New Deals - 17 Aug 2023

by SMB Deal Hunter

Author

Helen Guo
August 17, 2023

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Today’s Sponsor

Hello SMB Deal Hunters!

I’m excited to share 5 new deals worth checking out.

Today’s issue is sponsored by Appletree, a premier partner for bookkeeping, payroll, and tax services catering to small businesses nationwide.

1/ Specialty B2B Service Provider of Security Systems

📍 Location: Colorado
💰 Asking Price: N/A
💼 Cash Flow: $633,235
📊 Revenue: $3,539,571
📅 Established: 1978

💭 My 2 Cents: I like that this business serves a diverse mix of business sectors and has $3.8 million of signed contracts in the pipeline already! They specialize in security, fire, and communication systems. Security system providers generally have strong recurring revenue from monitoring services, and I like that the B2B focus means sticky customers (high switching costs). There’s also a growing demand for security systems from increasing concerns about safety and security, and many industries are under mandates to maintain certain security standards. I’d want to understand what % of their revenue comes from one-time services (i.e. installations) vs recurring services (i.e. monitoring). Since the business works with some large customers (i.e. municipalities and governments), I’d also want to make sure there isn’t a customer concentration problem, as losing one of those clients could severely impact profitability.

2/ Pet Care and Boarding Business

📍 Location: Colorado
💰 Asking Price: N/A
💼 Cash Flow: $601,085
📊 Revenue: $1,128,605
📅 Established: 25 years ago

💭 My 2 Cents: What the bark, the margins on this pet care and boarding business are over 50% (!). They provide doggy day care, overnight boarding, group hikes (I wish I were a dog now), a mobile pick-up and drop-off service, and in-home care for both dogs and cats. The business runs entirely on word of mouth and the current owners say they’re generating more business than they can currently handle. I like that there’s already a team of 6 employees. IMO there are 3 interesting growth opportunities here: 1) Grow the team to fully capture existing organic demand, 2) Run paid marketing, 3) Add additional services such as grooming and training. Of course, there’s always the opportunity to open additional locations as well.

Click Here To View The Listing »

3/ Custom Built Refrigerated Display Cases eCommerce Brand with 80% Repeat Orders

📍 Location: Tampa, FL
💰 Asking Price: $2,000,000
💼 Cash Flow: $592,257
📊 Revenue: $1,494,987
📅 Established: 2004

💭 My 2 Cents: I love coming across B2B e-Commerce businesses because usually the customers are stickier. This one sells custom-built refrigerated display cases for the sushi industry. 100% of its sales are organic (which is a big reason why their margins are stellar), and the company has a stunning 80% repeat purchase rate from its restaurant clients. The AOV is $4000, which means there is definitely an opportunity to start up paid advertising and hire more sales people. I also like that the business comes with a team of 7 staff members spanning sales to production.

Click Here To View The Listing »

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4/ Profitable and Established Home Health Care

📍 Location: New Mexico
💰 Asking Price: $5,400,587
💼 Cash Flow: $1,404,630
📊 Revenue: $7,384,394
📅 Established: 2004

💭 My 2 Cents: You already know I’m bullish on the in-home care industry based on how many of these deals I have featured in recent weeks. In-home care is the future because it’s more personalized to the individual’s needs, doesn’t require seniors to move into assisted living, and it’s lower cost to the government as the population ages. I like that this particular business has so much demand that they actually have a waiting list! They have a team of 105 employees and have been around for nearly 20 years. The size of this business makes it potentially a good platform deal for a roll-up!

5/ Well Established Commercial Freight Brokerage

📍 Location: South Carolina (Relocatable)
💰 Asking Price: $4,250,000
💼 Cash Flow: $1,190,925
📊 Revenue: $7,141,509
📅 Established: 1979

💭 My 2 Cents: Commercial freight brokerages are the intermediary between shippers who have goods to transport and carriers who can move those goods. Not only do brokers help simplify the process for shippers, they can often provide more competitive rates by consolidating loads or optimizing routes. Carriers can also use brokers to find consistent and profitable loads. What’s particularly interesting to me is that the U.S. carrier network is highly fragmented — in fact, 99% of carriers operate with less than 100 trucks. Small carriers often don’t have the time or desire to manage biz-dev or customer relationships, turning to brokers to source customers on their behalf. I like that this business has been around for over 40 years, which means it has probably developed strong relationships and has a good reputation.

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🧠 Mastermind Announcement - Applications Now Open!

I know I’ve been teasing you guys for a while now, but I’m excited to finally open applications for the SMB Deal Hunter Mastermind!

As a reminder, this will be an active community for serious acquisition entrepreneurs and investors.

We'll share insights, ask questions, and collaborate in bi-weekly Zoom calls and a Slack channel.

Spots are limited and will be released on a first-come, first-served basis to qualified applicants.

See you next Tuesday!

P.S. Whenever you’re ready, here are a few ways for us to work together:

1. Invest with me in cash-flowing SMB deals. I’m bringing on a select few investors from this community into businesses I’m buying and operating. Reply “LP” and I’ll share more.

2. I'm launching an exclusive SMB Deal Hunters Mastermind for serious acquisition entrepreneurs and investors in a few weeks. We'll share insights, ask questions, and collaborate in bi-weekly calls and a Slack channel. Want in? Apply here.

3. Raising money for a deal under LOI and need introductions to investors? Reply “fundraise” for my help.

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📚 What I’m Reading

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  • Sieva Kozinsky's Newsletter — The founder of Enduring Ventures shares weekly insights from his experience buying 17+ cash-flowing businesses

  • Houck's Newsletter — Tactical advice every week from an a16z-backed founder on how to build, grow, and raise capital for your startup

  • The Breakthrough by Mark Manson — From the author of The Subtle Art of Not Giving a F*ck, receive one idea, one question, and one exercise each week that could spark your next breakthrough.

  • Dinner Table Discussions — The most important financial news of the week, summarizes in a way you’ll actually enjoy, paired with a focus on your family.

🎤 HoldCoConf 2023 Is Coming Up!

HoldCoConf 2023 is coming up September 18-20 in Cleveland, and SMB Deal Hunter readers get $500 off!

It’s the official "un-conference" of micro-PE where holding companies meet, learn, scale, and grow.

The lineup of speakers and panels is STACKED this year, including Michael Girdley, Sieva Kozinsky (Enduring Ventures), Bryan Rand, Mark Brooks (Permanent Equity), Thomas Ince, James Higgins (Chenmark), and more.

Buy your ticket here (use code HELEN for $500 off!)

P.S. Let me know if you’ll be there!

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