Is the septic industry ripe for roll up?

December 19, 2024

by a searcher from Miami University of Ohio in Chicago, IL, USA

I'm currently searching for a septic / plumbing business in the midwest. The septic industry seems incredibly fragmented. There aren't many large players in any individual market, and there doesn't seem to be many companies that operate in multiple markets. Maybe the TAM is too small? Or the ROA isn't inviting?

Has anyone pursued this thesis or seen it executed? Would love to connect!

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Reply by a lender
in Falmouth, MA, USA

Jack, I recently spoke with searchers who are exploring opportunities in the septic industry, specifically in pumping and inspections. A key focus should be on areas with newer developments where regulations require regular septic inspections for nitrogen compliance. These areas can present consistent demand and strong growth potential. It’s worth noting that septic inspections are distinct from pumping, but septic pumping could serve as a vertical integration strategy. Feel free to reach out: redacted Let me know if you’d like to explore this further.

Reply by a searcher
from University of Kansas in Hanover, NH, USA

I've looked at the industry pretty closely. For pumping, the main barriers are capex (new trucks are 200k+) and finding a supply of CDL drivers willing to smell crap all day. When the broader trucking (CDL) industry is doing well, it can be very hard to recruit and keep drivers. But if you solve for those pain points, the other industry characteristics are very nice. Recurring revenue, outside home service, necessary expense, fragmented and non-digital enabled older owners, gateway to high ticket system replacement. Feel free to reach out with other questions.

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