with Spinball Sports · Spinball Sports
LenderHawk analysis. Not affiliated with or endorsed by Acquisitions Anonymous.
Acquire a niche sports-equipment manufacturer with brand recognition, patent protection, and potential to layer in recurring revenue or subscription data services on top of hardware sales.
A seller-led product business can be attractive when the owner wants out of operations but is willing to stay for training.
A hardware company with connected functionality may be a better candidate for subscription packaging than a pure one-time-sale model.
Patents matter only if they actually block copycats and survive technical scrutiny; they are not a substitute for diligence.
A business in a niche sport can look robust if its customers are pro teams and schools, but the buyer still has to verify actual product performance.
The real estate being included can materially change the economics, but only after the property is properly valued.
A buyer who knows the sport or vertical may have a much better shot at underwriting and operating the business than a generalist.
A geographically isolated industrial asset may be movable, but the operational transition still needs careful planning.
Molson’s idea was to convert a one-time hardware purchase into recurring revenue by charging upfront for the machine and then layering a monthly subscription for connectivity, data, coaching, or replay content.
When to use: Use this when a physical product already has digital connectivity and repeat usage that could support recurring monetization.
Bill’s shorthand for using a light pre-LOI screen to decide whether to make an offer, then a deeper diligence process to confirm what the seller claimed.
When to use: Use this when comparing early-stage screening to full diligence in a repeat-buying process.
Spinball Sports was asking $3.9 million for $2.6 million of revenue and about $600,000 of SDE, implying roughly a 6.5x SDE multiple.
Bill walks through the BizBuySell teaser for the pitching-machine company.
The company said it had about $400,000 of EBITDA after owner salary and rent, versus $600,000 before those adjustments.
The hosts parse the listing’s earnings presentation.
Spinball claimed 23 MLB teams as customers, plus dozens of NCAA teams and hundreds of high schools.
Used to support the idea that the product has real niche credibility.
The two-wheel machine was priced around $1,700 and could pitch up to 100 miles per hour, while the three-wheel model was priced around $3,000.
Bill describes the product lineup and pricing tiers.
The real estate included with Spinball was described as an 8,000-square-foot steel building on three and a half acres in Mount Vernon, Illinois.
The hosts note that property ownership changes the valuation calculus.
The firearms retailer was asking $9.7 million against about $2 million of EBITDA on $7.5 million of revenue.
Bill summarizes the second listing’s headline economics.
That firearms business had about $1.5 million of inventory not included in the asking price.
This is highlighted as a separate capital consideration for a buyer.
The firearms retailer reported growth from about $1.4 million in 2018 to $4.4 million in 2020, with trailing twelve-month revenue around $6 million by early 2021.
Molson cites the broker’s follow-up numbers to show the COVID bump.
Molson said the firearms industry’s monthly sales roughly doubled from about 1 million in 2019 to about 2 million in 2020.
He uses this to explain how unusual the industry’s demand spike was.
The firearms retailer carried around 400 SKUs and had only three employees.
The hosts note how lean the operation appears despite the catalog breadth.
Treat a connected hardware product as a possible subscription business, not just a machine sale.
Why: Recurring software or data fees can dramatically expand the exit universe and valuation.
Verify the technical moat with actual users, not just the listing copy.
Why: A niche product can look defensible in theory while failing in real-world performance.
Appraise included real estate separately before assuming it lowers the effective multiple.
Why: Property value can materially change the economics of the acquisition.
Underwrite cyclical industries with very little debt.
Why: Firearms demand can swing sharply with election cycles and panic buying.
Focus on vendor concentration and brand relationships when buying a retailer.
Why: Retailers can lose margin or supply if key manufacturers change distribution terms.
If you lack domain expertise, find a buyer/operator who actually knows the vertical.
Why: Molson repeatedly notes that baseball knowledge or firearms knowledge would change the buyer’s odds materially.
Bill recounts how a leveraged sporting-goods chain with a large firearms business went bankrupt after the political cycle turned against its assumptions. The lesson was that firearms demand can be brutally cyclical and can destroy overlevered operators even when the category looks strong.
Lesson: Avoid heavy leverage in politically sensitive, cyclical retail categories.
Molson describes the Amazon-aggregator model as a collection of disparate brands that can be rolled up for multiple arbitrage, but not necessarily integrated into a coherent operating system. He argues that the company’s eventual SPAC path fit a business whose real asset was financial engineering rather than operational synergy.
Lesson: Buying EBITDA at scale only works if the combined platform creates real operating advantages.
The hosts speculate that the owner may be a product obsessive rather than a business-builder, which could make the company unusually attractive to an operator buyer. They also suggest the business could be more valuable if the product were converted into a recurring-service model.
Lesson: A founder’s desire to stop operating can be a feature, not a bug, when the business itself is solid and the buyer can add systems.