Today I looked at the best deal I've analyzed yet. The first two were ok, (the most recent one was actually really bad for a laundromat). Anyway, I feel like doing these example analysis videos should help prospective buyers get a jump in the right direction when they are looking at buying a small or medium business.
Note, you can hire me for deal underwriting here, and if you want related bottom-up financial models, the crew-based services (more advanced) and junk removal service templates could be used for businesses like HVAC / repair services.
In this specific deal, the target business provided HVAC and general mechanical contracting services. They claimed to have national tenants and a solid team in place. Additionally, it was said to have limited owner reliance and could be semi-absentee acquirer. If the data and business operation details were to be substantiated, the numbers came out pretty good.
In the base case of this analysis, with 60% traditional debt and 20% seller financing, the acquisition paid itself back within two years and pushed a 5-year equity multiple, including terminal value, of 7x (assuming the same exit multiple as entry).
The positives included some licenses and regulatory things that were already in place to make growth in other states smoother and a team that appeared to be self-reliant. Again, I would want to substantiate all the claims. The seller is going to try and embellish and make the business look as attractive as possible.
In my opinion, a buyer looking for steady income and not much hands-on activity could thrive hear. At the same time, an operator focused buyer that wanted to grow could use this as a solid foundation with profits that can be re-invested.
Note, I have no relationships with any of the sellers, brokers, banks, or anybody else. This is my own independent analysis.
