March 2020



Featured Clients this issue:
**Details of each client below article
– Recurring Revenue – Servicing Restaurant Equipment #0620
– Full-Service Auto Repair Business #520
– High Recurring Income Fitness Gym, Semi-Absentee #1619


   Transaction Metrics

As a member of several M&A industry associations, our firm receives a fair amount of industry information relating to transaction data.  This month’s article, which was compiled by Scott Densmore, one of our experienced Brokers, highlights some of the 2019 Q4 information, as reported in the Fourth Quarter 2019 Market Pulse Survey. Below are two significant items of interest:

It is still a Sellers’ Market in most segments.  The recent lowering of interest rates may prompt some buyers to take advantage of the lower rates to capture higher a cash flow and obtain better rates of return on their investment.

The length of time that it takes to close a transaction, particularly on smaller transactions, has increased significantly.  We attribute this increase to more stringent due diligence by buyers and the increased usage of SBA funding on smaller transactions.  Having accurate and timely financial data can significantly help streamline the closing process.

The majority of our business is derived from referrals. Please consider referring our services if you encounter a situation involving the potential purchase or sale of a business.

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Ronald V. Chernak


Inspiring business relationships since 1982!

Market Snapshot Q4 2019

There seems to be a lot of uncertainty and pessimism going around, but one place where we can currently find a generally positive outlook is the business sales market. Currently, multiples of earnings are at or near peak levels. Also, advisors on the front lines are expecting to see greater deal flow and better closing rates as we proceed with 2020.

While sentiments are high, the time that it takes the average business to get to the closing table has also increased. As you can see in the chart below, time to close can be significantly affected by the due diligence process that takes place from LOI to close.

Deals under $500,000 saw the largest increase in time to close. One factor that could contribute to this is that arranging financing for acquisitions of this size has been increasingly difficult to obtain. It appears there is more than enough money available for acquisitions, but the relatively small size of these transactions may not be providing the proper incentives for bankers and investors.

Even with a small correction on the upper end when compared to last year’s numbers, the good news is that we are still solidly in a seller’s market for most market segments.

A breakdown of sales by industry shows that Restaurants and Personal Services are leading the Main Street Market (>$2M transactions size) and that Manufacturing and Construction are leading the Lower Middle Market ($2M – $50M transaction size).

Confidence in these above-mentioned industries appears to be an indicator of a generally optimistic outlook for progress and growth in 2020. Market conditions are constantly changing and there may be local nuances that may affect your specific business. If you have questions about your industry and size of business, call The FBB Group, Ltd. to speak with a Business Intermediary. Initial consultations are confidential, no cost and no obligation.
Published by The M&A Source


Recurring Revenue Servicing Restaurant Equipment #0620

This Metro Denver company provides services for restaurant commercial equipment, including refrigeration, Hot Side equipment, HVAC, Hood and MUA, along with plumbing and electrical services. The company does only commercial service and maintenance work, which provides consistent recurring revenue. There is a diversified customer base with over 280 clients. Gross Revenues and Seller’s Discretionary Earnings have more than doubled over the past five years, and they continue to grow.  The company should appeal to: 1) a buyer already in the construction industry; 2) a buyer in a related field, such as plumbing, HVAC, or electrical contracting; or 3) an experienced business person. No construction-related licenses are required.
  • Purchase Price…$540,000
  • Down Payment…$140,000
  • Gross Sales…$1,698,331
  • SDE…$278,683
For more information contact Ron Brasch,


Full-Service Auto Repair Business #0520


This automotive repair business has been built on quality, integrity and honesty.  These fundamental values flow through to every aspect of the business.  88% of their revenue is from repeat business, their equipment is of superior quality, and they receive preferential service from their vendors.  There is excess capacity and multiple opportunities have been identified to take this business to the next level.  An excellent location gives access to a large customer pool and is in proximity to many specialty automotive businesses for referral sources.
  • Purchase Price…$465,000
  • Down Payment…$96,000
  • Gross Sales…$590,000
  • SDE…$184,000
For more information contact Gary Curran,



High Recurring Income Fitness Gym, Semi-Absentee #1619


This is one of the top and best fitness franchises in the nation.   As a well-known brand, this location continues to grow as word of mouth spreads and online reputation increases daily with exceptional customer reviews.   Active memberships grow steadily year-over-year and net cashflow to the owner has increased over 30% this past year.   The owner has put trained managers in place to run the day-to-day operations.   This is an ideal opportunity for a buyer with fitness industry experience looked for a Colorado location or an individual buyer looking to own their first gym in an area of town that continues to attract health conscience families.   Both the gym and real estate are available for sale making this a rare opportunity in the fitness industry.   The buyer will receive hands-on training from both the owner and the franchisor.   Based on its strong financials, this franchise has also been pre-qualified by multiple SBA lenders allowing nearly $350K+ of cashflow for only $170K down payment (assuming the buyer qualifies).
  • Purchase Price…$1,095,000
  • Down Payment…$170,000
  • Gross Sales…$842,841
  • SDE…$341,484
For more information contact Rob Amerine,


**Terms & Definitions
TBS (To be suggested by Purchaser) – Seller, in his/her sole discretion, has the right to accept or reject all offers.
Seller’s Discretionary Earnings (SDE): A term used to denote a business’s cash flow or the amount of pretax money a buyer can expect to earn in first-year operations.
EBITDA (Earnings Before Interest, Taxes, Depreciation & Amortization): All interest, tax, depreciation and amortization entries in the Income Statement are reversed out from the bottom line Net Income (It purports to measure cash earnings without accrual accounting, canceling tax-jurisdiction effects, and canceling the effects of different capital structures.)
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