Acquisitions Anonymous - #1 for business buying, selling and operating

In this episode of Acquisitions Anonymous, hosts Michael Girdley, Bill D’Alessandro, Heather Endresen, and Mills Snell dive into the sale of a sleep disorder and attention deficit disorder medical practice based in Detroit, Michigan. With an asking price of $5 million and a net cash flow of $1.8 million, the team discusses the complexities of owning a medical practice, the revenue potential from sleep apnea treatments, and whether an owner needs to be a licensed physician. They explore the practice’s payer mix, potential technological disruptions, and whether owning the CPAP distribution side of the business is key to profitability.

Key Points Discussed:

- Payer Mix and Margins: How the mix of private insurance, Medicare, and Medicaid impacts the clinic’s value.
- Physician Ownership: Whether a non-physician can own this practice through an MSO (Medical Service Organization).
- CPAP Business Model: Understanding whether the clinic profits from the sales and maintenance of CPAP machines.
- Market Trends: The increasing prevalence of sleep disorders and the residual income potential from repeat visits and equipment servicing.

Thanks to this week’s sponsor:

Acquisition Lab and their team have been longtime supporters of the pod. Acquisition Lab exists to help people buy a business and navigate all the complexities of the process, as well as provide a trusted framework, tools, and resources to support you from search to close.

If you are serious about buying a business, check out acquisitionlab.com or email the Lab's director Chelsea Wood at [email protected] and mention us ;)

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In this episode of Acquisitions Anonymous, hosts Michael Girdley, Bill D’Alessandro, Heather Endresen, and Mills Snell evaluate a nationwide refrigerated and dry freight trucking company with $4.7 million in EBITDA. The discussion touches on the challenges of owning a trucking business in a volatile freight industry, the risks associated with owning 35 trucks, and the pros and cons of doubling fleet size to 60 trucks. They also explore the cyclical nature of the trucking industry and whether selling trucks and focusing on freight booking could increase profitability.

Key Points Discussed:
• Asset-Heavy vs. Asset-Light: The risks of owning trucks and the benefits of shifting to a more asset-light model.
• Cyclical Industry Risks: The impact of the freight market’s cyclicality and how businesses handle booms and busts.
• Growth Through Expansion: Why expanding the fleet might not be the best strategy in a saturated market.
• Logistics and Dispatch: The role of 24/7 dispatch teams and owner-operators in managing the logistics nightmare of trucking.

Thanks to this week’s sponsor:
Acquisition Lab and their team have been longtime supporters of the pod. Acquisition Lab exists to help people buy a business and navigate all the complexities of the process, as well as provide a trusted framework, tools, and resources to support you from search to close.

If you are serious about buying a business, check out acquisitionlab.com or email the Lab's director Chelsea Wood at [email protected] and mention us ;)

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For inquiries or suggestions, email us at [email protected]

In this episode of Acquisitions Anonymous, hosts Michael Girdley and Heather Endresen evaluate a metal recycling business for sale in Pennsylvania. With $1.1 million in cash flow and $20 million in annual revenue, the conversation explores the business’s asset value, including $2 million in inventory and $2.5 million in equipment. Heather and Michael also dig into key factors like the potential impact of commodity price fluctuations, the importance of owning the real estate, and the environmental concerns tied to the business’s location.

Key Points Discussed:

- Inventory & Pricing Risk: The challenge of managing $2 million in inventory and how commodity pricing impacts profitability.

- Environmental Concerns: Why it’s critical to understand the environmental state of a property in a recycling business.

- Location Dependence: The importance of owning real estate in a business heavily tied to its physical location.

- Low Margins: How operating at a 5% net margin presents risk and the challenges of maintaining profitability in a low-margin industry.

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Thanks to this week’s sponsor:

Acquisition Lab and their team have been longtime supporters of the pod. Acquisition Lab exists to help people buy a business and navigate all the complexities of the process, as well as provide a trusted framework, tools, and resources to support you from search to close.

If you are serious about buying a business, check out acquisitionlab.com or email the Lab's director Chelsea Wood at [email protected] and mention us ;)

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• Follow us on Twitter @acquanon Learnings about small business acquisitions and operations.

For inquiries or suggestions, email us at [email protected]

In this episode of Acquisitions Anonymous, hosts Bill D’Alessandro and Michael Girdley dive into a unique opportunity: a youth residential treatment facility with a $750,000 cash flow, up for sale at $5.5 million. The conversation explores key challenges, including recruitment difficulties and staff-to-youth ratios that impact the facility’s ability to operate at full capacity. They discuss whether the rural Utah location enhances the value due to outdoor programs or limits it due to labor shortages.

Key Points Discussed:

- Staffing Challenges: How recruitment issues affect profitability and capacity in residential treatment centers.

- Real Estate Considerations: Whether the $2.7 million in real estate valuation is justified and how owning the property factors into the deal.

- Mission-Driven Work: The pros and cons of running a business that changes lives but can be emotionally taxing.

- Baumol’s Cost Disease: A deeper dive into how rising wages in one sector affect staffing costs in others.

✉️ Subscribe to our Newsletter and get more deals like this every week**: https://www.acquanon.com/newsletter

🎧 Listen to our full episodes on your favorite podcast platforms**: https://www.acquanon.com/episodes

Thanks to this week’s sponsor:

Acquisition Lab and their team have been longtime supporters of the pod. Acquisition Lab exists to help people buy a business and navigate all the complexities of the process, as well as provide a trusted framework, tools, and resources to support you from search to close.

If you are serious about buying a business, check out acquisitionlab.com or email the Lab's director Chelsea Wood at [email protected] and mention us ;)

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• Do you love Acquanon and want to see our smiling faces? Subscribe to our Youtube channel.
• Do you enjoy our content? Rate our show!
• Follow us on Twitter @acquanon Learnings about small business acquisitions and operations.

For inquiries or suggestions, email us at [email protected]

In this episode, we reviewed a $4.5M plumbing and HVAC business with a strong focus on repair and replacement services in the Northeast US. With 1.4M EBITDA and 2,500 active accounts, it has a balanced revenue stream, recurring income, and no exposure to new construction. The big question is whether the impressive 33% margins are sustainable as the business scales.

Thanks to this week's sponsor:

Acquisition Lab and their team have been longtime supporters of the pod.

Acquisition Lab exists to help people buy a business and navigate all the complexities of the process, as well as provide a trusted framework, tools, and resources to support you from search to close.

If you are serious about buying a business, check out acquisitionlab.com or email the Lab's director Chelsea Wood, [email protected] and mention us ;) 

Business At A Glance
Revenue: $4.5M (2023)
EBITDA: $1.4M
Customer Base: 2,500 active accounts
Location: Northeast US
Revenue Mix: 60% plumbing, 40% HVAC
Team: 23 employees
Focus: Repair & replacement only
What We Thought
Customer Base Questions
John raised concerns about the definition of "active" accounts. If the 2,500 accounts are truly recent, it's impressive. Otherwise, it could indicate a weaker client base than advertised.

Multi-Trade Challenges
At $4M, managing both plumbing and HVAC might hurt focus. John thinks focusing on one service would improve margins.

Northeast Market Strength
The business benefits from higher ticket prices in the region due to hydronic heating systems, but unionization could pose a challenge depending on location.

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We found an interesting deal in episode 332—a theatrical supply and construction company based in Wisconsin that’s been around since 1981. It’s a niche player in stage setup and lighting for venues like theaters, casinos, and schools. The company is projected to hit $28M in revenue for 2024 with $1.3M in EBITDA. The two brothers running it are looking to exit, though one may stay on for a transition.

Thanks to this week's sponsor:

Acquisition Lab and their team have been longtime supporters of the pod.

Acquisition Lab exists to help people buy a business and navigate all the complexities of the process, as well as provide a trusted framework, tools, and resources to support you from search to close.

If you are serious about buying a business, check out acquisitionlab.com or email the Lab's director Chelsea Wood, [email protected] and mention us ;) 

At A Glance

• Business Type: Theatrical supply and construction
• Location: Wisconsin
• Revenue: $28M (2024 projected)
• EBITDA: $1.3M (2024 projected)
• Employees: 74
• Established: 1981
• Customer Base: Theaters, casinos, schools, TV studios, and theme parks
• Owners: Two brothers, one ready to fully retire

What We Thought:

Red Flags

• Inconsistent EBITDA over the years—especially the 2020 peak during COVID.
• Margins are razor thin for a business with $28M revenue.
• Large employee headcount could be a drag on profitability.
• Owners possibly running personal expenses through the business.
• Inventory management could be difficult with old or obsolete equipment.

Green Flags

• Strong, diversified customer base, from casinos to schools and theme parks.
• The business is rebounding after COVID, with steady revenue projections.
• Potential for growth with AV companies needing high-end lighting and rigging.
• One owner is open to staying on for a smooth transition.

The Verdict

Michael likes the business and thinks it’s the right type of specialty contracting company, but there’s likely something odd under the hood. The inconsistencies in EBITDA and odd financial behavior raise red flags. Heather gives it a thumbs down, particularly from a lender's perspective, as the unpredictable margins and unclear financials would make financing a nightmare.

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In this week's episode of Acquisitions Anonymous, we’re looking at a content-based business listed on Quiet Light—a recipe site with six years of future content ready to go, pulling in over 50 million page views in the past year. Joining us today is Chelsea Wood from Acquisition Lab, who shares her expertise on the potential of this business. 

What We Thought:

Strong Metrics but Lacks Clarity on Revenue Sources

Heather pointed out the lack of clarity about how the business earns its revenue. Is it primarily through ads, affiliate marketing, or a mix of both? Since the website is recipe-focused, it’s unclear if it relies on affiliate marketing tied to ingredients or if it’s purely ad-driven. This information would significantly influence how sustainable its income is, especially in a competitive content market.

Why Sell Now?

Chelsea voiced an unusual concern—why is the owner selling if the business is so profitable? With six years of content ready and such high margins, the site could continue to generate strong earnings without much effort. The skepticism here lies in whether there’s something beneath the surface that’s motivating the sale.

Chelsea was also wary of the asking price. A nearly 5x multiple is steep for a content-based business, especially in an environment where many such businesses are struggling. That said, the evergreen nature of recipes makes it a little more reliable than other types of content, like travel blogs.

Red Flags

• Unclear Revenue Streams: We don’t have a solid breakdown of where the revenue comes from, which is crucial for evaluating long-term viability.
• Potential Personality Reliance: If the founder's identity is tied to the brand, there could be a drop in engagement after the transition.
• High Asking Multiple: At 4.91x, the multiple feels high, particularly given that content-based businesses are generally valued lower.
• Why Sell Now? The timing of the sale is suspicious, considering the potential for continued earnings.

Green Flags

• Strong Engagement Metrics: 50M page views, a 44% email open rate, and massive social media following all point to a loyal audience.
• Evergreen Content: Recipes don’t go out of style, giving the site a steady, long-term value proposition.
• Six Years of Content: With 2,000 recipes ready to publish, a new owner has a major asset in pre-produced content.
• Owner’s Low Time Commitment: The current owner only works 4-5 hours per week, making it a semi-passive income opportunity.

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In today’s episode of Acquisitions Anonymous, we take a deep dive into a unique business—a 100-year-old salad manufacturing company in Los Angeles County. Hosts Michael Girdley, Bill D'Alessandro, Mills Snell, Heather Endresen, and special guest Chelsea Wood from Acquisition Lab discuss the ins and outs of this $4.6 million deal. From potato salads to military contracts, this business has strong growth potential, but with a few possible red flags. The team explores potential buyer profiles, operational challenges, and whether this company is ready for a modern makeover.

Thanks to this week's sponsor:

Acquisition Lab and their team have been longtime supporters of the pod.

Acquisition Lab exists to help people buy a business and navigate all the complexities of the process, as well as provide a trusted framework, tools, and resources to support you from search to close.

If you are serious about buying a business, check out acquisitionlab.com or email the Lab's director Chelsea Wood, [email protected] and mention us ;) 

Key Points Discussed:

1. The Business Breakdown – Overview of the salad manufacturing company's performance, including its product mix and client base.

2. Growth Opportunities – How the business has grown from $6 million to $10.5 million in sales in four years and what potential lies ahead.

3. Operational Concerns – Challenges with scaling, customer concentration, and the company’s long-standing history.

4. The Real Estate Factor – How LA real estate could impact the business's profitability and future growth.

5. Diversification & Expansion – The possibilities of expanding the product line to healthier or more modern offerings.

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In this episode of Acquisitions Anonymous, hosts Bill D’Alessandro and Heather Endresen evaluate a private jet charter business with a $2 million EBITDA. They explore whether the company operates on an asset-light model by leasing jets or owns the aircraft, and how each model affects profitability. The discussion covers key aspects of FAA Part 135 certification, maintenance, and the growing demand for private jet services. With insights into corporate, government, and individual clientele, Bill and Heather dive deep into the complexities of the private aviation industry, including Bill's fascinating story about the origins of EBITDA.

Thanks to this week's sponsor:

CloudBookkeeping offers adaptable solutions to businesses that want to focus on growth with a “client service first” approach. They offer a full suite of accounting services, including sophisticated reporting, QuickBooks software solutions, and full-service payroll options.

Find out more at: https://cloudbookkeeping.com/

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For this episode we found a live lobster storage and seafood processing company in Nova Scotia that's up for sale. They are asking $8.9 million, and are making $55M in revenue, but it all comes with its own set of challenges. We chat about what it takes to succeed in this niche industry, and why this might be a dream deal for the right buyer (or a nightmare for others). If you're curious about the seafood business or just love interesting deals, tune in 

Thanks to this episode's sponsor:

Acquisition Lab and their team have been longtime supporters of the pod.

Acquisition Lab exists to help people buy a business and navigate all the complexities of the process, as well as provide a trusted framework, tools, and resources to support you from search to close.

If you are serious about buying a business, check out acquisitionlab.com or email the Lab's director Chelsea Wood, [email protected] and mention us ;)

Subscribe to weekly our Newsletter and get curated deals in your inbox

Advertise with us by clicking here

• Do you love Acquanon and want to see our smiling faces? Subscribe to our Youtube channel.
• Do you enjoy our content? Rate our show!
• Follow us on Twitter @acquanon Learnings about small business acquisitions and operations.

For inquiries or suggestions, email us at [email protected]