Transportation Volatility /First Deal

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by a searcher
in Alba, TX 75410, USA

2yrs ago

Transportation Volatility /First Deal

So I have a Perplexing question for my first post,?!! Given the current volatility of the Transportation sector in whole, From being in the industry for many years I see Heavy Haul tow truck and Fleet Services a growing sector. Because this is my first deal, I lack the experience and thus does my board for doing deals . I'm trying to play it safe and keep it from 800k To 1 million Could I get please get some feedback on the Heavy Haul Tow truck and Fleet Services sector and feedback on if trying to keep my first deal to the 800k to 1 million is a good safe place to start ??
Thanks
Edmond

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reply by a searcher 2yrs ago
from Bowling Green State University in Surrey, BC, Canada

So, really, it's transportation adjacent. In a downturn you may see customer volumes decrease (let's goods being shipped) and maybe see an increase of used vehicles hit the resale market. As a heavy tow and service shop, you may feel some of that; or, you'll see folks riding out their trucks and breaking down more bringing you *more* business.
In any case, it's probably tough to build much goodwill in this space. Be careful with the condition of tows you're buying and understand the customer-base. Remember to model capex and maintenance into your projections.
I'm guessing fairly competitive space, but value goes to a) response times and b) reliable fleet service - so, need a strong shop function. And fragmented with low barriers to entry, so lots of folks coming in on a wish and a truck.
I've seen this business type work well - had a few really good service contracts that kept the shop busy. And shipping container repairs can add a bit of a nice income stream. Good luck!

reply by a searcher 2yrs ago
from University of Michigan in Detroit, MI, USA

^redacted‌ appreciate the tag and kind words as always! ^redacted‌ if you are talking 800 k + in EBITDA then I'd say it is a good starting point. With that said there are lot of factors at play when looking at companies so if you want to discuss further feel free to DM me.