Infrastructure services deal in good geo, ~$2.0M equity left

April 29, 2021

by a searcher from Stanford University - Graduate School of Business in Dallas, TX, USA

Hi All -

Am looking at a deal under LOI via a friend with specs as follows. Email me at redacted if you are interested in learning more and participating and I will introduce you.

$3.5M equity check. $2.2M left. I will likely invest.
Searcher has to make a $200k down payment on 5/7 to keep exclusivity (time sensitive)

Overview:
Civil construction and infrastructure company providing water pipe, sewer, and street reconstruction projects for residential and municipal clients in good Rockies geography
- Benefits from increase in infrastructure spend and a low interest rate environment
In 2020, the company generated $18.4M in revenues and $2.0M in EBITDA with $9.1M in assets.
In 2021, the company is on track to generate $23.2M in revenues and $2.6M in EBITDA.
The purchase price is for $10.5M with $5.0M in debt financing, seller financing of 2.75M, and $3.48M in Equity.
Searcher is signing personal guarantees on bank debt and seller financing.

Reply by a searcher
in New York, NY, USA

For those who are considering this deal (we looked at this company and the only reason we didn't pursue it was unrelated to the financials/economics and more on trying to adhere to our industry focus more strictly), Searchfunder provides access to two industry reports via IBISworld that I found very helpful for understanding the macroeconomic factors at play and just how fragmented the industry is: Water and Sewer Line Construction and Water and Sewer Line Rehabilitation. I'd recommend giving them a read since they're free and useful (and not just because ^redacted‌ would never forgive me for leaving those resources untapped).

Best of luck to your friend Jory as he seeks this tight turnaround on fundraising.

Reply by an investor
from Universidade Católica Portuguesa in Lisbon, Portugal

Interesting on learning more please send me a message.
Thanks

+2 more replies.

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