Deal screen: $430k asking price on $70k SDE. Would you pass?
I ran this Warren County, NJ pool contractor listing through AcquisitionIQ, a deal-screening tool I built.
Screening result: AVOID (35/100).
Asking price: $430,000
Listed SDE: $70,000
Modeled valuation: $105,000 to $140,000
Modeled DSCR: -0.09
At $70,000 of listed SDE, the business doesn't appear to support both a full-time operator and acquisition debt. Under the model's $75,000 replacement-operator assumption, cash flow is already negative before debt service even starts. Asking price is also about 6.1x listed SDE.
The listing also claims more than 1,400 active residential accounts. That's worth digging into, but the seller would need to reconcile that account base with only $70,000 of reported SDE and show where normalized cash flow actually improves.
This is a verdict on the deal at this price, not the business. Three revenue channels and staff in place are real assets; the price is the problem.
The tool only extracts the figures. Valuation, debt-service test, red flags, and the 0 to 100 score are calculated deterministically. Every score component is traceable.
Would you pass at this price, or is the service-account base enough to keep digging?
Happy to run another public listing as a sanity check:
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Listing: redacted
Figures as represented in the public listing, capturedredactedNot independently verified. First-pass screen, not final due diligence, an appraisal, or financial advice.redacted