May 2024 Update: The Discipline of Doing Nothing

A great benefit of examining twenty-five businesses in one month is discovering unique enterprises that exist around you, often unnoticed.

For instance, one family is selling a business that manufactures industrial-grade toilet seat wall fasteners. Their product ensures public toilets remain securely attached to walls. Remarkably, there are many millions in this niche market.

Another intriguing business we encountered is one that handles art installations for commercial builders. This company is responsible for the cohesive wall decor you see in hotel lobbies. Beyond its creative appeal, the business is thriving as companies reconfigure their offices for a post-COVID world, driving demand for new art installations.

May was indeed a busy month!

Despite the fascinating stories, our decisions ultimately hinge on the numbers. The average multiple asked across these opportunities was 4.99x EBITDA. In the four competitive offers we submitted, we identified unique competitive edges. The most competitive deal involved a $2 million medical billing company. We were one of twenty-nine to submit offers, with ours at 4.5x EBITDA, while the highest offer exceeded 6x.

2 for the Road

We are actively pursuing two deals:

1. Pat Healy Company:

   • Business Focus: Provides medical hardware for patients with neurological disorders.

   • Update: The seller has agreed to increase their seller note, but we are still about five points away on the valuation.

2. Serenity Now Therapy:

   • Business Focus: A telehealth organization providing counseling to patients experiencing mental trauma.

   • Update: Founded as a telehealth-first organization, the owner is motivated to sell due to starting a family. The FCF/Sales ratio is 41%, with immediate opportunities to increase this through enhanced sales, marketing, and clinical efficiencies. Future plans include expanding operations into other states.

Our goal for this month is to secure an accepted LOI and enter due diligence.

Thank you for your continued support. Please feel free to reach out to me anytime.

Stay well,

Christien Louviere
CEO