New Deals: A wastewater service provider, 6 Burger King locations, and 3 other finds

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NEW DEALS

1/ Wastewater Service Provider

📍 Location: Montana
💰 Asking Price: $3,800,000
💼 EBITDA: $680,000
📊 Revenue: $1,700,000
📅 Established: 2004

💭 My 2 Cents: This company provides the critical service of installing and maintaining wastewater treatment and septic systems for both residential and commercial clients. I love the strong industry tailwinds here—there’s a rising need for wastewater treatment due to increasing environmental regulations, population growth, and urbanization. I like their solid reputation in a niche market, strong recurring revenue from their maintenance service agreements, and lean operation with a remote owner (!) and office manager overseeing their field workers. Their fleet of special vehicles and related equipment both provides a nice moat against potential competitors and positions them for further growth, especially in septic tank pumping. I’d need to better understand the revenue breakdown between the different facets of their business, the standard terms of their service agreements, if they have any licensing or certification requirements, how they win new clients, and who their local competitors are. I’d also need more detail on the value and condition of their fleet, equipment, and inventory. While this is not exactly a glamorous industry, this deal looks like an excellent opportunity to acquire a proven boring business.

2/ Six Burger King Locations

📍 Location: Delaware
💰 Asking Price: $7,500,000
💼 EBITDA: $1,995,989
📊 Revenue: $10,228,478
📅 Established: N/A

💭 My 2 Cents: This package of six Burger King franchise locations in Delaware has a number of things going for it. I like the great brand identity, the cost savings and synergies you get in managing a multi-unit operation, and the very solid cash flow and margins. I also like that, as a franchisee, you have access to what should be very valuable training and support. However, franchise deals like this call for a lot of diligence. I’d need to get a detailed handle on the support provided, the fees and revenue splits involved, any restrictions or limitations on their operations and territory, and any provisions on the sale of an existing location or acquisition of a new location. I’d also need to dig into the revenue breakdown across the six locations and if any are lagging behind the others. Finally, I’d want to check on the staffing and equipment at each location and the day-to-day role of the owner. If everything checks out, fast food franchise portfolios like this can be extremely stable cash-flowing machines.

3/ Roofing Contractor with Solar Certification

📍 Location: Los Angeles, California
💰 Asking Price: $1,695,000
💼 EBITDA: $602,000
📊 Revenue: $2,517,840
📅 Established: 2003

💭 My 2 Cents: This well-established contractor offers a full suite of roofing services for both residential and commercial customers. I like that they are certified by major solar companies to provide support for installing solar panels, meaning they are nicely positioned to continue to take advantage of the expanding Los Angeles renewable energy market. It’s also nice that they hold a D.I.R. certification, which prequalifies them to bid and work on public projects. I’d want to look into the revenue split between residential and commercial projects, the extent of their current workload and backlog, how they source new work, whether they receive referrals from the solar companies, and the degree of competition in their market. I’d also need to ask about the value and condition of any equipment and inventory included in the sale, if their certifications will transfer with the sale, and what will be involved in replacing the owner. Ultimately, their long history, solid margins, and reasonable asking price makes this a pretty appealing deal.

4/ Water Restoration Company

📍 Location: Orange County, Florida
💰 Asking Price: $1,700,000
💼 EBITDA: $570,000
📊 Revenue: $1,600,000
📅 Established: 2015

💭 My 2 Cents: I really like disaster remediation companies, especially those located in Florida, which is the perfect place for a business that focuses primarily on water damage-related remediation. I like the preferred vendor status they hold with multiple insurance companies, their solid margins driven partly by their lean operation and use of subcontractors, and their strong growth potential. Things are going so well that they are turning away work, so there’s a lot of room for a new owner to expand into other service areas related to their remediation work, like renovation and remodeling. I’d want to check on the stability of their revenues and what seasonality looks like, how much work comes from insurance companies versus referrals, and how much competition they face. I’d also need to find out if there are any required licenses or certifications and if these would transfer post-transition, the breakdown of responsibilities between the owner and the full-time employees, how they handle their subcontractor relationships, and what equipment is included in the sale.

5/ Commercial Glass and Glazing Company

📍 Location: N/A
💰 Asking Price: $4,970,000
💼 EBITDA: $1,400,000
📊 Revenue: $8,000,000
📅 Established: 2000

💭 My 2 Cents: This construction company specializes in commercial glass and glazing projects for educational, healthcare, and government facilities. I like their focus on sustainable building practices and energy-efficient solutions, adroitly positioning them for future growth in an ever more eco-conscious world. This focus also tells me that their management team is forward-thinking and actively looking for ways to differentiate themselves from competitors. I’d want to dive into their financials for the past five years to confirm the stability of their revenues, the amount of work now in progress or on backlog, if there is any risk of client concentration, how they bring in new work, and who their key competitors are. I’d also need to get a feel for the qualifications and experience of their staff, the nature and condition of the almost $300K in FF&E and inventory included in the sale, and if there are any licensing or certification requirements. If that all checks out, then from a financial point of view, this deal almost sells itself, as there will be $240K in net working capital available post-sale, the transaction is SBA pre-approved, and the seller is offering a note of up to $700K.