• SMB Deal Hunter
  • Posts
  • New Deals: A digital marketing agency, electrical company, and 3 other finds

New Deals: A digital marketing agency, electrical company, and 3 other finds

Plus, the economics of independent sponsor deals

Today’s Sponsor

Hello SMB Deal Hunters!

Thanks for all the great feedback from the deals I shared on Thursday!

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

Today's issue is sponsored by SMB Diligence, the platform I helped start for matching business buyers with vetted legal counsel and Quality of Earnings providers. 

WORK WITH ME

Want me and my team to work with you to find, finance, and acquire a million-dollar cash-flowing business in the next 6-12 months? Apply to join SMB Deal Hunter Pro.

Here’s what one member shared this past week:

NEW DEALS

1/ Digital Marketing Agency

📍 Location: Massachussets
💰 Asking Price: $4,000,000
💼 EBITDA: $1,000,000
📊 Revenue: $3,000,000
📅 Established: 2005

💭 My 2 Cents: This marketing agency utilizes a global remote staffing model to access top talent while maintaining a lean cost structure and achieving strong 33% margins. While relatively small, they are highly capable, as their full suite of offerings include SEO, paid media (Google, Facebook/Meta), content strategy, reputation management, and CRO. I really like that a large part of their revenue is driven by recurring retainer-based contracts, their minimal client concentration risk (which is common with marketing agencies), and their loyal clientele, many of whom have switched to them from less agile and less collaborative larger firms. I’d want to check what services generate the most revenue, whether they serve a specific industry, client performance metrics (to confirm they’re actually delivering results clients value), historical client churn (healthy agencies typically have <20% annual churn), whether clients are under formal contracts or month-to-month, and the sales pipeline and backlog. I’d also want to understand if they have strong account managers, media buyers, and content creators (as well as SOPs) in place, and how scalable their current structure is without adding significant overhead.

2/ Electrical Company

📍 Location: North Carolina
💰 Asking Price: $3,100,000
💼 EBITDA: $1,023,569
📊 Revenue: $2,691,406
📅 Established: 2016

💭 My 2 Cents: This business proves you don’t need to be an electrician to own a highly successful electrical contractor, as their owner, who is not an electrician, relies on their staff to handle all day-to-day field operations. This staff includes a GM and PM, both of whom hold the necessary licenses, and six skilled journeymen. I like their mix of commercial (60%) and residential (40%) work, predictable hours without emergency after-hour calls, strong online reviews, and stellar (37%) margins. I’d need to ensure that their key employees will be staying post-sale or that there is a plan to replace them. I’d also need to know their breakdown between new business and repeat clients, what their backlog and pipeline look like, who their main competition is, and the condition of the 10 vehicles and other equipment included in the sale. Ultimately, this could be a great opportunity for a buyer without direct industry experience, as the seller is offering both financing and an extended transition.

3/ Moving and Transportation Business

📍 Location: Colorado
💰 Asking Price: $5,350,000
💼 EBITDA: $1,220,000
📊 Revenue: $5,555,000
📅 Established: 2013

💭 My 2 Cents: This high-margin moving and transportation company boasts a well-honed infrastructure and a strong management team, which together allow for minimal owner involvement. I really like their robust staff, solid profitability, large asset base that includes their fleet of trucks, and updated systems for efficient management and dispatching. The listing values the business on their own at $3.6M and then adds $1.7M for the fleet and other equipment to get to the total asking price, so there might be room for movement once a buyer does their own appraisal of the FF&E. I’d want more detail on their residential vs commercial client mix, their repeat business rate and how they bring in new clients, their volume of local versus long-distance moves, if their equipment is fully paid off and if any is pending major maintenance or replacement, and the lease terms for their facility. While this isn’t an industry where I expect to see much growth as a whole, people and businesses always move (job changes, life events, or corporate relocations), ensuring constant baseline demand even during recessions.

PRESENTED BY SMB DILIGENCE

Here’s Why You Shouldn’t Skip Due Diligence…

A friend of mine put a business under LOI and asked me for my advice.

I recommended he contract a 3rd party due diligence partner to rebuild the company's P&L from scratch.

Turns out their EBITDA was off by 2x 😳

SMB Diligence is the platform I helped start for matching business buyers with vetted diligence providers, from M&A lawyers to Quality of Earnings providers.

Their network of experts has worked on hundreds of small business transactions (including many from the SMB Deal Hunter community).

4/ Property Preservation Business

📍 Location: California
💰 Asking Price: $2,100,000
💼 EBITDA: $576,524
📊 Revenue: $3,875,244
📅 Established: 2012

💭 My 2 Cents: This niche property preservation company in California handles such functions as trash outs, evictions, recurring lawn and maid services, and landscaping for major clients like Wells Fargo, US Bank, and Raymond James. I like how their clientele is primarily financial institutions, as these represent an extremely sticky client base, with roughly 75% of the properties they manage in foreclosure. I also like their remote operating model, ready scalability, and potential to grow by expanding into new territories. I’d need to get a handle on any possible client concentration, how they source new business and if bidding can be involved, whether there are formal contracts in place or if it's a work-order basis, what the renewal process for these relationships is, how much competition they routinely face, and the level of their recurring revenue. Since the business is based in California and subject to strict labor laws, I’d also dig into how much work is done in-house vs by sub-contractors and confirm they‘re not using 1099s improperly. Ultimately, property preservation services are counter-cyclical (when foreclosures and evictions rise, demand increases), so you're getting a basically recession-proof cash source.

5/ HVAC Company

📍 Location: New York
💰 Asking Price: $2,500,000
💼 EBITDA: $675,000
📊 Revenue: $2,900,000
📅 Established: 1990

💭 My 2 Cents: HVAC companies are one of the hottest segments of the SMB market, so if interested don’t wait on this one. What immediately stands out here is that they generate a really compelling 90% of their revenue from recurring service agreements, as this both provides steady earnings and reduces seasonality and smoothes cash flow (a huge advantage in HVAC where demand can otherwise swing with the weather). I also see significant growth potential here, as they currently have no dedicated sales staff or marketing efforts, pointing to an immediate way to boost top-line performance by adding these. I’d want to understand the quality and terms of the service agreements, including length, churn, cancellation terms, and whether they allow for annual price increases to match inflation/labor costs. I’d also want to check on the size and breakdown of their staff (and whether any of them maintain critical client relationships) as well as technician turnover. Assuming everything checks out, this is a core essential business priced at a very reasonable multiple.

THE BEST OF SMB TWITTER (X)

The economics of independent sponsor deals (link)

Q1 M&A activity (link)

New SBA equity injection requirements (link)

Thoughts on private equity (link)

10 home service businesses (link)

A QoE war story (link)

Three phases of being a business owner (link)

COMMUNITY PERKS

Want to invest passively in SMB acquisitions? Get access to investment opportunities.

Get a personal introduction to my preferred SBA 7(a) lender, non-SBA lenders, Quality of Earnings providers, or legal counsel

Raising capital for your deal? I’ll connect you with investors from the SMB Deal Hunter Community.

Interested in selling your business? I’ll help you connect with buyers from the SMB Deal Hunter Community.

RECENT PODCAST EPISODES

How This Former Gym Franchisee Pivoted Into Online Business Acquisitions (link)

Buying an Accounting Firm Without Being a CPA? She Did It. (link)

He Acquired a Fuel Equipment Maintenance Business. 3 Years Later, Investors Forced Him Out. (link)

THAT’S A WRAP

See you tomorrow with a new podcast episode!

P.S. I'd love your feedback. Tap the poll below or reply to this email.

How was today's newsletter?

Login or Subscribe to participate in polls.

Disclaimer

This publication is a newsletter only and the information provided herein is the opinion of our editors and writers only. Any transaction or opportunity of any kind is provided for information only; SMB Deal Hunter does not verify nor confirm information. SMB Deal Hunter is not making any offer to readers to participate in any transaction or opportunity described herein.