This Week In SMB PE | November 12th, 2024

A Weekly Recap of SMB Deal + Opportunities

Author

Dennis Unrein
November 12, 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.

SMB PE Expert Podcast: Weekly Expert Interviews (SBA Loan Process)

For those looking for a deep dive in SMB, we are hosting weekly experts in the field.

Podcast available on both YouTube (@SMBPE) and Spotify (SMB PE Expert Interviews) for those interested.

  1. Navigating The SBA Loan Process w/ Matthias Smith of Pioneer Capital Advisory

  • What? Discussion with Pioneer Capital Advisory LLC President & Founder Matthias Smith

  • Who? Pioneer Capital Advisory LLC, a national boutique commercial loan brokerage, specializes in SBA 7(a) financing, guiding business buyers through the entire process, from initial LOI acceptance to final funding

  • Services? Pioneer provides financing solutions from $500,000 to $5 million, specializing in guiding first-time buyers and seasoned owners through smooth, efficient acquisition and expansion funding processes

  • Experience? Matthias Smith has closed and funded 60+ SBA Financed deals since founding Pioneer Capital Advisory LLC in May 2022

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. 45-Year Municipal Site Prep - New York | $14.7M Revenue | $1.0M Cashflow

Deal Summary:

  • $14.7M Revenue

  • $1.0M Cashflow

  • $4.9M Ask Price

  • 0.3x Revenue Multiple

  • 4.8x Cashflow Multiple

What Do They Do?

  1. Site prep for paving and infrastructure in NYC

  2. Work w/ parks, roads and school districts

  3. Customers DOT, Department Parks, Port Authority

Highlights:

  1. Includes $38M in contracts, $62M backlog

  2. Established in 1979, Owner retiring

  3. Includes $4M assets, ABL Loan option

Risks/ Concerns:

  1. Requires Minority, Woman or Veteran designation

  2. Fair value of the equipment

  3. Team of 20 core people + 30-50 union laborers

2. 60+ Year Pool Company - New York | $8.2M Revenue | $1.3M Cashflow

Deal Summary:

  • $8.2M Revenue

  • $1.3M Cashflow

  • $4.8M Ask Price

  • 0.6x Revenue Multiple

  • 3.7x Cashflow Multiple

What does the Company do?

  1. Pool installation, renovation & service

  2. Inground and vinyl pools

  3. Winter closing and summer opening

Highlights:

  1. 60+ years in business, Est. 1960

  2. Long tenured staff, many 10+ years

  3. Yearly maintenance contracts – recurring revenue

Risks/ Concerns:

  1. Unknown liabilities and environmental

  2. Retaining key team members

  3. Revenue mix between projects vs recurring

3. 25-Year Commercial Sign Co. - Virginia | $2.0M Revenue | $339K Cashflow

Deal Summary:

  • $2.0M Revenue

  • $339K Cashflow

  • $625K Ask Price

  • 0.3x Revenue Multiple

  • 1.8x Cashflow Multiple

What does the Company do?

  1. Commercial signage solutions

  2. Monument signage and custom designs

  3. Small team of 5, 3 FTE + 2x Part-Time

Highlights:

  1. Award-winning national recognition

  2. Customers REITs, Retailers, Shopping Centers

  3. 25+ year in operation, Owner retiring

Risks/ Concerns:

  1. Quality control. What is outsourced?

  2. Customer acquisition costs/ pipeline

  3. Owner dependency risk

4. Set of 3x Laundromats - Oregon | $1.1M Revenue | $375K Cashflow

Deal Summary:

  • $1.1M Revenue

  • $375K Cashflow

  • $2.5M Ask Price

  • 2.3x Revenue Multiple

  • 6.7x Cashflow Multiple

What does the Company do?

  1. Set of 3x laundromats

  2. Serves residential and commercial clients

  3. Dedicated commercial space for 10K daily pounds

Highlights:

  1. Dedicated residential and commercial capacity

  2. Diverse customer base including healthcare

  3. Includes $1.6M in equipment

Risks/ Concerns:

  1. Founded in 2019 - why sell now?

  2. Team hiring needs or concerns

  3. Listed at a high multiple

5. 30-Year HVAC Contractor - New York | $1.1M Revenue | $500K Cashflow

Deal Summary:

  • $1.1M Revenue

    - $500K Cashflow

    - $999K Ask Price

    - 0.9x Revenue Multiple

    - 2.0x Cashflow Multiple

What does the Company do?

  1. Founded in 1994, HVAC services

  2. Commercial and residential clients

  3. Includes 875 ft sheet metal workshop

Highlights:

  1. 30+ years in operation, owners retiring

  2. Major client includes West Point USMA

  3. No marketing budget or advertising

Risks/ Concerns:

  1. Customer concentration (West Point)

  2. Team of 3, owner dependency risk

  3. HVAC vs sheet metal revenue mix %

6. Profitable Automotive Repair Shop - Arkansas | $1.1M Revenue | $345K Cashflow

Deal Summary:

  • $1.1M Revenue

  • $345K Cashflow

  • $815K Ask Price

  • 0.7x Revenue Multiple

  • 2.4x Cashflow Multiple

What does the Company do?

  1. Repairs medium-duty + smaller fleet vehicles

  2. General repair, tire changes and maintenance

  3. Most of equipment recently updated

Highlights:

  1. Includes $255K equipment, 2-4 lifts w/ Jacks

  2. Prime location easy customer accessibility

  3. Preferred location for Autozone + Orielys

Risks/ Concerns:

  1. Breakdown of general repair vs. commercial

  2. Actual value of Equipment on site

  3. Team labor shortage + integration issues

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)

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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