This Week In SMB PE | October 8th, 2024

A Weekly Recap of SMB Deal + Opportunities

Author

Dennis Unrein
October 08, 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. Profitable Laundromat - Colorado | $725K Revenue | $290K Cashflow

Deal Summary:

  • $725K Revenue

  • $290K Cashflow

  • $810K Ask Price

  • 2.8x Cashflow Multiple

What Do They Do?

  1. Self-service laundry operations

  2. Includes 52 washers + 48 dryers

  3. Well-maintained, requires minimal oversight

Highlights:

  1. Strong customer loyalty

  2. Busy area (high foot traffic)

  3. No wash & fold or vending machines

Risks/ Concerns:

  1. Equipment capex costs, machine age

  2. Local competition saturation

  3. No team in place, 1 employee listed

2. Event Rental Business - Florida | $4.1M Revenue | $1.0M Cashflow

Deal Summary:

  • $4.1M Revenue

  • $1.0M Cashflow

  • $3.5M Ask Price

  • 3.2x Cashflow Multiple

What does the Company do?

  1. Event rental services

  2. Weddings, Business & Charity, Holiday events

  3. Tent sizes, flooring, stages, tables

Highlights:

  1. Established 1991, Owner retiring

  2. Established reputation

  3. Experienced team & crew leaders

Risks/ Concerns:

  1. Owner dependency risk

  2. Team integration challenges

  3. New capex spending needs

3. 50+ year Landscape + Design Co. - New Jersey | $920K Revenue | $280K Cashflow

Deal Summary:

  • $920K Revenue

  • $280K Cashflow

  • $699K Ask Price

  • 2.5x Cashflow Multiple

What does the Company do?

  1. Landscape design + maintenance services

  2. Pavers, patios, plantings, gardens

  3. Seasonal: April through November only

Highlights:

  1. Established in 1971, Seller retiring

  2. Recurring & project-based revenues

  3. Room to add winter services off-season

Risks/ Concerns:

  1. Project vs Maintenance Revenue

  2. Owner dependency risk

  3. Any key employees at risk

4. Youth Dance Academy - Florida | $3.0M Revenue | $1.2M Cashflow

Deal Summary:

  • $3.0M Revenue

  • $1.2M Cashflow

  • $4.4M Ask Price

  • 3.6x Cashflow Multiple

What does the Company do?

  1. Youth dance academy

  2. Core offering weekly dance classes

  3. Ticket sales, merchandise, summer camp

Highlights:

  1. Decades-old, established brand

  2. State-of-the-art studios

  3. Seasoned, well-tenured instructors

Risks/ Concerns:

  1. Instructor turnover post-close

  2. Owner dependency risk

  3. Customer acquisition cost

5. Tree Care Company - Florida | $2.5M Revenue | $774K Cashflow

Deal Summary:

  • $2.5M Revenue

  • $774K Cashflow

  • $3.0M Ask Price

  • 3.9x Cashflow Multiple

What does the Company do?

  1. Commercial + residential tree services

  2. Tree removal and tree maintenance

  3. Emergency and hurricane services

Highlights:

  1. 30+ years in the business, Est. 1990

  2. Best in Reader’s Choice awards for almost 10 years

  3. Established team of 16 employees

Risks/ Concerns:

  1. Owner/ CEO is arborist - anyone else on staff?

  2. Fair value of $1.9M in equipment

  3. What % of customers are commercial? Vs. residential?

6. Laundry Business - Texas | $730K Revenue | $502K Cashflow

Deal Summary:

  • $730K Revenue

  • $502K Cashflow

  • $2.3M Ask Price

  • 4.6x Cashflow Multiple

  • $500K Equipment Included

What does the Company do?

  1. Coinless self-service laundry

  2. Vending machines with drinks, snacks

  3. Sell laundry supplies detergent, dryer sheets

Highlights:

  1. Advanced, energy-efficient machines

  2. Located near 40,000 student university

  3. Managed by team of three part-time attendants

Risks/ Concerns:

  1. Business was founded in 2020, why sell?

  2. Strong competition in area from other laundromats

  3. Environment and regulatory compliance

7. 12+ Year Refrigeration & HVAC Co. - Iowa | $938K Revenue | $350K Cashflow

Deal Summary:

  • $938K Revenue

  • $350K Cashflow

  • $350K Ask Price

  • 1.0x Cashflow Multiple

What does the Company do?

  1. Refrigeration, HVAC, appliance repair

  2. Commercial + residential customers

  3. Diverse revenue streams

Highlights:

  1. Established client base (150+ accounts)

  2. Below market CF multiple

  3. Established team of 4 in place

Risks/ Concerns:

  1. Why the 1x price?

  2. Local market competition

  3. Owner dependency risk

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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