Dry cleaning roll up advice

searcher profile

October 11, 2023

by a searcher from Northwestern University - Kellogg School of Management in New York, NY, USA

Has anyone here worked on a dry cleaning roll up? Considering whether I can put a number of small local shops together with minimal to low upfront cash investments mixed with seller's debt.

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Reply by a searcher
from University of Portsmouth in Houston, TX, USA
Minimal cash/low upfront investment and big seller notes might have worked during COVID when cleaners were on their knees but this probably won't be attractive now. Those stores that survived are back on their feet and multiples are pretty lofty unless you're planning to be an active operator and can offset those with your salary. I will admit I had similar thinking to you some 2.5 years ago, but the theory is far different from reality. I am happy with the one I currently own but the other ~30 deals I've looked at stank something rotten and were either junk that should just close the door for good or were grossly overvalued. This industry needs more consolidation but it is almost exclusively operated by mom & pops so it will take more time.
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Reply by an investor
from University of Oxford in San Francisco, CA, USA
Hi Kelsey,
Am actively considering a similar investment. What's your take on the viability of this space?
I can see the cashflows and a vast number of multi-site aqcuisition targets to pick from but even beyond PERC sites the 'eco' chemicals are still fairly toxic/risky.
Can you see buyers for a rollup in this space?
What did you conclude? Thanks for any thoughts, David
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