routinely contracted by school districts long-term, providing a predictable revenue stream. I also really like their in-house repair center, as this reduces maintenance and repair costs, improves repair times, and enables preventative maintenance, which can help extend the fleet's life and prevent breakdowns and emergencies. I would need to better understand how many school districts they work with (to guard against client concentration), the terms of their standard contract, the age and condition of their fleet, if they have any staffing issues (especially with drivers), and if there is any history of accidents or safety incidents that might impact their gaining new clients. If everything checks out, this looks like a straightforward steady cash cow.

2/ Garbage Route

📍 Location: Pennsylvania
💰 Asking Price: $1,100,000
💼 EBITDA: $400,000
📊 Revenue: $850,000
📅 Established: N/A

💭 My 2 Cents: The waste services industry provides an essential service (duh) that is only growing in importance given the growth in both residential and commercial development. This particular company operates a garbage route that brings in an incredible SDE margin of almost 50%, telling me that they’ve done a great job optimizing their operation. I like that their business model is built around recurring revenue and that they are located in a pretty rural part of Pennsylvania, as this means they are likely to face less competition. I’d need to know their client retention rate, what their contracts look like, what regulations they have to deal with, and the nature and condition of what is included in the $75K in FF&E. They’re available at a reasonable asking price, and for a motivated new owner there might be an opportunity to offer specialized services like recycling programs, yard waste removal, or bulk item pickups.

3/ Two Lash Studio Locations

📍 Location: Texas
💰 Asking Price: $1,400,000
💼 EBITDA: $392,284
📊 Revenue: $1,879,222
📅 Established: N/A

💭 My 2 Cents: These two lash studios are part of a fast-growing industry that is projected to increase at a 6.95% CAGR through 2028, reaching annual revenues of over $2B. This growth is not really surprising, as if you’ve ever had lash extensions done, you know how nothing (not mascara, not false lashes) compares to getting this done professionally - not to mention how game-changing this can be for your appearance. At the same time, these fake lashes fall out, so you must get them done every 2-4 weeks (insane, I know). I like how this business takes advantage of this by focusing on a recurring revenue model, with over 80% of its revenue coming from memberships. I also like how both studios are in high-traffic areas and that, together, they bring in strong net margins of over 20%. Since location is key, I’d want to get a full handle on the lease terms for the two studios. I’d also want to check out the churn rate on their memberships (this will speak to the quality of their services), the level of competition in their local markets, what training they offer to lash technicians, and what their staff turnover looks like (as customers can follow a favored technician to a new locale).

4/ Packaging Company

📍 Location: New York
💰 Asking Price: $5,200,000
💼 EBITDA: $1,200,000
📊 Revenue: $11,000,000
📅 Established: 1986

💭 My 2 Cents: I like how this deal is for a portfolio of three complementary businesses that together offer manufacturing, distribution, and direct-to-business sales, providing a one-stop shop for all packaging needs. This vertical integration, with control over the entire supply chain from manufacturing to distribution, can lead to more efficient operations, reduced lead times, and better quality control. While client concentration can be an issue in the packaging industry, in this case no client represents over 10% of revenue. I also like how one of the companies specializes in custom die-cut corrugated and foam packaging, with 95% of their work being custom orders, as this type of bespoke service can demand higher prices and profit margins. I’d need to look into the client retention rate for each of their businesses, how they compare with their competitors in each of these segments, who their main clients are and how they bring in new work, what their relationships with their suppliers are like, and what management systems they have across the three businesses. If you decide you can grow this business, there is a lot of PE interest in this space, so you could potentially exit at a much higher multiple.

5/ Fire Protection Business

📍 Location: California
💰 Asking Price: $1,100,000
💼 EBITDA: $346,473
📊 Revenue: $731,065
📅 Established: 1992

💭 My 2 Cents: One great thing about the fire protection industry is that it provides a service that is legally mandated and, thus, always in demand. This company focuses on B2B clients in the commercial and industrial sectors, specializing in fire extinguisher inspections, kitchen fire suppression system installations, and fire sprinkler system installation and repair. Key positives are their 32-year track record, hard-to-beat near 50% SDE margins, and that installation clients can be upsold on ongoing inspections and maintenance, creating robust client lifetime value. I’d want to look into the revenue split between their different services, their repeat client and recurring revenue rates, any possible client concentration, the qualifications and experience of the staff, and the day-to-day role of the owner. Since this is a fragmented market with many smaller players, I see a clear possibility to consolidate this company into an existing business or to use it as the base for further growth through acquisition.