New Deals: A veterinary practice, auto repair shop, and 3 other finds

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NEW DEALS

1/ Veterinary Practice

📍 Location: Suffolk County, New York
💰 Asking Price: $1,450,000
💼 EBITDA: $350,000
📊 Revenue: $1,837,339
📅 Established: 2000

💭 My 2 Cents: If you’ve been following me for a while, you know how highly I think of businesses in the pet-care industry, as people are willing to spend whatever it takes to take care of their fur babies. This local veterinary practice has been around for decades and should have both a very solid reputation and an established loyal clientele. I like that they are located in an affluent community that can easily afford top-notch care, have a well-equipped stand alone facility, and that the current owner is retiring but open to helping for an extended period to make sure the transition goes smoothly. Also, it’s nice that while this is currently a solo doctor practice, things are set up to where a new owner could quickly increase earnings by expanding to a two doctor practice. Relatedly, I’d need to know the qualifications and experience of the employees staying with the business and what is involved in hiring veterinarians. I’d also want to understand how much of their business is scheduled versus walk-in care, how they gain new clients, what the local competition is like, the lease or possible sale terms for their facility, and what equipment comes with the sale. Ultimately, there’s a reason private equity and venture capital have been all over this space for years, so this deal could provide a great entry into a consistently profitable industry.

2/ Auto Repair Shop

📍 Location: Houston, Texas
💰 Asking Price: $1,625,000
💼 EBITDA: $530,952
📊 Revenue: $1,717,372
📅 Established: 1995

💭 My 2 Cents: This auto repair shop, which handles both foreign and domestic vehicles, provides an essential service that will always be in demand (as any car owner knows). I like that they have a proven track record of over 30 years in business, are located in a highly trafficked area, and bring in strong margins. Importantly, they are in an industry where there is no lack of competition, so they have looked to build a reputation for competitive pricing, quality work, and honest customer service. They also have a large, well-equipped facility that the owner would prefer to lease but is also open to selling as part of the transaction. While their numbers look good, I would want to check how consistent their financial performance has been over the past five years, what their customer reviews and online ratings look like, the extent of the competition in their local market, and how they seek and acquire new customers. I’d also need to look into the nature and terms of the contracts with their technicians, if staffing is ever a problem, and the condition and usefulness of the FF&E included in the sale. I’d finally want to know the current utilization of the shop and staff, if there is room to grow in the current facility, and what opportunities there are to expand the business. 

3/ Military Contractor in Software, Communications & Cybersecurity

📍 Location: California
💰 Asking Price: $2,650,000
💼 EBITDA: $1,262,223
📊 Revenue: $4,879,289
📅 Established: 1997

💭 My 2 Cents: This military contractor specializes in software, communications and cybersecurity, with their primary business focus on providing systems analysis and hardware/software design for DoD to include, more recently, engineering highly complex security devices for Navy unmanned platforms, making it an intriguing opportunity for someone who is technically inclined. Given their long history and unique capabilities, this business is consistently the prime contractor with many of their clients. I love the recurring contracts involved, especially because they are with the government. These can be very hard to win and generally last a long time once a supplier is approved and selected. The company's established relationships with DoD and intelligence agencies provide a valuable competitive edge, as seen by their consistent revenue and significant cash flow. They are also well-positioned for growth, with the capability to expand both their product offerings and client base, and because of the technicality involved in their work and the security clearances required, any competition must climb great barriers to entry. I would need to dig into their current contracts, to include their standard terms and length, who their counterparties are, and what is involved in their renewal. I’d also want to get a handle on how their contracts are won, if there is a bidding process, how revenue is spread across their different services, if there are any client concentration issues, and what possible competition they face. Finally, I’d need to know how the licenses transition post-sale and what would be involved in maintaining them. In addition to this business occupying a distinct profitable niche, the owner is offering seller financing and is open to staying on after closing to assist with the transition and contract renewals.

4/ Electrical Contractor

📍 Location: Oregon
💰 Asking Price: $2,200,000
💼 EBITDA: $829,000
📊 Revenue: $2,947,000
📅 Established: 1979

💭 My 2 Cents: With its consistent demand and steady revenues, electrical contracting is your classic boring business. This electrical contractor offers new construction, remodeling, and 24-hour emergency services for residential, commercial, and industrial clients. I like their multiple revenue streams and solid cash flow, the $400K of FF&E and inventory included in the sale, and that the owner, while retiring, is ready to provide training and transition support to the buyer. This industry is competitive, requiring businesses to maintain high standards and excellent customer support, so it’s also positive that this business has focused on high-quality services and a wide range of offerings to set themselves apart. Given their different services and client bases, I’d want to know the breakdown in revenues and earnings for each of these, how consistent their results have been over the past three years, how they acquire new clients, how emergency services customers find them, and who their main competition is. I’d also be curious as to the roles and qualifications of their staff, the specific nature and condition of the FF&E, and the details and lease terms of their current facility.

5/ Landscaping Business

📍 Location: N/A
💰 Asking Price: $9,900,000
💼 EBITDA: $2,399,999
📊 Revenue: $7,940,000
📅 Established: 1991

💭 My 2 Cents: This company is much more than your normal landscaping business, as they offer a broad suite of services from design, installation, and maintenance to construction enhancement and remodeling projects. I love their scale, impressive cash flows, strong margins, fleet of over 40 vehicles, strong management team with different roles and expertise, and the between 40 and 70 employees depending on the season. One of the real appeals of this size is that you are buying a well-oiled machine that can take on a range of projects without the risk of depending on any single employee or client. I also like that their diverse services keep them busy year-round and that their 33 years in business have granted them a stellar reputation and loyal client base. I’d want to understand how well they’ve done over the past three years, the split in revenues between their different services, the extent of their recurring revenue, who their main clients are, if there are any client concentration issues, and how they acquire new business. I’d also want to scope out the details on the FF&E and inventory included in the sale, if the business has an online presence, and what opportunities exist for strengthening their marketing and sales and expanding their geographic reach.