Announcing New 1x1 SMB PE M&A Pilot Program | This Week In SMB PE | October 29nd, 2024

A Weekly Recap of SMB Deal + Opportunities

Author

Dennis Unrein
October 29, 2024

Welcome to This Week In SMB PE. Our weekly recap of deals in SMB M&A, Micro Private Equity and Self-Funded Search space.

In this newsletter we highlight interesting opportunities from this past week in SMB M&A, Micro Private Equity, and Search Funds.

We target cash-flowing companies under $10MM in acquisition value.

Announcing: SMB PE - 1×1 Pilot Program - Private Buyside M&A Advisory for SMBs

We have received a fair amount of inbound requests for Buyside Advisory work. To help individuals source deals, conduct diligence, put together financing & deal teams and close.

As a result, we are announcing a New Pilot Program for those looking for Search Services & Buyside M&A Advisory. We are going to limit the pilot program to 5-6 spots for interested parties only. Designed to be a tight group.

So far 2 of the 5 slots are filled, but please let us know if you are interested in joining our first cohort.

While we have a Community on Skool for “how-to” buy a Small business - in the New Private 1×1 Program we are going to work select individuals to source and diligence a small business acquisition in their target mandate. Dedicated Buyside Advisory work for your mandate.

If interested, please apply below:

Contact us for more information. For interested parties, exploratory calls available. Designed for serious Buyers.

Contact Us: Google Registration Forms

If interested in working with SMB PE?

Free Google Forms below. Please introduce yourself:

Prior Posts:

Weekly Deal Reviews SMB PE | Video Reviews

Interested In A Deal? Expanded information included below:

1. 20+ Year Recycled Concrete & Delivery Co. - South Carolina | $2.0M Cashflow

Deal Summary:

  • Revenue N/A

  • $2.0M Cashflow

  • $10.0M Ask Price

  • Revenue Multiple N/A

  • 5.0x Cashflow Multiple

What Do They Do?

  1. Certified & approved recycled materials

  2. Crushed concrete, structural fill and road base

  3. Customers are contractors and companies

Highlights:

  1. Established business, 23 years in operation

  2. Includes 6x 25-ton delivery trucks and $1.4M equipment

  3. Contracts with some largest companies in area

Risks/ Concerns:

  1. Small team of 3 in place, hiring needs?

  2. Potential regulatory changes for carbon tax credits

  3. Inventory of $20M listed, why the buildup?

2. 36-Year Water Treatment Co. - Massachusetts | $3.1M Revenue | $1.1M Cashflow

Deal Summary:

  • $3.1M Revenue

  • $1.1M Cashflow

  • $2.2M Ask Price

  • 0.7x Revenue Multiple

  • 2.0x Cashflow Multiple

What does the Company do?

  1. Established water treatment Co, Est. 1988

  2. Revenue from product installation & recurring service

  3. Taste & odor issues, chlorine, low PH, bacteria & viruses

Highlights:

  1. 36 years in operation, Owner retiring

  2. Distribution rights in Mass. & Rhode Island

  3. Team of 16, including trained installation plumbers

Risks/ Concerns:

  1. Reliance on partnerships with manufacturer

  2. Competition from water treatment products

  3. Installation vs recurring revenue breakdown

3. 65-Year Tow Trucking Co. - Michigan | $5.3M Revenue | $1.3M Cashflow

Deal Summary:

  • $5.3M Revenue

  • $1.3M Cashflow

  • $7.6M Ask Price

  • 1.4x Revenue Multiple

  • 5.7x Cashflow Multiple

What does the Company do?

  1. Towing, roadside assistance and auto repair

  2. 24/7 roadside assistance + services

  3. Personal cars, semi trucks and commercial trucks

Highlights:

  1. Long-standing reputation for excellent

  2. Owner retiring to spend time with family

  3. Team of highly trained technicians, 40 employees

Risks/ Concerns:

  1. Legal & unknown liabilities

  2. Contracts with local municipalities

  3. Fair value of equipment

4. Christmas Light Installation Company - California | $1.2M Revenue | $1.3M Cashflow

Deal Summary:

  • $1.2M Revenue

  • $1.3M Cashflow

  • $950K Ask Price

  • 0.8x Revenue Multiple

  • 0.7x Cashflow Multiple

What does the Company do?

  1. Christmas Light Installation

  2. Commercial (70%) + Residential (30%)

  3. Own and rent Christmas Light inventory

Highlights:

  1. Clientele majority commercial

  2. Min. project values of $5K and $10K

  3. No marketing and no social media

Risks/ Concerns:

  1. Seasonal/ contractor based labor in CA

  2. Why sell for below 1.0x multiple?

  3. Equipment condition (Box Truck + Lights)

5. 46-Year Student Transportation - New York | $7.1M Revenue | $1.5M Cashflow

Deal Summary:

  • $7.1M Revenue

  • $1.5M Cashflow

  • $5.0M Ask Price

  • 0.7x Revenue Multiple

  • 3.3x Cashflow Multiple

What does the Company do?

  1. Transports for pre-school, ages 2-5

  2. Students w/ special needs

  3. Three active contracts w/ NY County

Highlights:

  1. Niche market, limited competition

  2. Operate on 3-year contracts

  3. Established in 1978, Owner retiring

Risks/ Concerns:

  1. All employees are union labor

  2. NWC is $300K - $400K

  3. Owner dependency risk renegotiation

6. Niche NYC Fitness Centers - New York | $3.7M Revenue | $1.0M Cashflow

Deal Summary:

  • $3.7M Revenue

  • $1.0M Cashflow

  • $2.6M Ask Price

  • 0.7x Revenue Multiple

  • 2.6x Cashflow Multiple

What does the Company do?

  1. Boutique wellness centers

  2. Serves affluent NYC clientele

  3. Small footprint, 3x locations

Highlights:

  1. Cashflow of $1M

  2. Premier franchise w/ sticky model

  3. Triple AAA locations

Risks/ Concerns:

  1. High failure rate/ cutthroat competition

  2. Changing consumer preferences

  3. Only established in 2022, why sell now?

SMB PE 101 M&A Resources

Interested in learning more about Business Buying and if it is right for you?

We have received inquiries about resources to find, locate and underwrite potential SMBs potential acquisition targets. Beyond please options to follow along below.

1) Free Weekly Newsletter: 1x Weekly Deal Recap of SMB Deals

  • What Is It? Accelerator/ Incubator for Small Business M&A and Micro Private Equity deals

  • “How-To Buy A Business” Content Including: 

    • Process Timeline: Timeline for M&A deals

    • Models: Valuation and financial model for Pre-LOI analysis

    • Searching: Websites, Brokers, Off-Market Strategies

    • 1×1 Coaching Calls: 15 slots weekly for M&A Advisory Calls

    • Databases ($250 Value): Includes all SMB Databases below (60+ marketplaces, 111 Due Diligence Questions, 1,000+ Business Brokers)

  • Investors + SMB Accelerator (Optional): We have 125+ accredited investors that can invest at their discretion for live deals. We present them with interesting deals and they can choose to participate in deals if they choose to.

The average course is $2,000 in the market, so we priced our monthly community at $99 so that we can have something that is constantly adding over time. The average Search can take 12 - 24+ Months making us competitive with those in market for educational products.

  • SMB Marketplaces Database ($49): List of 60+ marketplaces + brokerages search for SMBs. (Link)

  • Due Diligence Volume I Database ($49): List of 111 questions to consider during due diligence. (Link)

  • Business Brokers Database ($149): List of 1,000+ business brokers to contact to increase deal flow. (Link)

  • How to scale to 90K followers in 90 days on Instagram ($999): Formula for posting social media on Instagram that we used to grow to 90,000 followers over 90 days (Link)

Please reach out with any questions or recommendations for the newsletter. We will do our best to incorporate.

SMB PE Disclaimer

For informational and illustrative purposes only. This communication does not constitute an offer to sell, a solicitation of an offer to buy or a recommendation of any security or any other product or service by SMB PE LLC. Prior to making any further decisions, investors should seek individual advice from their personal financial, tax, legal or other profession advisors to take into account the risks associated with their own specific situation.

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