New Deals: A plumbing company, commercial aggregate hauling company, and 3 other finds

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NEW DEALS

1/ Plumbing Company

📍 Location: Solon, Ohio
💰 Asking Price: $2,100,000
💼 EBITDA: $456,305
📊 Revenue: $5,221,000
📅 Established: 2006

💭 My 2 Cents: This high-end plumbing company offers a comprehensive range of services to both residential and commercial clients. I like how they have a 25 member staff that includes certified technicians, come with a fleet of fully owned service vehicles, and have developed a reputation for reliability and high quality work (essential in the plumbing business to keeping clients). I also like they have been consistently profitable for years, have a strong online presence, and utilize a mix of traditional and digital marketing strategies, something you don’t often see with plumbers. This can provide you a nice head start as a new owner as compared to needing to build up an online strategy and presence from scratch. I’d want to get a better understanding of their financials for the past three years, the revenue breakdown across their different services, the level of recurring revenue, who their main customers are, if there are any client concentration issues from their commercial clients, and the degree of competition they face. I’d also want to understand their current online efforts, the type and condition of the equipment included in the sale, and the level of growth they could support with their current staff and capabilities.

2/ Commercial Aggregate Hauling Company

📍 Location: Florida
💰 Asking Price: $14,000,000
💼 EBITDA: $4,180,608
📊 Revenue: $31,358,992
📅 Established: 2013

💭 My 2 Cents: What they do may not be very sexy, but this hauling company turns a very tidy profit transporting materials for commercial clients from major developers to airports and hospitals. I really like the trajectory this business is on, as they had a record 2023 and continue to perform at a high level while becoming one of the top-rated dump trucking companies in the country. I’d want to look into their financials for the past five years to see if their business is subject to much fluctuation, what their standard contracts are like, their levels of repeat business and recurring revenue, who their main clients are, how they win new business, and who their key competitors are. While they’re already an impressive size, I’d also want to check on the current utilization rate of their staff and equipment and how much they could grow without additional investment.  Depending on the type of clients and materials they are hauling, there might be special certifications or licenses you would need to make sure are in place post-transition, but these could also help provide a serious barrier to entry. Ultimately, this is a great boring business that also includes $2M of FF&E (would need to check condition) and 10% seller financing at attractive terms.

3/ Asphalt Paving and Grading Services

📍 Location: Maricopa County, Arizona
💰 Asking Price: $4,400,000
💼 EBITDA: $1,700,000
📊 Revenue: $8,600,000
📅 Established: N/A

💭 My 2 Cents: I like construction adjacent businesses that provide services with continuous demand even if there is a slowdown in new construction (in this case, roads and other paved surfaces require periodic maintenance and resurfacing). This particular company provides asphalt paving and grading services for contractors, commercial properties, and private residences. I like their experienced team, proprietary bid tools that let them win new business, and impressive cash flow. I also see how a new owner, using their established customer base as a platform to build on, could offer a number of additional services that would capture more revenue from already engaged clients. For example, there’s no reason why the business couldn’t stop outsourcing striping and miling services and just offer it themselves instead. I’d need to get more details on how they acquire new clients and their proprietary bidding process, if there are any licensing or certification requirements, and whether the FF&E includes any specialized equipment needed to operate the business. I’d also want to understand their cash conversion cycle and when payment is received relative to when a job is completed, if there is a current backlog of contracted work, how involved the owner is day to day, and who would hold the key customer relationships post-transition.

4/ Roofing Company

📍 Location: Michigan
💰 Asking Price: $2,299,000
💼 EBITDA: $640,334
📊 Revenue: $1,899,130
📅 Established: 2012

💭 My 2 Cents: Roofing is a great industry to be in, with consistent demand and steady cash flow, but it’s full of competition and it can be a challenge to differentiate. This roofing contractor does so by specializing in building exteriors, with a particular focus on metal roofing for both commercial and residential clients. I really like that they have established themselves as experts in a fast-growing niche, but I’d need to get a handle on how their revenues are split between their different services and types of clients, their average project scope and value, how they gain new clients, if there is much repeat business, the extent of their current work backlog, and if there is much seasonality to their operation given their Michigan location. I’d also want to dig into the qualifications and experience of their staff, any licensing requirements, and the prospects for growth in their market. If that all checks out, then this business has strong margins, is being offered for a reasonable multiple, and comes with over $400K of FF&E included in the sale.

5/ Niche Online Automotive Dealer

📍 Location: Long Island, New York
💰 Asking Price: $2,200,000
💼 EBITDA: $864,000
📊 Revenue: $2,900,000
📅 Established: 1985

💭 My 2 Cents: This automotive dealership specializes in internet-based vehicle sales. As high prices and supply chain issues have greatly impacted the new car industry, the demand for used and reconditioned cars has been extremely strong, spurring this company’s growth. I really like how they are positioned in a niche segment of the auto industry, providing used vehicles for the transportation of senior citizens, handicapped individuals, and others needing assistance. I also like their high margins, average gross profit per sale of $12,000 or more, small team, strong online presence (90% of their sales come from websites and social media leads), and SBA pre-qualification (which is a great sign in an industry that can sometimes be less than forthright in their accounting). But, what I like the most is how big the potential market is. Given that 90% of their leads come from the internet and that only 25% of their sales are completed in person, there is a lot of room for growth without needing to rely on an expanded physical presence or a larger team. While everything looks promising, I’d need to see their financials for the past five years to check how much they are affected by different market conditions and get a fuller sense of their business model. I also want to know how they source new inventory, who their main buyers are, how much working capital they need to operate the business, their marketing and sales plan, what customers are saying about them online, and licensing requirements.