Molson Hart

We submitted an LOI to purchase a small local plumbing business. Fingers crossed that the deal goes our way. I’ll share details relating to the potential purchase in this thread.

The plumbing biz has been in business in our city for more than 50 years (across a few owners) and my dad and I are gonna try our hand to see if we can grow this thing.

$1.6mm in revenue, ~$300k annual income, and $1.2mm purchase price. We are going to use a combination of SBA note, seller financing, and our own cash. SBA will give us up to 90% LTV!!

Our plan is for dad to run the day to day after retiring from his day job. There will be other licensed plumbers on staff, but he’s looking forward to getting his license.

Our likes: - Seller has been lazy (his words) in his age and hasn’t spent time growing the biz, he’s in his late 70’s. There’s 5 trucks, but only 4 active crews, so we can go to work immediately. - Seller is very well known/ liked in the plumbing community and can help us find

Other purchase opportunities down the road - Seller is on month to month lease, so we will look to acquire some RE ASAP Negatives: - Expensive at 4x, and the seller wasn’t interested in as much of a seller note as we would have liked. - Dad won’t be able to retire by

Closing date, so we will have to find a work around with the existing seller.

After loan costs there’s only enough for dad to make a small salary and cash on the balance sheet. BUT, if we can find another with a similar size or situation, we are in a tremendous position to bolt on. Ideally we add horizontally (electric/hvac) or vertically (plumbing)