This Week In SMB PE | October 15th, 2024

A Weekly Recap of SMB Deal + Opportunities

Author

Dennis Unrein
October 15, 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.

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Prior Posts:

Weekly Deal Reviews SMB PE | Video Reviews

Interested In A Deal? Expanded information included below:

1. 20+ Year Cashflowing Car Wash - New Jersey | $850K Revenue | $260K Cashflow

Deal Summary:

  • $850K Revenue

  • $260K Cashflow

  • $899K Ask Price

  • 3.5x Cashflow Multiple

What Do They Do?

  1. Carwash and detail shop

  2. Operates with 50 ft tunnel

  3. Team of 6 employees

Highlights:

  1. 24+ years in operation, North NJ

  2. Offering ~33% Seller Financing, 5 Years 7%

  3. 19 years remaining on lease

Risks/ Concerns:

  1. Seller in corporate, when did they buy?

  2. Why are they a "Motivated Seller"?

  3. Condition of car wash site + capex needs

2. 15+ Year Dog Boarding & Daycare - Georgia | $620K Revenue | $303K Cashflow

Deal Summary:

  • $620K Revenue

  • $303K Cashflow

  • $2.6M Ask Price

  • 8.8x Cashflow Multiple

  • 1.7x Cashflow Multiple (Ex-Real Estate)

What does the Company do?

  1. Full service dog boarding & daycare

  2. Daycare, boarding, grooming, training

  3. Dedicated training area to train + teach

Highlights:

  1. Established, 19 years in operation

  2. Large client base (700-1500+)

  3. Sale price $2.6M includes $2.1M in RE

Risks/ Concerns:

  1. Operational costs & potential liabilities

  2. Maintenance of facility standards

  3. Competition from other pet services

3. 35+ Year Awning & Shade Solutions - Arizona | $1.6M Revenue | $320K Cashflow

Deal Summary:

  • $1.6M Revenue

  • $320K Cashflow

  • $825K Ask Price

  • 2.6x Cashflow Multiple

What does the Company do?

  1. Established shade solutions company

  2. Awnings, carports, patio covers & shades

  3. Team of 8 employees

Highlights:

  1. Established brand 35+ year legacy

  2. Located in year round sunny Arizona

  3. Owner is retiring

Risks/ Concerns:

  1. Project-based revenue model

  2. Revenue growth last 5 years

  3. Team retention post-close

4. 12 Year Bike + Segway Rental Tours - Florida | $1.1M Revenue | $330K Cashflow

Deal Summary:

  • $1.1M Revenue

  • $330K Cashflow

  • $1.3M Ask Price

  • 3.9x Cashflow Multiple

What does the Company do?

  1. Duel location packaged sale

  2. Segway and bike tours + Rentals

  3. Tandem + electric bikes, beach cruisers, roller blades

Highlights:

  1. Located in high traffic Miami Beach location

  2. Includes significant Assets $525K

  3. Former "Travelers' Choice" award by TripAdvisor

Risks/ Concerns:

  1. Competition from nearby rental companies

  2. Seasonal fluctuations in summer months

  3. Customer acquisition strategy + CAC

5. 38 Year Commercial Grading & Paving - California | $9.0M Revenue | $1.0M Cashflow

Deal Summary:

  • $9.0M Revenue

  • $1.0M Cashflow

  • $4.0M Ask Price

  • 4.0x Cashflow Multiple

What does the Company do?

  1. Commercial grading, earthwork and paving

  2. Conducts repairs and maintenance

  3. Commercial and public entities

Highlights:

  1. Established, 38+ years in operation

  2. 45+ active customers, 60 - 80% recurring annually

  3. Includes $1.5M - $2.5M of equipment

Risks/ Concerns:

  1. Regulatory & licensing requirements

  2. Post-deal integration, 30 skilled employees

  3. Any required capex spending

6. 20+ Year Painting Service Company - New Jersey | $789K Revenue | $459K Cashflow

Deal Summary:

  • $789K Revenue

  • $458K Cashflow

  • $1.2M Ask Price

  • 2.6x Cashflow Multiple

What does the Company do?

  1. Commercial painting services

  2. Family-owned since 2000

  3. Reputation for quality + reliability

Highlights:

  1. Over 20+ years in business, Owner retiring

  2. Loyal, established customer base

  3. Small team of 5 in place

Risks/ Concerns:

  1. Competition in market from larger players

  2. Owner dependency risk

  3. Retention of labor post-close

7. 70-Year Plumbing + HVAC Co. - Pennsylvania | $1.0M Revenue | $1.0M Cashflow

Deal Summary:

  • $1.0M Revenue

  • $1.0M Cashflow

  • $1.0M Ask Price

  • 1.0x Cashflow Multiple

What does the Company do?

  1. Established business, founded in 1954

  2. HVAC, plumbing, heating and water treatment

  3. Team of 3x Trucks and 5 Employees

Highlights:

  1. Long-term customer relationships

  2. Includes $350K of Real Estate

  3. Seller retiring and moving out of state

Risks/ Concerns:

  1. Owner dependency risk

  2. Revenue mix % breakdown

  3. Regulatory & licenses required

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.

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