Acquiring MindsOctober 2, 2023

Buy and 3x a Project-Based Business in Just 2 Years

with Johannes Hock · DFW Turf Solutions

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LenderHawk analysis. Not affiliated with or endorsed by Acquiring Minds.

The Deal

Business

DFW Turf Solutions

Industry

project-based business, turf/lawn care

State

Multiple (EBITDA)

3.0x

Year

2021

Revenue at Purchase

$5.0M

LTV at Close

90%

Deal Source

bizbuysell

Financing Structure

SBA 7(a)

Seller Note

Buyer Equity

Strategic Rationale

Capitalize on high-growth industry tailwinds in Texas via an established player with management.

Post-Acquisition Performance

Tripled revenue in two years to ~$17.5M; expanded to a second location in Austin.

Key Takeaways

1Recurring revenue is overrated as a selection criterion; project-based businesses in growth industries can be lower-risk than recurring revenue in declining industries
2Industry tailwinds and market growth are underweighted criteria; a rising tide provides room for error and allows capturing growth without fighting for market share
3Speed of decision-making matters psychologically; compressed search timelines with high deal flow early prevents decision fatigue and emotional compromise that emerges after prolonged searching
4Entry multiples within a tight band matter less than speed to deployment because small business cash flows meaningfully reduce effective purchase multiples within one to two years
5Having a general manager in place allows working on the business rather than in the business, enabling strategic focus on growth channels like SEO and marketing rather than daily operations

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The Deal

Business

DFW Turf Solutions

Industry

project-based business, turf/lawn care

State

Multiple (EBITDA)

3.0x

Year

2021

Revenue at Purchase

$5.0M

LTV at Close

90%

Deal Source

bizbuysell

Financing Structure

SBA 7(a)

Seller Note

Buyer Equity

Strategic Rationale

Capitalize on high-growth industry tailwinds in Texas via an established player with management.

Post-Acquisition Performance

Tripled revenue in two years to ~$17.5M; expanded to a second location in Austin.

Key Takeaways

1Recurring revenue is overrated as a selection criterion; project-based businesses in growth industries can be lower-risk than recurring revenue in declining industries

2Industry tailwinds and market growth are underweighted criteria; a rising tide provides room for error and allows capturing growth without fighting for market share

3Speed of decision-making matters psychologically; compressed search timelines with high deal flow early prevents decision fatigue and emotional compromise that emerges after prolonged searching

4Entry multiples within a tight band matter less than speed to deployment because small business cash flows meaningfully reduce effective purchase multiples within one to two years

5Having a general manager in place allows working on the business rather than in the business, enabling strategic focus on growth channels like SEO and marketing rather than daily operations