The Silver Tsunami Surges

How We Sourced It

This deal hit the market in February of this year. I actually first heard about from one of my followers on X. He sent it over and said look at this deal online. Looks like it’s for sale in Colorado. I reached out to the broker and found out it was right here in Grand Junction where we operate. One of our smaller competitors decided it was time to retire. This was just a listing on BizBuySell just like our first acquisition.

Our Offer

They did $250k in revenue last year and had cash flow of $136k. Asking price? A whopping $550,000. In general, we aim to keep our acquisitions around 1x revenue but have some wiggle room depending on quality of revenue, location, and assets that come with the business.

Our last two acquisitions were:

1.1x revenue – no vehicles included

1.2x revenue – 1.1x revenue subtracting vehicles

This company had a termite license that at that time we did not carry ourselves. That’s what initially made this worth pursuing.

Initially, we made two offers.

1- $250k cash and a 30 day close.

2- $100k down, $250k seller financed at 8% for 5 years

They rejected both. No counteroffer. To be quite honest, I was pissed. That was a fair offer, we know all of our competitors really well and this company isn’t worth more than $250k. We were throwing them a bone with the second offer and that’s only because we included the sellers termite license on our books for three years.

The broker said that wouldn’t do it, they had other interested parties, and they were going to go another direction. That was fine with me. I felt that one of three things would happen. 1- They would either sell to a larger competitor for the full $550k and that would cause them to suffer, 2- they would sell to a searcher or someone new to the industry and the debt would crush them with so little cashflow, or 3- they would come back to us with more reasonable terms.

In September, the broker emailed me and wanted to know if we could come to an agreement. We met in person, chopped it up and settled on $390k with $100k down and the rest seller financed over 5 years at 8%.

The company came with a 2019 Tacoma and a 2007 Tundra. (If you haven’t checked the market on low mileage Tundra’s these things are insane. It’s blue and we don’t need it. Seller said it was worth $11k. We put it on Facebook for $17k and sold it the same day.)

We closed on 10/13. Total timeline was about 9 months even though 7.5 months went with no contact. The seller had other offers. Ultimately, they sold to us for several reasons. We are experienced. We are local. We do not bad mouth our competitors. We perform high quality work.

After all was said and done, here’s how it stacked up to our other purchases:

1.56x revenue – 1.39x after subtracting vehicles

We overpaid a little bit here but we felt confident we could make a deal work since we had just acquired another local firm last month and we are really getting into the territory of definitive #1 company in the area.

Drama

So, I promised some drama right. Our number one local competitor has been a thorn in our side ever since we got started. He has called us and harassed us on the phone. He has preached to his team terrible and untrue things about how we run business (I know this because we later hired one of their employees). He has his employees, friends and family leave bad reviews on Google. He is self-centered and arrogant. His fury towards us has backfired in many ways. Along with the fact that we went to work every single morning our first two years in business with a fire inside of us to take his market share, he has also burned bridges with every other local company because he treats us all the same.

He reached out to this company to make an offer. He berated the broker for not getting him numbers immediately then attempted bypass the broker entirely. Ultimately, he made an offer over asking and was rejected. The seller said he could have offered one million dollars, and he would have told him to kick rocks.

This guy’s right-hand man managed his business for 8 years. He was also one to leave us bad reviews. He has since gone his own way and started his own company in town. He also made an offer on the target business. His offer was not very good but his mere ties to the former company kept his offer from even being responded to. To add salt to the wound, he called our number a few days after closing, I assume to smooze the sellers a bit more and was surprised to hear me answer the phone. We chatted for a bit, and we listened to all of the air come out of his voice as we let him know we had taken the reigns.

We have had a “more friends than enemies” approach since we started. We refer a lot of work back and forth to other companies. Our market has 200k people living here. Makes more sense to be a good guy. Due to this, we have good relationships with two other firms and have some verbal agreement in place to buy them out whenever they are ready to be done.

If you have termites in Western Colorado there are 7 phone numbers, you can call to get them treated. I own three of them. If a customer disregards reviews and everything else online and dials a number at random, there’s almost a 50% chance my phone rings. We’re not just the new kids on the block anymore, we own it.

So What’s Next?

We have doubled revenue every year so far. We have some debt on the books. We have had margins around 25% but we could realistically see 40% if we pumped the brakes. We have plans to double revenue again this year.

We’ve got $2.25 million in revenue sitting on the books for 2026 and that’s before growth, one times, wildlife, bed bugs, termites etc. Hoping our team can service $4 million in revenue next year with margins in the ballpark of 20%.

Thanks for reading! Let me know if you have any questions or want to connect.