New Deals - 9 Nov 2023

A pair of health and wellness affiliate sites, B2B e-Commerce selling commercial hardware, commercial landscaping company, and 2 more interesting finds.

Author

Helen Guo
November 09, 2023

Today’s Sponsor

Hello SMB Deal Hunters!

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

Looks like you guys are going to be fighting for the dry food co-packer I featured 😅

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

Today’s issue is sponsored by Rejigg, a new platform that features exclusive off-market SMB deals.

Want to promote your business or deal under LOI to my community of 14,000+ entrepreneurs and investors? Reply “advertise” and I’ll share my media kit.

1/ Two Health And Wellness Affiliate Sites

📍 Location: N/A
💰 Asking Price: $2,100,000
💼 EBITDA: $729,418
📊 Revenue: $1,141,975
📅 Established: 2018 and 2019

💭 My 2 Cents: Affiliate sites typically have crazy margins because their product is fully digital. Basically, they are cash cows. This deal of two health and wellness content sites is no exception, and to top it off they have affiliate partnerships with big telehealth brands like Hims and Roman. They cover a broad range of health topics with medically reviewed articles and insights from licensed professionals, and their credibility is further boosted by backlinks from top-tier publications like Forbes and Healthline. The result is strong website traffic and domain authority. With a solid mix of paid and organic traffic and a skilled 6-person team, these sites are poised for growth, especially if you can expand affiliate partnerships and scale paid search efforts.

2/ Asphalt, Concrete, and Property Maintenance Services

📍 Location: Midwest, US
💰 Asking Price: N/A
💼 EBITDA: $1,415,000
📊 Revenue: $5,244,000
📅 Established: N/A

💭 My 2 Cents: This company has provided high-margin concrete and asphalt services to commercial and residential properties in the Midwest for 20 years. I like that it has an impressive 88% repeat client rate as that is a testament to the quality of the service (as well as the essential nature of the service), which includes innovative infrared asphalt repair and more traditional services like traffic marking and sewer repair. It’s also great that their client base consists primarily of large portfolio property owners because as they acquire more properties, the company will naturally get more business. However, I would want to see if any single client accounts for more than 10-20% of revenue. I’d also want to dig into the nature of client relationships. Do they have contracts and if not, how long have the clients been working with them? Finally, I’d need to understand the revenue breakdown across services and what the team is like in order to get the full picture of the company's future prospects.

3/ Commercial Hardware Products eCommerce Brand

📍 Location: N/A
💰 Asking Price: $6,500,000
💼 EBITDA: $1,460,036
📊 Revenue: $4,000,744
📅 Established: 2018

💭 My 2 Cents: If you’re a frequent reader, then you know that I love B2B eCommerce companies for their higher AOVs, low competition, and sweet repeat order rate. But, even in the lucrative world of B2B eCommerce, this SBA pre-qualified company stands out with an almost unheard of 36% net profit margin. They specialize in high-end commercial hardware products like door locks and closers, and everything is sold under their own private-label brand (primarily) on Amazon. Who knew that commercial door locks had 86% gross margins?! The result is an impressive 32% average YoY growth and an AOV of $210. I can see multiple avenues for growth. The product line could be expanded to include commercial door hinges and electrified products (you’ll want to leverage a tool like Helium10 to do some product and keyword research). Additionally, you could spin up a D2C site and leverage paid search to drive traffic to it. Just from a quick search on SEMRush I can already see that terms like “commercial door locks” are not being heavily bid on, so there is definitely an opportunity here!

In Partnership With Rejigg

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4/ Commercial Landscaping And Mowing Company

📍 Location: Manatee and Sarasota Counties, FL
💰 Asking Price: $2,480,000
💼 EBITDA: $708,064
📊 Revenue: $5,161,991
📅 Established: 1996

💭 My 2 Cents: I’ve always loved the commercial landscaping and tree care industry for its contracts, year-round work, and easier labor hiring compared to trades like HVAC and plumbing. With a 27-year track record, this business likely enjoys a strong local reputation. What sweetens the deal is the 81 full-time employees, 27 part-timers, and franchise backing, meaning there are probably strong SOPs in place. This makes it attractive for those looking to be hands-off. However, I’d still want to explore what geographic limitations exist from the franchisor and exactly what support the franchise provides. I’d also want to better understand their relationships with clients. Specifically, the number of clients, how long they’ve been around, what the average contract length, what percentage churns, and if any of them represent more than 10-20% of revenue.

5/ Nootropic Supplements E-Commerce Brand

📍 Location: N/A
💰 Asking Price: $2,000,000
💼 EBITDA: $600,421
📊 Revenue: $2,044,549
📅 Established: 2019

💭 My 2 Cents: If you follow Peter Attia, Dave Asprey, and Bryan Johnson, then you probably know all about nootropics. They are supplements that can boost brain performance and they have gained widespread popularity (the nootropic Reddit community has 377k followers!). This nootropic brand primarily sells through Amazon FBA, but they also maintain a small D2C presence. What I like about supplements is that you have to take them regularly, which naturally lends itself to a subscription offering. This is clearly seen in this company’s eye-popping 5000 subscriber base. With a reaaaalllly long 4-month lead time, there's a clear opportunity for massive cash conversion cycle improvement. I bet you can cut that time in half with the right co-manufacturer partnership. Besides that, I’m curious how much they spend on ads and what their ACOS (advertising cost of sales) is. These are key metrics that will tell me where the opportunities to capture more market share are. On the product side, I want to know what the product development process looks like and how differentiated their products are. Finally, I’d also want to see the analytics on their performance with Amazon’s Subscribe & Save program.

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🤝 Vendors and Lenders

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See you next Tuesday!

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📚 What I’m Reading

SMB Scoop by Ben Tiggelaar

Ben is an acquisition entrepreneur who bought a healthcare business at 26 years old and grew it 8x by the time he turned 31.

He now shares weekly lessons on finding, buying, operating, and investing in cash-flowing small businesses.

I particularly enjoyed his recent newsletter on personal guarantees when it comes to small business acquisitions.

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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.