2024.10.13 - Online Biz Acquisition Opps

Hey hey peeps, happy Sunday evening.

I have just gotten back to my home office in Florida where I’ll be for a few months. I am excited to get into aggressively trying to grow the accounting CPE business I acquired in August and my other businesses. And maybe buying another online business.

While I do work remote, it is very hard to get deep work done when I am not at my home office and consumed with mountain biking and running everyday. Truth be told, I didn’t want to acquire this business in August, but the deal checked all my boxes and I would’ve been disappointed to let the business pass.

On that note, I’ll be more consistent in reviewing business listings and sending out the Acumen Wire newsletter. We’ve got 3 deals in this newsletter.

// SaaS for Marketing & Cold Email | 4.0x Multiple

// ESG Compliance SaaS | 3.5x Multiple

// Advanced Coating Solutions Ecommerce w Patents | 2.7x Multiple

🔫 Gun to my head question:

If I had to write a check for one of the businesses in this email, with no other details which one would it be?

Regarding the Advanced Coating Solutions Ecommerce; it seems like a very good business at a good price but I really don’t want to deal b2b product sales which I think is a necessary nor deal with physical products.

Regarding the SaaS for Marketing & Cold Email; I’m personally not a fan of marketing tools as they seem to be least sticky of all SaaS with competitors constantly popping up and offering a shinier object (although I have been a customer of many marketing tools for nearly a decade now).

I would write the check the ESG Compliance SaaS. A b2b SaaS is sticky and it’s in a growing market that I think will have further mandatory compliance.

// SaaS for Marketing & Cold Email | 4.0x Multiple

💰 Asking Price: $2,200,000
📊 Gross Revenue: $1,200,000
💼 Cash Flow: $550,000
📅 Established: 2021

Overview:
This SaaS business specializes in marketing and cold email solutions, with a notable ARR of $1.2M and steady growth. Catering primarily to digital agencies and consulting companies, the platform helps users enhance their campaigns and conduct customized outreach based on up-to-date advertiser data. A small team of developers and sales personnel provides customer support and acquisition, while a combination of Facebook ads, email marketing, and affiliate channels drive growth. With competitors like SEMRush, it’s crucial to explore this tool’s differentiators, particularly around data accuracy and unique engagement features.

Highlights:

• Growing Revenue: Consistent year-over-year sales increase, supported by both standard and premium packages.

• Dedicated Team: Includes two developers and a sales team handling client acquisition and support.

• Engagement Channels: Uses paid ads, email marketing, and affiliates to attract and retain users.

• Large Data Asset: A database of 300,000 Google advertisers with contact data provides a valuable user acquisition asset.

Questions:

❓ What unique features or data accuracy elements set this tool apart from competitors in the crowded marketing tools space?
❓ How engaged are current users, and what are the retention rates for both standard and premium clients?
❓ What licensing or expansion opportunities exist, particularly for international or white-label markets?

View Listing

// ESG Compliance SaaS | 3.5x Multiple

💰 Asking Price: $261,310
📊 Average Monthly Revenue: $10,018
💼 Average Monthly Profit: $6,222
📅 Established: February 2020

Overview:
This B2B SaaS business offers a solution for verifying ESG (Environmental, Social, Governance) claims, positioning it in a growing market as ESG standards gain traction. The company employs a free trial sales model, a strong approach in SaaS, to convert leads to paying customers. Notably, the business has a co-branded product with a popular review platform, which generates 35% of its revenue through a 50% revenue-sharing arrangement. While this partnership adds a valuable growth channel, potential buyers should consider the balance between growth and customer acquisition dependency on this co-branded partnership.

Highlights:

• Emerging Market: ESG compliance is a growing field with increasing demand from businesses.

• Proven Sales Model: Free trial process supports effective conversion in SaaS.

• Growth Channel: Co-branded partnership with a review platform, accounting for 35% of revenue, could offer scalable customer acquisition.

Questions:

❓ How dependent is the business on the co-branded partnership for customer acquisition, and what are the terms of the revenue-sharing model?
❓ Are there opportunities to diversify customer acquisition channels beyond the co-branded platform?
❓ What are the user engagement metrics and renewal rates among trial and paying customers?

View Listing

// Advanced Coating Solutions Ecommerce | 24 Years in Business | 2.7x Multiple

💰 Asking Price: $1,200,000
📊 Gross Revenue: $1,357,170
💼 Cash Flow: $449,041
📅 Established: 2000

Overview:
This established advanced coatings business serves weaponry, automotive, marine, and industrial sectors, offering proprietary and patented products. Operating for 24 years, it stands out for its 90% proprietary product lineup and strong client loyalty, with transactions ranging up to $75,000 through a dealer network and eCommerce platform. While the company maintains healthy 24.9% margins, further clarity on inventory and production space would be useful for a potential buyer. Buyers with experience in industrial product sales could leverage the four patents to drive growth.

Highlights:

• Proprietary Product Line: Patents add defensibility and significant value to the brand.

• Dealer Network: Dealer transactions up to $75K suggest potential customer concentration but also strong sales channels.

• Healthy Margins: Operating with a 24.9% margin, positioning it well for steady cash flow.

• Established Market Presence: 24 years in business with a loyal client base spanning multiple sectors.

Questions:

❓ What are the details of production or inventory management? Is there a need for warehousing?
❓ What is the breakdown between retail and dealer sales, and does any customer concentration risk exist?
❓ Which growth path—retail or wholesale—would yield the best returns, given the established dealer relationships?

View Listing