Pre-LOI Evaluation: Tree Service & Heavy Equip. Rental
September 27, 2021
by a searcher from Syracuse University - The Martin J. Whitman School of Management in Seattle, WA, USA
Hello everyone,
We're in the pre-LOI stage considering two interesting targets in the Pacific Northwest: (1) tree service and (2) heavy equipment rental.
I'm wondering if anyone has interest or experience trading in these industries and would be open to a brief phone call to exchange notes.
Feel free to email me directly at redacted or message below and I'll reach out. Thanks!
from University of Texas at Austin in Lexington, KY, USA
1) New Equipment - are the OEMs able to keep up production to meet demand? If not, what is this doing to buying price at the dealer? That is, if you can get a piece of machinery at all. In our industry, lead time in a normal market is 2-3 months if you want a custom build/spec with plenty of pre-built trucks available at the local dealers. Today, if I placed an order I’d be lucky to take delivery next summer. Also, seeing prices up 20-30% on a the few new units that you can find compared to pre-COVID (pushing $200k for a new truck now) An easy check for this is just to drive by a couple of dealers and see if their yard is full of new or if they have equipment strategically spread out to look full.
2) Used Equipment - if you face the same shortages on new equipment that we do, take a look at the used market and see how prices have increased. We are seeing prices also up as much as 50% from normal because that’s all that is available. People are selling trucks they bought 18 months ago with###-###-#### miles for right at or more than they paid originally.
3) Parts - this is also a big issue today, particularly when it relates to the engine system. With all the technology in equipment, one sensor goes bad and the machine is shut down until you find a replacement. Maybe the dealer has it but just today I heard a dealer tell a guy his was on 70 day back order. It’s really hard to find parts when it comes to emissions systems but I don’t think you have to worry about that on heavy equipment.
Now how you factor this into your CapEx and Repair expense projections, no idea. I’m expecting the price of parts continue to increase as the global supply chain continues to be in a mess.
in San Francisco, CA, USA
, we offer deals evaluation for Pre- LOI stages at cost effective prices :http://vasl.team/searchers-space/search-funders/?submissionGuid=e6be10e6-2d23-482d-a206-bb0571b6c1b4 Please let me know if you are interested to partner with us :)