Acquisitions Anonymous - #1 for business buying, selling and operating - $13mm Scaffolding Rental Company in Minnesota / $8.4mm Stationery Company - e36

Episode Date: July 13, 2021

We get together this week to talk about two deals:- a $13mm Scaffolding Rental Company in Minnesota - an $8.4mm Stationery Company mostly serving the governmental market-Enjoy!-----* Do you love Acquanon and want to see our smiling faces? Subscribe to our Youtube channel.* Do you enjoy our content? Rate our show!* Follow us on twitter @acquanon Learnings about small business acquisitions and operations.-----Past guests on Acquanon include Nick Huber, Brent Beshore, Aaron Rubin, Mike Botkin, Ari Ozick, Mitchell Baldridge, Xavier Helgelsen, Mike Loftus, Steve Divitkos, Dzmitry Miranovich, Morgan Tate and more.-----Additional episodes you might enjoy:#62 Two Landscaping Businesses for Sale - Mike Loftus CEO of Connor's Landscaping#66 Analyzing Software Businesses for Sale with Steve Divitkos, experienced industry CEO#42 $900k Moving and Storage Company / $500k Rural Mini-Storage#61 Two Manufacturing Businesses for Sale - Brent Beshore - Founder and CEO at Permanent Equity#24 $5mm pool services and lifeguard staffing co / $2mm septic services business -  featuring baller @WilsonCompanies as a special guest!#45 $800k/yr cleaning business in Midland, TX / a $565k/yr window cleaning business in San Antonio, TX #48 Two Landscaping Businesses for Sale - Mike Botkin of Benchmark Group--- Support this podcast: https://anchor.fm/dealtalk/supportSubscribe to weekly our Newsletter and get curated deals in your inboxAdvertise with us by clicking here Do you love Acquanon and want to see our smiling faces? Subscribe to our Youtube channel. Do you enjoy our content? Rate our show! Follow us on Twitter @acquanon Learnings about small business acquisitions and operations. For inquiries or suggestions, email us at [e-mail]

All right, welcome to Acquisitions Anonymous. This is the internet number one podcast about small businesses for sale. I am one of your co-host, Michael Girdley. And every week we get together and me, Bill Dillofoundreau, and Mill Snell get together. And we talk about a couple of businesses that are currently for sale, usually priced at less than 20 million and sometimes tiny and sometimes close to that side. So we're excited. And I'm super excited because I'm actually on vacation. My wife is letting me record this.

while I'm on the road and excited to talk about a couple of deals with the guys today. So, Bill, good morning to you. Good morning. I get to show you up today with my smooth microphone audio. Yeah, I'm on my phone driving down a highway in New Hampshire. So hopefully it turns out okay. So we have two deals to talk about today. One is an e-commerce stationery shop, and then we have a scaffolding business that we're going to talk about that we got some information on.

I think, Bill, you have our second one, or are you going first? I'll go first. And then Mills is going to do a niche scaffolding rental company. Let's do it. All right. So this is a cool one I found this week. I especially love this one because they disclose the name of the company. So, again, we don't talk about proprietary information here on Acquisition of Anonymous.

Everything we talk about is in the public domain. In this case, this business is for sale and they posted their name so we can talk about it. This company is called Gorilla Stationers. The title of the listing is E-Commerce Office. supplies and services for governments with a 45% net margin. They're asking $12.2 million for the business, and they have $2.85 million of cash flow. That's about four times, 4.2 times, not bad. 8 million in revenue, 8.4 in revenue, 2.85 in EBITDA slash cash flow established in 2012. The real estate has been a reliable, customer-driven, single-source provider of office

supplies and services for governments and businesses. Gorilla Dropships, 150,000 products, Dropships, keyword, 150,000 products primarily to local, state and federal governments under a long-term government GSA contract. Customers can place a single order, get a single delivery, a single invoice, products are used from paperclips to promo items, business machines, janitorial surprise, PPE products, promotional items and document services, including printing signs and banners. A globally outsourced team and infrastructure, no media. advertising, it drop ship inventory, low overhead, low prices for consumers, and higher net income

margins of 45%. So there's just a lot of keywords here in this listing that make my ears perk up and want to ask more questions. And I'm going to drop even more as we keep going down listing. The business has been up 5x. It's a sales 5x up since the company team was moved globally in 2019, 2020. To me, that sounds like made to work remotely during the pandemic. However, the very next bullet, so they make it sound like moving globally five-x sales. However, the very next bullet is in 2020, the company received a GSA contract, which is a long-term government-wide contract with commercial firms providing federal, state, and local government buyers, access to commercial supplies and services.

80% of revenue is from these government contracts. So this makes me think in 2020, they picked up a G-Santis. GSA contract and immediately 5x because now 80% of the revenue from this contract, which is exactly how they 5x if you kind of do the reciprocal there. And they go on to say that their market is growing, et cetera. It's very working capital light. It's very little inventory since it's drop shift, very little receivables. They said they use contract drivers, Uber slash Lyft, 24-7 for seven-day week pickup in delivery,

which is super interesting. They've got 28 shipping facilities nationwide to fulfill their next day delivery promise, which is weird because they also say there is drop ship, which that sounds like maybe they have a distributor that has 28 shipping facilities nationwide, and they basically are booking Uber's to and from this this kind of distributor's facility, which is fascinating. I don't think that works. I don't know.

I'm imagining like a group of employees with like a bunch of phones, like booking Uber's. Yeah. Well, which is crazy. It says NetSuite ERP system, so they've like really invested in their back office software, easy to operate remotely, virtual office in Long Beach, California, to do business with the county of Los Angeles, which is one of their business, their biggest customers. It says growth opportunities is open offices in the largest markets around the country to enable kind of a local business preference. You know, kind of going on down, they say that, you know, management team is in place for the transition and that the owner can train and transition, and this is a home-based business. I will add one other thing.

I did go to their website since they, you know, disclose their name. for real estateers. Very prominent on the website is their GSA contract, the Ability One program, and it says woman-owned small business with their contract number right on the thing. So, in summary, they sell off supplies online. They got a GSA contract in 2020. They five-x on the back of that contract, and now they want to sell you the business. Mills, what do you think? My eyes gravitated towards the same thing on the website right away. Woman-owned and small business designation within the federal government, which is how I'm sure they were able to get this GSA contract. Have you done any work with General Services Administration? I have not. I'm

sort of fascinated by the whole concept. Do you have experience there? Yeah, I mean, it's very nuanced and there's a lot of barriers to entry because it's just a bureaucratic web that you have to navigate through. But once you have it, it's a big deal. It depends on what type of GSA contract they have. Some of them are more valuable than others. The best case scenario is what's called an IDIQ contract with the federal government. It's indefinite delivery, indefinite quantity, and it basically is not capped. So you can get a GSA contract that says, hey, look, we're going to buy a million dollars worth of stuff from you. And once that runs out, then, you know, it's done. ID IQ means just, hey, it's open-ended as long as we need the things that you're selling or what you're providing.

It could be missiles. It could be, you know, aircraft parts. It could be whatever. All the supplies even. Yeah, in this case, office supplies. So IDIQ are pretty helpful and very, very valuable. There's also blanket purchase agreements for repetitive purchases, which is probably what they have. Or there's these GWACs, which are like, I can't remember the acronym, but it's like government acquisition.

contract, government-wide, maybe, acquisition contracts. And I think those are more used, if I'm remembering right, across different agencies. So all that to say, yes, this looks really good on paper to be able to say you have this,

but you've got to get down into the nitty-gritty. You've got to understand what kind of assignability is there. And, you know, Bill, I'm going to harp on your favorite thing, which is, you know, buy our business fit.

This is not a business that elements brands could buy because you're not, a female and you don't have woman-owned status. Also, this is a very difficult business for a larger acquirer to buy because of the small business designation. And it depends exactly on how that's classified, but it's usually based on revenue. And so no consolidator could buy this business. I also, I mean, you know, the obvious here is that they want to be paid for the fact that they've got this contract, that their revenue is increased by five times. And, you know, that

cash flow may be very, you know, not risk less, but it may be very predictable, but it also they haven't fully fulfilled it and they don't have a lot of track record of fulfilling it. So it looks like it's a lot of cleaning products, you know, like face masks, gloves, hand sanitizers, cleaners and disinfectants. That stuff's obviously not going to go away in the next six months. But I mean, for a customer called guerrilla stationers, it's supposed to be office supply products. And then you go to their website and it's, you know, hand sanitizer, et cetera. So then not only do you have a sudden, we got a new GSA contract, boom, we're selling all kinds of stuff. I would immediately want to understand is that boom from pandemic related stuff that you're now selling for the government?

If so, that's definitely not nearly a stable. If all of a sudden they got this contract and they're selling, you know, planners and paper and pens and, you know, whatever else you would sell to a government office, you know, I might be more comfortable with that. But again, you know, I can never buy this business because they're clearly. benefiting from the woman-owned status, which if you're not familiar, the government has to allocate a certain number of purchases to kind of special status-owned entities, female-owned. Set-as-side contracts. Set-as-side contracts. Thank you. Yeah. So they're definitely benefiting from that, which is great. But if I were to buy this business, it would immediately invalidate their GSA contract,

and the revenue would decline 80% because I'm the guy. So you have to find, and also if a large business bought it, same thing. it no longer be a small business. So props to this woman because she figured out she could get a woman-owned small business GSA designation and really popped her business. It just sort of limits the acquireset to people who can fulfill that designation as well. Operationally, too, I mean, I would have some big questions and kind of red flags around this whole drop ship scheme.

And it feels kind of like a scheme, right? because, I mean, good for them, right? It seems very ingenious and a lot of ingenuity to put it together. But, you know, if they're realizing, hey, look, we don't have that local delivery drivers. We can find this way to kind of hack Uber and Lyft. We set up, you know, hey, pick me up at this distribution facility and drop me off at this person's office. And then I guess they're just mess. I mean, I don't know.

Who knows, right? But worst case scenario in my mind, they're messaging the driver within Uber's platform and saying, hey, by the way, you're picking up a box. and then I need you to take it to this person. And if you're willing to do this, then I will give you a great tip. You know, like, I mean, it's- Uber now has a courier service. So you can specifically designate this is a courier trial.

I was so worried about the logistics of this business and just getting crushed. Oh, yeah. I mean, I had a guess, you know, they've got 150,000 items in the catalog. And because they said they've got 28 locations in their listing station nationwide, I think this is a genius layer on top of an office supplies distributor. And this person realized, hey, things that matter in this industry are same-day delivery and set-aside contracts. So I can layer over on top of this distributor, a GSA contract that qualifies for set-asides,

plus I can layer Uber-Lift on top of this distributor. I mean, it's freaking genius. I really don't mean to hate on this at all. absolutely freaking genius. I mean, I would just love to learn more about this business, even though it's not something that I could buy. I'm also shocking the margins are 45% net, because you would think if you're just layering, you know, sort of this, this services layer on top of a distributor that it would be a thin margin business, but maybe it's the same day. Maybe they charge double because it's the same day delivery.

Yeah. I think you're going to discover that she found a niche in all of these governmental employees who had been working in offices when it makes total sense for like a truck full of stuff to show up and deliver office supplies for the whole office. I think you're going to discover that she was the only way that these folks could get staplers and stuff sent to their house under GSA. And that's what was going on.

Amazon Prime for Home Office under GSA. Right. Yeah, they all started working remotely very suddenly. And they're like, okay, well, how are we going to get it there? And this lady's like, well, I can get it there. And they can't go to Amazon and they can't go to Office Depot and they can't go back to their office to get the supplies. And they sure is heck aren't going to come out of their own pocket to pay for a stapler. So I bet you this is one of those, you know, there's the COVID bump businesses that saw so much benefit from COVID and they just accelerated their long-term prospects.

This feels like the opposite, which is one of the ones that saw a huge COVID bump and then it's going to see an huge non-COVID bump when, you know, things come crashing back down to Earth in the next year. too. Yeah. And not just COVID cliff. COVID cliff. I just don't know how defensible that or how valuable I should say that woman owned designation, small business own designation GSA contractors. I mean, if that's really rare, I mean, maybe they'll win deals just on that.

And that's sort of differentiator. And maybe that is durable. But I don't have a good sense for what that's worth. I would have a feeling somebody that knows this industry probably understands exactly what that's worth. Do we know where they're selling? Uh, didn't say. Oh, oh, yeah, that's classic.

The owner intends to sell the company to pursue other business interests. Okay. Okay. That's code for, I think there are better opportunities out there for me. And this is at the top of the market. So let's sell. Yep. Got it.

Yep. So super interesting. I mean, I would fight all the time in the world. I'd love to kick the tires in this business, even though I couldn't buy it just as a kind of business school case study. But this business is basically like a zero maturity bond. You just clip the coupons as long as you can and you don't get any par value back when

It's all when it will mature. And at some point it will mature, right? You won't get the renewal of the GSA contract or, you know, the actual demand will just erode completely because people will go back to the offices or whatever. You know, they won't, they won't have to buy a stapler every month. They'll have a stapler at their house. And it's interesting with the Uber Connect thing, I did look it up. I'm learning something new today. So the package limitations they specify are under 30 pounds and under $100 in value. So that's just kind of an interesting thing. that if you look on their website too, your real estateers, the amount of products they have access to is staggering. I mean, you can buy office furniture. You know, like there's just categories upon categories of different things you can buy. So I'm going to go back to something you said, Bill, that I think was really insightful. They don't have their own, they're distributing for a distribute.

You know, so they just have access to like, it's not U-Line, but it'd be something like that, right? like Granger for industrial or construction. They're just going to those people and saying, hey, look, we're going to pull out of your inventory once we get an order, and we're going to take it the last mile. So they'd be somewhat limited, right, about what they have access to. They're not pulling products from overseas or white labeling anything or manufacturing

of themselves. They're just a distributor to a distributor, distributor for a distributor. But I agree. I'm amazed that their margins are so high. It must be able to command a same day delivery premium or some. something. But it's super cool. Good for this woman. Like she's making $2.8 million a year. I think she should keep making that for as long as the sun is shining. But boy, I would have a lot of trepidation, even if I were a woman and that contract could transfer about paying $12.something million for this

business. Because it's got to go at this rate for four years before you get your money back. Yeah. And in all likelihood, you know, if she got the contract in 2020, it takes time to spool up. I mean, she probably made between half a million and $1.5 million net last year, right? And this is, you know, kind of forward-looking EBITDA. You know, hey, look, once we continue on this trajectory while we have this contract, so this is probably not a last 12 months kind of number. Super interesting. Again, there's probably a buyer out there. Maybe you could structure some sort of earn-out deal, you know, where you're essentially participating in the coupon payments as long as they go on. on, you know, maybe you come in and you go, you know, you seller keep 75% of revenue or of EBITDA in year one, 50% in year two, 25% in year three and four and five or something like that. So you're going to get paid out over five years and there's no risk to me, you know, as the buyer, but, you know, this is seller how you get liquid. So I think you could structure around this risk, assuming you could

also work around the GSA transferability issues. You know, so like this business could transfer, just I don't see it transferring with a big upfront check. And I don't know, I don't know the nuances of it, but you know, you definitely don't want to play in the gray when it comes to, you know, your status about whether or not you'd be female owned or minority own or any other DBE disadvantaged business owner status. But I'm wondering if there's a way to thread the needle and maybe she retains majority of the common and you have a minority of preferred or, you know, with control or something,

right there's probably a way to work around but again you're taking a huge risk to write a 12 million purchase price check on something that is probably gray i think it would be easier just to be female and buy this business there is a way a lot of folks deal with that and you'll notice a lot of these businesses just happen to be on by a husband and wife team and the wife is the one on the thing i've seen that a lot yeah yeah interesting one let's throw it over to mills for number two Yeah, so this is a niche scaffolding rental company with 500 customers. Headline is that they have a 33% profit margin and they have just shy of $5.5 million a year in cash flow. So the business does, I guess this is, let me look and see.

I think this is 20 through 2019. No, 2020. So 2020, the business did. I actually know it's dropped. All right, so 2019, the business did gross revenue of a little over $15 million with $6.7 million in sellers' cash flow, which is what this firm is calling it. That does not include that does not include CAPEX coming out. So they went from 15.2 with 6.7 million on the bottom line to 2020 to the 13.8 million in revenue with 4.6 million sellers cash flow. And the business, let me read this description, a diverse base of 500 customers, this company offers top of the line scaffolding equipment in the Twin Cities metro area and has three-year average cash flow of $5.5 million.

They currently have 20 recurring clients that include general contractors, concrete masonry, demolition, and repair and installation contractors. They install, dismantle, rent, and cell frame scaffolding, system scaffolding, shoring scaffolding, hydromobile platforms with 59% of their revenue coming from rentals. They say that there's only a million dollars a year in CAPEX, that there's $13 million in assets and a three and a half. million dollar work in progress backlog. They average 70% utilization with about 9.9 million in inventory out for rentals on a monthly basis. They have 3.9 million in hydro mobile inventory. I'm not actually sure what that is. That's 70 to 75 units. And they are far and ahead of their competitors who only have one to three units on a competing brand. They will offer 3D drawings for more complex projects, which differentiates them. They don't do any advertising. They have,

ooh, ooh, interesting. They have a sister company that is 23% of their revenue that's union-based. So maybe they're trying to segregate out union and non-union labor and revenue. In any given month, they have about 150 work orders and their large projects go for longer than one year and more than a million dollars in value. Purchase price includes $11 million worth of scaffolding inventory, 1.6 million in vehicles, which is some pickups, some longbed trucks, a one-ton truck, things like that. What am I missing? Anything jumps out at you, Bill? I did notice a ton of adbacks here. Their net income is floating around 1.5 to 2 million. And as you would expect in this asset-heavy business, they've got, you know, between $1 and $2 million of depreciation. That gets added back.

every year, but that is only less than half of the total adbacks on this business. There's a ton of owner's retirement plan. It actually doesn't say owners. It just says retirement plan. It looks like the owner is running a ton of stuff through this business. What's really interesting to me is they're wanting to sell this business for $23 million. And it's got, you know, it is declining, but let's give them the average kind of about $5 million of cash flow. So it's a little over 4x. But they also say it, comes with the $11 to $13 million in scaffolding inventory, which I guess immediately I understand, is that worth anything at all? You know, if it is, it's got, and if it's got 20 years

of a useful life, I mean, maybe it's just all metal and it does last forever. In that case, you know, you're getting, you're getting something, the scaffolding's worth something, and you're paying Forex for the business and getting scaffolding kind of for free, as you sort of should, because you need the scaffolding to run the business. You can't sell the scaffolding separately, suddenly you have no business. So, I mean, this is sort of classic equipment rental, which I am always fascinated by, because it's all about how many assets do I have, how long can I stretch out their useful life, and what kind of what's the yield I can make on them before they go kaput. In general, with all these businesses, the thing that scares the crap

out of me is the owner always knows more than you about the status of his assets. So I always just believe, like when it's like these asset yield businesses, like the owner is probably looking four to five years down the road and he's going, I got to replace all the scaffolding kind of soonish. You know, I would like that to be not my problem. You know, that's, and that's why I'm selling now. So that's always the thing I'm super concerned about with these types of things. Yeah. Yeah, absolutely. Well, and you bring up a good point. I mean, the ad backs are significant. And some of these are real, right? I mean, you know, compensation to owner is, you know, in 2019, it was $1.6 million. That's a real ad back. The tax on those salaries, that's a real

ad back. The retirement plan, I really hope that that's just the owner throwing a ton of money into a defined contribution plan or something like that. I mean, I've seen sellers say, hey, look, we're really generous with our retirement plan for our employees. That doesn't have to continue. And we always think, yeah, right, I'm not going to be the guy who buys the business and takes away everybody's retirement plan. So some of these are real. But like one of these replacement, $375,000 a year for replacement, that's just a cost of doing business. You can't add back the fact that you have to constantly be replacing your inventory, the thing that is required for generating revenue, and say, hey, give me credit for this because I keep up my, I keep up with my equipment.

So really, like, as you diligence this, you are diligent seeing the assets as much as the business. I mean, this business is basically about how high quality, are the scaffolds in this case. And then the other thing you're diligent thing is the customer relationships and ability to sell deals. I mean, those are like the two major points of diligence here. Can they keep renting these things and are the things still going to be rentable as you diligence this? It is interesting. They only have 21 employees. That's pretty decent for a construction-related business like this. And the revenue for employee kind of stands out. Mills, does it say how they're planning and hoping to structure the whole thing?

asset sale, stock sale. Because I bet you very likely you're going to be buying yourself a bunch of already depreciated assets with all the scaffolding, right? Every time I seem to see scaffolding, it looks like it's about a million years old. So, yeah, that ad back that you talked about, Bill, about whether you'll be able to keep using that depreciation as a tax shield. I wouldn't be surprised if you buy this as an equity deal and you look up and your depreciation cliff has ended on a lot of these things where you're not able to protect that. more in terms of shielding income. Yeah, exactly. You know, this particular business broker, they like to model the deal out.

This is the one that got me. So I rate maybe four or five episodes ago. It doesn't even pencil. And I'm not really sure this one does either. So their annual debt service payments are just over $3 million. And if you look at their net income, right, their book net income is 1.6 last year. So, I mean, the broker is trying to say, hey, look, this is a great. great deal. Look at your cash on cash return. After the debt service, you still have

$2.3 million of net profit left over. And I mean, you'd have to get in there and really fine, tune, but based on which adjustments, you know, you would be willing to accept and which ones you wouldn't. But they're treating EBITDA like it's true free cash flow. I mean, basically the depreciation and the amount that they're saying you'd have left over in net profit or one in the same, which tells you that at the end of the day, there would be no margin of safety. A good way to think about depreciation is that you basically need to save that amount of money every year. You've got to put it aside to save to replace your equipment when it eventually craps out. Right. So if you've got, you buy a million dollar piece of equipment and it's got a

10 year, useful life, you're going to depreciate it at 100 grand every year. And you might think, oh, well, that's a non-cash expense. That's not actually cash out of my pocket. But you need to be putting that $100,000 in a savings account somewhere because at year 10, you've got a million dollar expense to replace that asset. So an easy shortcut, if you want to kind of approximate your actual long-term cash flow from an asset-heavy business, is to not treat the depreciation as an ad back because you need to be saving that money to eventually come out of pocket to replace the asset. And in all likelihood, right, what you're doing is you don't have one piece of equipment that's worth a million dollars, you have 10, right, that are worth a million dollars,

you know, $100,000 a piece. And so if the depreciable life is 10 years, you're basically buying one new piece of equipment every year. At least in my experience, it doesn't ever go kind of into a savings account. It's being re, you know, it's being replowed back into your, you know, furniture fixture equipment. Another thing that I did note here is their revenue pie is 40% general contractors, 22% concrete and masonry, 16% restoration repairs and contractors and 10% demolition contractors. I would expect

that they are probably fairly levered to the general construction industry. So, you know, if we have, and what do we know about construction? It's super cyclical, right? So you want to really understand what markets are they in, what geographic markets are they in, how are they doing, where are they in their in their cycle because you could if you lever this thing up right you could really lose your ass during a down cycle because those debt payments don't compress so I would also really want to understand the local geographic cycle the macro cycle for whatever end market they're renting the scaffolding to because a great way to lose your ass is to use debt to buy a cyclical business especially at the top of the cycle yeah yeah exactly I've looked at

some other scaffolding related deals that are this size and larger. And there are some really interesting niche areas that you can find yourself in that help mitigate some of that. But you're exactly right. I mean, you're talking about buying something that has very, very little margin of safety and is definitely going to have macro and probably micro cycles. For me, I think also looking at this, you've got to ask yourself, why has this not been bought already by somebody who's in Detroit in the same business or

private equity looking to roll up this space? So, you know, I would want to have a good answer to why that hasn't happened from pretty educated buyers on both of those sides and why this is still on the market. But a fun one for sure. I think that's what you're about to say, Bill. Yeah, fun one. Interesting. I mean, this is the type of thing that it's worth getting the book on and talking to the owner because occasionally they are a gym. Most often they're trying to sell you a bunch of already depreciated assets and you're going to have to come out of pocket and forth. Just when you get out, like get your money back, like, oh, I've owned this business for four years.

I finally got my principal back. That's, of course, when whack, you've got to replace all your scaffolding. That's usually what's going on in these deals. But if it's not, this can be a money printer, you know, if these scaffolds are good for, you know, 50 years or whatever. So it would be worth talking to, but I would be looking to get to a quick no on this one. Michael, to echo your point, too, on why hasn't somebody else already bought this? What I've seen sometimes in these cases is that there's a big national player. I mean, this is right for competition, right?

There's a big national competitor who has come into their market or is coming into their market and doesn't want to buy them. And so, you know, they see that, at least from a market. mile away, right, because they're there and you aren't and you don't know it. And there's a reason that the competitor doesn't want to buy them. They'd just rather compete with them. And you end up kind of buying this thing that looks like, oh, okay, it's got some durability. But there's some real significant headwinds coming into their industry or into their locale that you just don't know. Which tells you diligence is as much about the industry and the local geographic area in this

case as it is about the specific company. If you get caught, just navel-gating. down the financial statements and you don't actually zoom out and go, what business is this company in? What are the competitive threats? What are the macro threats? You know, like your very basic business school like Porter's Five Forces analysis, it's so easy to skip that. You know, when you're, when you really want to do a deal and you see a, you know, financial statements that maybe look good, you know, you're hearing all the right things from a seller. It's sometimes easy to forget to just step back and from first principles go. Is there a long-term durable competitive advantage here or not? Great point. And with that, I think we'll wrap it up.

Gurley, I'll spare you the CODA since you're on the road. Well, I know Mills has something he wanted to bring up. And then, yeah, I totally agree. Thanks for the help. But yeah, Mills over to you. Well, I don't know that we can announce it yet. We'll tease it in that I tweeted earlier this week about a, I really want to go kind of under the hood, pun intended on a tow truck business.

And we have maybe, I think, hopefully an upcoming episode, with an operator of one of those businesses, an owner and operator of one of those businesses, and we'll look at a couple of tow truck deals. So fingers crossed that pans out. But we may do it completely anonymous. We'll have to see what this person is willing to do. They may be anonymous and the deals may be anonymous.

We'll see. All right. Super cool. Well, Bill over to you. Sorry. All right. Well, I was just going to wrap it up and say, you know, tune in next week.

Hopefully we'll have an anonymous tow truck guest. If not, we'll have a couple more deals ourselves to go over. early enjoy your vacation. This has been another week of Acquisitions Anonymous. Beautiful. All right, guys. Appreciate you. We'll talk too.