This Week In SMB PE | August 13th, 2024

A Weekly Recap of SMB Deal + Opportunities

Author

Dennis Unrein
August 13, 2024

Welcome to This Week In SMB PE. Our weekly recap of deals in the SMB M&A and Micro Private equity 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.

This Week In SMB PE

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Prior Posts:

SMB PE 101 Paid 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 and locate potential SMBs for purchase.

1) Free Resources From SMB PE:

2) Paid M&A Community Hosted on Skool

  1. SMB PE Accelerator via Skool ($99 / Month)

We are designing the Skool to provide M&A Advisory to individuals looking at buying companies and how to buy a company.

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

3) Allergic to subscriptions? SMB PE resources on-time purchase below:

  • 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.

Interested In A Deal? Expanded information included below:

1. Pool Leak Detection Company - South Carolina - $2.3M Revenue | $610K Cashflow

Deal Summary:

  • $2.3M Revenue

  • $1.5M Ask Price

  • 2.5x Multiple

  • $610K Annual Cash Flow

What does the Company do?

  1. Leak detection services.

  2. Electronic detection equipment

  3. Pool inspections.

Highlights:

  1. Strong market demand.

  2. Established reputation.

  3. Business systems in place

Risks/ Concerns:

  1. What is the competition

  2. Customer concentration

  3. Length of contracts

2. Tree Service Business - Rhode Island - $4.0M Revenue | $2.2M Cashflow

Deal Summary:

  • $4.0M Revenue

  • $4.9M Ask Price

  • 2.2x Multiple

  • $2.2M Cashflow

What Do They Do?

  1. Full service tree removal

  2. Tree trimming, stump grinding

  3. Crane services, lawn service, excavators

Highlights

  1. Strong revenue growth potential.

  2. Experienced staff (Arborist)

  3. FF&E valued at $4.5M

Risks/ Concerns:

  1. Liability from tree hazards

  2. Regulatory compliance challenges

  3. Seasonal demand fluctuations

3. Waste Disposal Business - Pennsylvania - $2.0M Revenue | $700K Cashflow

Deal Summary:

  • $2.0M Revenue

  • $3.2M Ask Price

  • 4.6x Multiple

  • $700K Cashflow

What Do They Do?

  1. Waste collection, recycling, disposal

  2. Roll-off + front-load container services

  3. Same-Day Pickup Service

Highlights:

  1. $2M equipment included

  2. Diverse customer base

  3. Recession Resistant

Risks/ Concerns:

  1. Competition in the market

  2. Environmental compliance

  3. Operations/ Logistical challenges

4. Retail Steel Sales - Oregon - $3.3M Revenue | $680K Cashflow

Deal Summary:

  • $3.3M Revenue

  • $2.8M Ask Price

  • 4.1x Multiple

  • $680K Cashflow

What does the Company do?

  1. Distributes metal products

  2. Steel, aluminum, brass

  3. Similar to a "Lumber Yard"

Highlights:

  1. Diverse customer base

  2. 50+ years in operation

  3. Knowledgeable staff

Risks/ Concerns:

  1. Customer concentration %

  2. Accounting issues

  3. Regulatory compliance

5. Hydro-Excavation and Construction Services - Oklahoma - $2.1M Revenue | $949K Cashflow

Deal Summary:

  • $2.1M Revenue

  • $2.2M Ask Price

  • 2.4x Multiple

  • $949K Cashflow

What does the Company do?

  1. Excavation & Construction Services

  2. Hydro-excavation, potholing, remediation, clean-up

  3. Oilfield rentals + vacuum services

Highlights:

  1. Diverse customer base

  2. Strong cash flow

  3. Established 15+ years ago

Risks/ Concerns:

  1. Regulatory compliance complexities

  2. Skilled labor shortages

  3. Market demand fluctuations

6. Plumbing Company - Ohio - $5.2M Revenue | $531K Cashflow

Deal Summary:

  • $5.2M Revenue

  • $2.1M Ask Price

  • 4.0x Multiple

  • $531K Cashflow

What does the Company do?

  1. Residential and commercial customers.

  2. Comprehensive plumbing services.

  3. Certified for specialized services.

Highlights:

  1. Online + traditional marketing

  2. Loyal customer base

  3. Skilled, loyal workforce of 25

Risks/ Concerns:

  1. High market competition

  2. Licenses for health regulators

  3. Employee turnover issues

7. Commercial Roofing - North Dakota - $1.8M Revenue | $733K Cashflow

Deal Summary:

  • $1.8M Revenue

  • $2.0M Ask Price

  • 2.7x Multiple

  • $733K Cashflow

What does the Company do?

  1. Commercial Roofing & Construction

  2. Roof Installation, Repair, Gutter Solutions

  3. Commercial and Government Customers

Highlights:

  1. Strong history of profitability

  2. Established reputation, 35 Years Old

  3. Sticky-contracts Schools, Churches, Retail

Risks/ Concerns:

  1. Construction exposure

  2. Small team of 5, any key people at risk

  3. Recent inflation impact on materials

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