DEAL PARTNER: Equipment Rental Market

June 22, 2023

by a searcher from Brigham Young University in Dallas, TX, USA

Hi all,

Wanted to send out some feelers to see if anyone has experience in the equipment rental market as I have a potential deal in the earliest stages and am open to partnering with someone on it. ~$2M of EBITDA, owner-operated, owner would manage post close. Proprietary deal through personal network.

What am I looking for in a partner? Someone who has previous knowledge and experience in this market to decrease the amount of time to do diligence, find appropriate lenders, etc. Not required to have extensive prior deal experience. Open to someone with operational expertise.

Best,
Garrett S

Reply by an investor
from The University of Chicago in Chicago, IL, USA

With equipment rental, it is important to understand that CAPEX is a real thing. Make sure your valuation works from an EBIT perspective. Also, avoid equipment leasing companies; equipment dealers with rent-to-own programs; and heavy iron long-term rental companies. The attractive margins are made in short term (often daily), high turn equipment rental.

Reply by a searcher
from Brigham Young University in Dallas, TX, USA

Thanks Adam and Walt. I reached out over DMs. Could be an interesting one and will keep the Searchfunder community updated as we progress on the deal.

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