Anyone acquired or diligenced a small water treatment / conditioning business?
Posting anonymously to avoid intermediary - I’m currently under LOI on a small water treatment company and would appreciate input from anyone who has acquired, operated, financed, or diligenced a similar business.
High-level profile:
- ~$1M revenue
- 20-25% SDE margin
- Mix of residential and commercial
- Water conditioning / water treatment / filtration / RO / softener installs
- Recurring route service component
- Some install / project work alongside ongoing service
- Small team with key field employees
- Founder-led, with seller transition contemplated
Questions for the group:
- For those who have looked at or acquired this type of business, what diligence items surprised you?
- What are the hidden liabilities in water treatment / filtration businesses that first time buyers often miss?
- How did you validate route revenue and customer stickiness?
- What licensing, permitting, or warranty issues should be reviewed early?
- What would make you reprice or walk from a deal like this?
