with Quarry business · Quarry business
LenderHawk analysis. Not affiliated with or endorsed by Acquisitions Anonymous.
A quarry can look expensive on an earnings multiple but cheap on a yield basis when the land, permits, and equipment are included.
Heavy rolling stock, conveyors, and sorting equipment make quarry businesses maintenance-intensive and CapEx-heavy.
Permitted mines are hard to replicate, so scarcity can protect margins even when the underlying product is commoditized.
A 53.4% year-over-year profit jump is a warning sign for cyclicality or a one-off tailwind, not just proof of strong operations.
Quarry economics can be more local than national because trucking distance often sets the real market radius.
A buyer who understands reclamation and post-extraction land value has a big advantage in underwriting a quarry.
Debt makes this kind of business riskier because operating swings can quickly break coverage even when the asset base is strong.
The hosts compare a quarry to a land-backed asset where today’s operating cash flow is only part of the value; the remaining acreage and future redevelopment optionality matter too.
When to use: Use this lens when the operating business sits on land that may have significant alternative use after extraction or after the current business life ends.
The quarry is treated like a finite reserve of extractable tons whose value is a present-value problem rather than a conventional growth-business valuation.
When to use: Use this when evaluating mines, quarries, cemeteries, or other businesses that convert finite inventory or capacity into long-duration cash flow.
The asking price was $17 million against $2.7 million of SDE, implying about a 6.25x multiple.
The hosts anchor the listing economics with the teaser numbers from the broker.
The business reported $3.6 million in gross revenue and about $300,000 of inventory, plus roughly $6 million of equipment.
These figures were used to assess how much of the purchase price was supported by hard assets.
The quarry sits on about 68.5 acres and has an estimated 5.5 million tons of rock remaining.
The hosts use the reserve estimate to think about the site as a depleting asset.
The company has operated for 26 years and employs nine people.
The listing emphasized longevity and a small workforce as signs of process maturity.
About 10% of sales revenue comes from government contracts.
This was mentioned as a revenue mix point that could add some stability.
Net profit surged 53.44% in 2023 versus 2022.
The hosts flagged this as potentially indicating a peak year or a lumpy earnings profile.
The business is located in western Massachusetts, roughly two hours west of Boston and near Springfield.
Location mattered because trucking radius and rural siting influence quarry economics.
The hosts noted that USDA loans can go up to roughly $30 million and may fit rural, asset-heavy deals like this one.
They discussed USDA as a possible fit because the deal includes real estate and equipment in a rural setting.
Underwrite quarry deals as asset-and-permit transactions, not just cash-flow businesses.
Why: The land, reserve life, and operating permits can drive more value than the current year’s earnings.
Model maintenance and replacement CapEx aggressively before trusting SDE.
Why: Rock-processing equipment wears out quickly, so reported cash flow can overstate true distributable earnings.
Stress-test earnings against a down year, not the peak year.
Why: A 50% profit swing can turn into a debt-service problem if leverage is added on top of a cyclical business.
Hire a buy-side advisor who has bought mines or quarries before.
Why: Standard SBA acquisition playbooks do not cover the financing, permitting, and reclamation issues unique to these assets.
Treat the local trucking network as part of the moat.
Why: The quarry’s economics depend on reliable delivery relationships and the cost to move heavy material within a tight radius.
Verify post-depletion land value and reclamation cost before closing.
Why: The remaining value after the rock is exhausted can materially change the true return profile.
Heather mentioned a quarry loan that defaulted and involved special stone with a distinctive color and many uses. The details were thin, but the lesson was that even attractive stone assets can fail when CapEx and demand assumptions are wrong.
Lesson: Specialty stone does not eliminate operating risk; capital intensity and demand volatility still matter.
Michael described quarries in San Antonio that were later turned into a mall, a golf course, and a museum. The point was that depleted quarry sites can sometimes become valuable real estate once regraded or redeveloped.
Lesson: A quarry’s terminal land value can be a major part of the investment case.