❇️ New Deals - 7 March 2024

A marine transport service, marketing agency for healthcare providers, and 3 other interesting finds.

Author

Helen Guo
March 07, 2024

Today’s Sponsor

Hello SMB Deal Hunters!

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

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

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1/ Marine Transport Service

📍 Location: Grayson County, Texas
💰 Asking Price: $1,750,000
💼 EBITDA: $548,096
📊 Revenue: $1,922,361
📅 Established: 2015

💭 My 2 Cents: This business provides the specialized equipment and knowledge needed for transporting large commercial boats and yachts throughout the lower 48 states and Canada. As you can probably guess, this is extremely niche, so there are significant barriers to entry, which I love. Surprisingly (to me), there’s also a steady and growing demand for marine transport services, as yachts and commercial boats are becoming more popular worldwide. After all, somebody has to move the boats between locations for seasonal use, sales, or access to preferred cruising grounds. Also a real positive is that yacht and commercial boat owners often belong to a higher-income demographic willing to pay a premium for safe and reliable transport services. The result is very high ~30% net margins, a reasonable multiple, and tons of repeat revenue if they can secure long-term contracts with yacht manufacturers, boat dealers, and commercial operators. Right now all marketing is done through word-of-mouth, referrals, and website traffic, so there’s an excellent opportunity to grow through additional digital marketing and B2B sales.

2/ Marketing Agency For Private Practice Healthcare Providers

📍 Location: Houston, Texas
💰 Asking Price: $2,100,000
💼 EBITDA: $592,938
📊 Revenue: $892,749
📅 Established: 2009

💭 My 2 Cents: I love marketing agencies that focus on unsaturated niches as this usually results in a stickier clientele and stronger retention rates. This specific agency works with private healthcare providers to help with patient acquisition, furnishing a kind of all-in-one shop that provides website development, hosting, PPC management, and review generation capabilities. I like this niche because healthcare professionals normally don’t have the time, energy, or know-how to run their own marketing. As a result, their average client relationship duration is over 5 years, which is absolutely absurd in the agency world. The company has been around since 2009 with strong margins (typical of agencies). I also like that 95% of its revenue comes from recurring work (rather than project-based). I would want to confirm its client concentration (some of their clients are healthcare groups) but, assuming this checks out, this is a good business at a reasonable price.

3/ Refrigeration Vehicle Rental

📍 Location: Pierce County, Washington
💰 Asking Price: $2,750,000
💼 EBITDA: $902,660
📊 Revenue: $1,687,402
📅 Established: 2006

💭 My 2 Cents: This is a refrigeration vehicle rental business, which is an essential service for the food industry as these businesses need to safely store and transport fresh and frozen perishables. This business leases out a range of equipment, including refrigerated trucks, vans, trailers, and mobile walk-in coolers. For food companies, renting makes a ton of sense, as it’s a huge upfront investment to buy this equipment that could take years to pay off. Renting also makes it easier to adjust to different seasonal requirements. I really like that the business has a strong foothold in the festival and events space, which should come with a lot of repeat revenue since event planners tend to use the same vendors over and over again. There is also potential for growth in niches like commercial kitchens at restaurants and food service facilities. My main concern is with the seasonality of the business, so I’d want to better understand that, especially if I were getting an SBA loan with a monthly debt repayment. Otherwise, this is a cool essential business run by a retiring owner and listed at a fair price.

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4/ B2B E-Commerce Cosmetic Ingredient Supplier

📍 Location: San Francisco, California
💰 Asking Price: $1,600,000
💼 EBITDA: $506,000
📊 Revenue: $4,060,000
📅 Established: 1995

💭 My 2 Cents: I like B2B eCommerce businesses, but they are hard to come by. So you can image how happy I was to find this company that sells raw materials for cosmetic products such as lipstick and nail polish. It sells exclusively online, with both B2B (Indie makeup resellers) and B2C (DIYers) customers. In doing so, it is capitalizing on some very nice tailwinds, as in the current digital age Indies have quickly risen to be a strong segment in beauty, representing $30.5B in sales and capturing a 32% dollar share of the category. Indie brands are also now growing at 15.7% year over year, outpacing the 9.9% growth rate of the total beauty and personal care market. I’d want to know what percent of the firm’s business is B2B versus B2C, how long they've had their B2B relationships, and what LTV of these B2B customers looks like, but otherwise, things look pretty good here given they’ve been in operation for almost 30 years and have a team of 9 employees in place. Considering how hard it is to find quality B2B eCommerce businesses, this looks like a really attractive deal.

5/ Lash Extensions Studios (3 Locations)

📍 Location: San Antonio, Texas
💰 Asking Price: $1,460,000
💼 EBITDA: $582,467
📊 Revenue: $3,842,685
📅 Established: 2015

💭 My 2 Cents: Most of my readers are men, but as a woman, let me tell you that eyelash extensions are game-changing for one’s appearance. You’d be shocked how many women around you are shelling out $150-$200 monthly just for lash extensions. Those who regularly get lash extensions stick almost religiously to a routine where they get them maintained every 3-4 weeks. Given this, it’s unsurprising that lash extension is now a $1.1B market that is projected to log a CAGR over 7.5% from 2024 to 2032. With an expanding beauty and salon industry, celebrity endorsement, social media influence, and current beauty and aesthetics trends, it’s hard not to grow quickly. I like that this particular lash business for sale is actually 3 existing franchise locations (that are proven), as although you can’t organically grow franchises as much because of geographic restrictions, they do come with an existing blueprint. Thankfully, the 3 locations are already successful in this case, lessening any risk in taking them on. I’d want to know what specific support the franchisor offers, the sales breakdown across the 3 stores, and what percent of capacity they are operating at. While all the stores are fully staffed, I’d also like to know what staff retention looks like. Assuming everything checks out, this looks like a very solid opportunity.

🐦 The Best of SMB Twitter (X)

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Why you need a CEO peer group (link)

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8 boring but profitable businesses (link)

🤝 Vendors and Lenders

I’m committed to helping the SMB Deal Hunter community close more deals, faster. Click on any of the links below and I will make a personal introduction to folks I trust.

SBA 7(a) Lender: The most common way to finance an acquisition up to $5M purchase price with 10% (give or take) down with the help of a government-backed loan. My preferred lender Elyse will help you out.

Non-SBA Lender: Best for smaller deals if you want to avoid the hassles of SBA. My preferred lender Grant and his team are the only private lenders I know who offer acquisition financing with long payback periods without any collateral requirements. Note: You must have great credit.

Quality of Earnings Provider: I always recommend conducting a QoE during due diligence to uncover any red flags. Get introduced to my preferred QoE provider that offers top-tier financial due diligence without breaking the bank.

Legal Counsel: A must-have on your team to help get a deal to the finish line. Get introduced to legal counsel with experience closing SMB deals that won’t rack up your legal bill.

See you next Tuesday!

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

1. Want me to help you find a business to buy in the next 90 days and handhold you through closing your first deal? Apply to work with me.

2. 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 investing in. Reply “LP” and I’ll share more.

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.