Welcome to The Business Buying Academy with Sieva Kozinsky. Here's what we have in store for you today:
Do you run multiple businesses? As you know, I do...which means I have too many bank accounts we need to check every day. Before I started using Vesto, it was a headache for my team to check those accounts daily.
Vesto made it easy to connect all of our banks into one simple dashboard. With real-time balances, transactions, and cash flow monitoring β we went from 50 account logins to one.
For any company managing multiple banks, Vesto is a no-brainer.
βCheck out Vesto hereβ
(Vesto is sponsoring today's newsletter, thank you)
Private equity loves the HVAC business.
Two years ago, Blackstone finalized a $14 billion acquisition of an HVAC business.
And that's not the first big PE acquisitions of an HVAC business over the last few years. The industry has been on fire. Here are a few other notable deals:
Why does PE love HVAC so much? Here are a few reasons:
In short, HVAC is a safe, stable industry with thousands of acquisition targets. It's become cliche on X at this point, but private equity is modernizing the industry by adding software to scale old-school businesses,
But not all HVAC is created equal. Apex, mentioned above, focuses on commercials. By having a nationwide network of commercial only HVAC companies, they can also have nationwide selling teams who can serve big accounts. A company like Car Max, Costco, of Safeway doesn't want to deal with dozens of small groups. They may prefer locking in one discounted and reliable service with Apex.
Other PE players prefer residential HVAC because you can sell yearly maintenance memberships, and upsell new units at higher margins to a less sophisticated consumer.
What are some of the downsides?
My friend Chris (who runs a 9-figure home service business and will be speaking at our annual summit in May), mentioned this deal that is going bankrupt...one PE shop paid 20x EBITDA...and lost hundreds of millions.
To stay on the safe side of history, if you're a newer buyer, the key lessons in this sector are:
π He's sold 3 companies (and rolled up schools)
Last week I talked to a guy who has a unique approach to business building.
Esteban Reyes is both a successful entrepreneur, and investors.
Esteban goes deep on a roll-up of Montessori schools. He shares specific details of how the deal was capitalized, and the incredible success they created through this strategy. I HIGHLY recommend you listen to this one.
βWatch it hereβ
βListen on Spotifyβ
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π Reader feedback
This week I decided to hold off on my weekly "interesting deal". If you're getting value from these, send me an email to let me know and maybe I'll bring it back in the coming weeks! (you can just reply to this email, I read all the replies).
Have a great week,
Sieva
P.S. - Are you hiring? Get started with top global talent from Somewhere (I'm a customer and investor)
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Disclaimer: nothing here is investment advice. Please do your own research. The information above is just for information and learning.
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