Experience with a towing company?

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February 05, 2021

by a searcher from Harvard University - Harvard Business School in Boston, MA, USA

I've now seen a number of towing companies with compelling financials, does anyone have experiences in the industry? From my point of view, the companies appear relatively stable with attractive multiples. I'm particularly interested in companies that skew towards heavy duty towing (i.e., wrecker support for large trucks).

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commentor profile
Reply by a searcher
from Emory University in Atlanta, GA, USA
Hey Scott....we can discuss. They are definitely stable. The large truck wrecker support niche provides a bit of competitive protection (IMO) given the acquisition cost of the larger wreckers. There are some strategies you can consider deploying with that play. Once you get into normal auto towing, competition increases significantly. I'd stay clear of that initially.
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Reply by an investor
from University of Nebraska in Austin, TX, USA
The towing business is a play on commodity (scrap) pricing. At least the operations I've seen, a meaningful amount of margin is driven by scrap sales. I stripped this out this fact, then realized...It would probably be easier to just make a levered bet on metal prices and get the same outcome...without the management/risk of an operating company.
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