❇️ New Deals - 2 Jan 2024

An Amazon FBA pet food brand, in-home care provider, and 3 other interesting finds.

Today's Sponsor

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Hello SMB Deal Hunters!

First off, Happy New Year! I’m excited to return to our normal Tuesday and Thursday schedule after taking last week off. 

As always, today I’m sharing 5 new deals worth checking out.

But before we dive in, here’s a 👀 sneak peek of what’s coming up this year:

  1. SMB Fund

    I'm bringing on investors from the SMB Deal Hunter community into a fund I’m launching to acquire and grow a diversified portfolio of cash-flowing businesses. Join the Waitlist »

  2. Off-Market Deals

    I’ll be introducing off-market businesses for sale that you won’t find anywhere else.

  3. Search-For-You Program

    Enjoy the deals I share but looking for something more specific? I’ll be running customized searches to help you find on and off-market deals that fit your buy box. Join the Waitlist »

  4. Educational Content

    I’ll be releasing in-depth content on how to source, structure, and close deals.

Poll: What are you most excited about from SMB Deal Hunter in 2024?

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Today’s issue is sponsored by Michael Girdley, Chairman of a $100M+/Year Revenue HoldCo who just launched his new course, How to Find a Great Business to Buy.

1/ Amazon FBA Pet Food Brand

📍 Location: Remote
💰 Asking Price: $6,000,000
💼 EBITDA: $1,195,000
📊 Revenue: $4,678,000
📅 Established: 2016

💭 My 2 Cents: This is an Amazon pet food brand that offers healthy, all-natural single-ingredient dog bones and treats. All of their sales are from Amazon, with a good portion of it ($1.4M in revenue) coming from their strong subscription program which has grown 30% in the last year (although I do want to see what retention looks like). I like how efficient their advertising efforts are, as they have an exceptional Total Advertising Cost of Sale (TACoS) of less than 5.5%. Combine those factors with the fact the company is basically run by one VA, and you have a brand that is very profitable and takes less than 5 hours a week of the owner’s time. That already sounds pretty good, and I can think of multiple ways you can grow this business even further. You can launch additional products. You can juice the marketing with affiliates and influencers. Or you could probably even spin up a DTC site and capture some additional search traffic.

2/ DoD Contractor

📍 Location: Midwest
💰 Asking Price: N/A
💼 EBITDA: $1,600,000
📊 Revenue: $6,800,000
📅 Established: N/A

💭 My 2 Cents: Everyone needs blue-collar workers, and the government is no exception. Enter this business which hooks the Department of Defense (DoD) with workers like forklift drivers and janitorial staff for over 15 years now. What I really like about this business is that anyone who wishes to work with the DoD needs to obtain a Top-Secret Clearance, which takes roughly 4 months to secure. This is a very high barrier to entry, which is always nice to have. I also like that the contracts are for 5-year terms, as this provides consistent predictable revenue, which you can see in the company’s EBITDA for the last 3 years ($1.3M, $1.4M, and $1.6M). Plus, there’s management in place. Overall, this looks like a pretty cool and unique opportunity, but I do want to know what the process is for finding laborers (and how difficult it is to hire them), what the bidding process for contracts is (and how successful they are), and what the renewal rates look like for those contracts.

3/ Managed IT Services Provider

📍 Location: Alabama
💰 Asking Price: N/A
💼 EBITDA: $1,363,000
📊 Revenue: $4,700,000
📅 Established: N/A

💭 My 2 Cents: If you’ve been reading the newsletter for a while, then you know I love MSPs. How could I not love an industry that comes with sticky, high-value contracts and is expected to be worth $88.5B in 2028? This particular MSP has been serving small and medium-sized medical and non-profit companies for over 24 years. Because of this diverse clientele, they have absolutely no concentration issues, as no single client accounts for more than 5% of revenue. However, even with so many different clients (350 to be exact), 77% of their revenue is still recurring in nature. That’s the best of both worlds. I’d want to better understand what they are doing for sales and marketing (and if they’re not doing much, this is an opportunity for growth), what client retention looks like, and what the owner’s role is in the business.

In Partnership With Michael Girdley

The old ways of finding a business to buy just don’t work anymore.

I’m Michael Girdley. I’ve been a part of nearly 20 small business sales and purchases. And I’ve found the search is the hardest part.

The advice out there now simply doesn’t work in today’s reality.

So I built a course. How to Find a Great Business to Buy is laser-focused on how to run an effective search and short enough to take in an afternoon.

We’ll cover:

-Narrowing your search with a tight thesis

-Scaling your outreach to maximize your leads

-Running your funnel like a pro

It’s 18 video lessons packed with value.

Check it out! → holdco.girdley.com/greatbusiness

4/ Photobooth SaaS Company

📍 Location: Las Vegas, NV
💰 Asking Price: $950,000
💼 EBITDA: $437,564
📊 Revenue: $527,591
📅 Established: N/A

💭 My 2 Cents: If you’ve been to a wedding recently, you’ll know that 360-degree photobooths are all the rage. This is a SaaS company selling 360-degree photobooth software to businesses. It has 1000+ paying subscribers, who I‘m guessing are mostly event businesses. One thing I really like is that it comes with a team that is staying on, which eases the transition for a new owner. I also love how high the margins are (gotta love that about SaaS businesses!) and how cheap the business is listed for. Finding a profitable SaaS for 2.17x EBITDA is almost impossible, and the only reason this one is so cheap is because of the owner’s desire to pay off some debts. It all looks pretty good, but I do want to know what churn is like, what the average contract size is, how they compare to competitors, and how they attract leads.

5/ In-Home Senior Care Provider

📍 Location: Long Island, NY
💰 Asking Price: $1,765,000
💼 EBITDA: $544,760
📊 Revenue: $3,429,901
📅 Established: 2011

💭 My 2 Cents: The US is an aging country, a trend that’s only continuing as the country’s more than 80 million boomers grow older. That aging is going to come with the need for a lot of medical care, which usually takes place in either a nursing home, an assisted-living facility, or in the patient’s home. Unsurprisingly, most people prefer the at-home option. Enter this in-home personal care provider which serves families throughout Long Island. I like that the business comes with 95 employees and a retiring owner (although I’d want to dig into what their role is). I also like that there’s a clear growth opportunity in consolidating the hyper-fragmented home care market. I do want to know what the process is for hiring staff members and how they find clients, but otherwise, this looks like a good opportunity in a field that is only growing in importance.

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🤝 Vendors and Lenders

I frequently get asked by you guys for recommendations on SBA lenders, quality of earnings providers, and legal counsel.

I’ve decided to streamline this to help the SMB Deal Hunter community close more deals, faster.

Fill out this form and I will personally make introductions to folks I trust.

See you Thursday!

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. Upgrade to SMB Deal Hunter+ to unlock full access to all deals I feature in this newsletter and get invited to weekly mastermind calls with fellow acquisition entrepreneurs and investors.

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

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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.