On to the next one…
I knew going in that this search journey would be a challenging one, and I’ve been fully committed from day one. Early on, I saw some promising leads, and I found myself almost hoping I might be one of the lucky ones to land a deal quickly—but that wasn’t in the cards this time around.
Southwest Florida Plumbing Company
I spent a fair amount of time pursuing a plumbing company in Southwest Florida that seemed to check all the right boxes:
EBITDA: $766k
SDE: $980k
Asking Price: $3.096M
Retiring owner
Above-average margins (thanks to higher pricing, minimal travel time for techs, and efficient processes)
No marketing in place
It really did feel almost too good to be true.
After I heard there was another offer on the table that required the seller to roll equity, I decided to skip the usual Zoom calls. Instead, I drove down to meet the seller in person. That meeting went great, and two days later, the broker told me the seller wanted to pass on the other offer because he preferred me as the buyer.
Naturally, I pulled together an LOI as quickly as possible. I offered the full asking price with 15% seller financing—contingent on 12 months of employee retention—since there was a potential risk tied to a key employee. The broker had mentioned that the seller might be open to a 10–15% note, so I thought we were in good shape.
Then…radio silence for eight days.
On the ninth day—just one day before my LOI was set to expire—the broker informed me the seller no longer wanted to hold a note of any kind and had decided to sell to the other buyer based on a full-ask offer with no seller note. While I was given the opportunity to counter, I did not want to chase the business too much and get into a pricing war with the other buyer. From what I understand, the other buyer is a private equity group with existing plumbing holdings.
I left the door open in case the chosen buyer faces closing issues or tries to retrade the deal last-minute. However, I know the seller has a hard personal deadline to sell, so there’s a chance the PE group might use that as leverage if they decide to change terms down the line and the seller might be willing to move forward anyway without starting over.
Deal Flow and Metrics
Search Totals to Date:
22 deals reviewed
1 IOI sent
2 LOIs sent
2 LOIs rejected
Throughout January, I focused my efforts primarily on home services businesses. That narrower focus meant fewer deals to review, but I’m optimistic that as 2024 continues, we’ll see an uptick in deal volume. Moving into February, I may expand my strategy a bit—possibly using platforms like Axial or starting some proprietary outreach. However, I still prefer partnering with Florida’s expansive broker community rather than competing against them.
Lesson Learned
Looking back, I think my offer for the plumbing company was on par with the competition—it had every chance of being accepted as it did of being rejected. After submitting my LOI, I took a somewhat passive stance due to other priorities. Should I have been more proactive? I don’t know if it would’ve changed the outcome, but I’d have the satisfaction of knowing I gave it everything I had.
ON TO THE NEXT ONE!
