Acquisitions Anonymous - #1 for business buying, selling and operating - Inside a Miami Contractor Sale: Hidden Accounting Traps & Big Backlog

Episode Date: November 21, 2025

In this episode the hosts dissect a $23 million asking‑price acquisition of a Miami‑based specialty contractor with $41 M revenue, $4.7 M EBITDA, a $52 M backlog—and dig into its contract structure, accounting risks and deal suitability.Business Listing Link – https://businessesforsale.nuwireinvestor.com/business-opportunity/specialty-contractor-with-long-term-contracts-and-62mm-backlog/2395873/?J=ANWelcome to Acquisitions Anonymous – the #1 podcast for small business M&A. Every week, we break down businesses for sale and talk about buying, operating, and growing them.💰 Sponsored by:Tonnesen Accounting Services - Tonnesen provides full quality of earnings reports trusted by buyers, lenders, and brokers on over $500 million in deals each year. Fast, detailed, and affordable. Visit tonnesenaccountingservices.com or connect with Josh Tonnesen on LinkedIn for a free consult.Acquisition Lab – Your fast-track to business ownership. Get hands-on support, world-class resources, and join a top-tier community of acquisition entrepreneurs. Schedule your free consultation at https://www.acquisitionlab.com and mention Acquisitions Anonymous!In this episode, the team reviews a specialty contractor serving healthcare and aviation clients in Miami‑Dade County, founded in 2007, with ~$41 M in revenue, ~$4.7 M in EBITDA, and a contracted backlog of ~$52 M. The asking price of ~$23 M implies about a 4.9× EBITDA multiple. The business claims that 80‑85% of revenue comes from renewable 3‑5 year institutional contracts with government and institutional clients, and emphasizes a capital‑light model with only ~$100k in equipment and ~53 employees.Key Highlights:- Revenue ~$41‑45 M, EBITDA ~$4.7 M (~10% margin) with backlog ~$52 M.- Asking price ~$23 M → ~4.9× EBITDA, which is reasonable compared to many contractor deals.- Contract structure: 80‑85% from 3‑5 year renewable institutional contracts (government, healthcare, aviation) which reduce reliance on open bidding.- Accounting/diligence risks: low equipment/FF&E (~$100k) suggests perhaps subcontract model or specialized niche; retainage, WIP, deferred revenue and billing practices must be scrutinized.- Buyer fit & financing: likely better for an industry‑experienced buyer; banks/lenders will want low leverage and proven transition plan given the contract complexity and possible change‑of‑control risk.Subscribe 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]

Welcome back, everybody, to another episode of Acquisitions Anonymous, the internet's number one podcast for small business M&A. Me, Bill, and Heather are joined today by Josh Tunison from Tunison accounting services. They do Q of E work. And Josh brought a great perspective. We talked about a business today that was really interesting that had a ton of backlog and work in progress, a construction, specialty construction contractor in Miami-Dade with over a year's worth of backlog, $52 million. dollars worth of backlog. Amazing kind of sticker shock. But we dig into that. How valuable is it? The nature of these contracts, this business focuses on health care and aviation with recurring contracts. It kind of has a little bit of everything that you want to see in a business like this. Bill really likes it. He may be tempted to go and pursue this one if it wasn't down in Miami.

But we have a great discussion about the SBA dynamics. So much to talk about here. I hope you enjoy the episode. Stick around after a quick word from our sponsor. We'll set Acquisition Anonymous. Hello, another episode of Acquisitions Anonymous. We don't have 100% beers anymore. And thumbs downing on just the plus inventory line. Hey, Michael here. This episode is brought to you by Toninson Accounting Services, the leading provider of quality of earnings reports for small and mid-sized business deals.

Every year, their team reviews over $500 million in transactions, and the reports are trusted by buyers. bankers, sellers, and brokers nationwide. What sets Toninson accounting services apart is premium quality work at an unmatched price, a full quality of earnings report for just $6,000. You'll get more depth and insight than firms who charge twice as much, which is why so many dealmakers turn to Toninson accounting services when accuracy and speed matter the most. There's a link to tononsoncentaccounting services.com in the show notes or reach out to Josh Toninson on LinkedIn for a free consultation, where he'll walk you through the process, step by step, and answer any questions that you have.

that Acquisition's Anonymous sent you. Hello, everyone. Welcome back to Acquisition Anonymous and Happy Halloween. I'm the only one that got the memo that it was Halloween here. A bunch of Grinches. What's the Halloween version of Grinch? You guys all are Grinches. The question is, did you have this shirt already in your closet or did you go get it?

This is my every Halloween shirt. You got to go. And you don't know what I'm talking about unless you go on YouTube to see my Halloween shirt. You need to see it. Yeah. Yeah. Every year. So it's my Halloween show.

all my Zoom calls dressed up for Halloween today. But we also have a special guest. Not only is Halloween, we got Josh Tonneson here, who is our quality of earnings expert and guests. Nice to have you here, Josh. Thanks for having me. So we were kind of chatting before the show, and I wanted to pick a deal this week

that had a lot of complicated accounting vagaries. Because we got Josh. So we have an interesting one today. So this is a specialty contractor with long-term contracts and a $52 million backlog. So I'll read the listing and then I want to see what you guys think about this one. This is in Miami, Florida, Miami-Dade County. It has gross revenue of $41 million, EBITDA of $4.7 million. It's been around since 2007 and they're asking $23 million for it.

So what's 23 divided by 4.7? They want 4.9 times, almost five times EBITDA here. Here's the description. This offering presents a compelling opportunity to acquire a profitable and process-driven specialty general contractor serving institutional clients throughout South Florida. With consistent revenue of $45 million, 4.7 of EBITDA, and a robust $52 million contracted backlog. The company is well positioned for scalable growth,

either as a standalone platform or strategic bolt-on in infrastructure or facility services. So there's a few breadcrumbs here being dropped. It is a recurring revenue model with long-term contracts. Approximately 80 to 85% of revenue is derived from renewable three-to-five-year contracts with government and institutional clients. These contracts have been repeatedly renewed. With customer relationships averaging 8 plus years, this recurring structure offers downside protection and visibility while reducing reliance

on open bids. It has a strategic sector focus on health care and aviation. They are both recession-resistant capital-intensive verticals. These sectors involve complex regulatory environments and high-compliance standards, where the company's certifications and technical expertise creates significant competitive advantage. All projects fall under existing contractual agreements. It has a strong backlog of $52 million contracted and it underpins immediate post-close value and ongoing cash flow. This pipeline includes infrastructure upgrades at airports, healthcare campuses, and other county facilities with consistently high backlog to revenue conversion rates expected over the next 24 months. The leadership team averages over a decade of tenure. The managing

director is capable of assuming a general manager role enabling a seamless ownership transition. The organizational structure supports scalability and minimizes dependence on the owner. It says the growth opportunities include geographic expansion into neighboring areas. to formalize the business development process and build outbound sales to increase their RFP win rate, or to consolidate smaller niche contractors across Florida. So this is in Miami, Florida. It says they have $20,000, so almost no inventory, which is included in the asking price. They have $100,000 of furniture fixtures and equipment.

I don't understand how they're doing this much business with no FF&E, but we can talk about that. They have 53 employees, and the reason for selling is retirement. What do you guys think about this business? Well, I thought it was a contractor until you said it only has $100,000 of equipment. Now I'm a little bit perplexed as to where it sits in the value chain of contracting. It feels like maybe it's more of a business services than an actual contractor. Could that be? Well, it says infrastructure upgrades, right?

Like repeatedly, it's also possible that they're just wrong and they don't know what FF and E means. That's true. I've also seen some that are just subcontractors, too, where they don't own any of the materials or anything like that, and they're literally just subbing out the labor. So it could be that. Meaning they're the labor provider, and they show up and drive all the machines.

Someone else for a government contracts. Yeah, sometimes that's the case, too. Well, that would be very interesting. I mean, the capital-white business with this much bathlog and EBITDA. And their margins are pretty good, 10% EBITDA margins, almost exactly, right? And it's a one-year backlog. Yeah, one-year. Yeah, so that's another way to think about it, right?

$52 million of backlog and $45 million of sales. So they've got sort of the whole year or, you know, into the second year contracted up already. I mean, my first question is how the heck do they win business? You know, like, it's just, are they winning any new business at all? Or is just these renewable three-to-five-year contracts? I wonder if they have some kind of DBE status in order to get healthcare and they say aviation contracts.

I see a lot of those because, I mean, we do, we do those types of projects as a, as a subcontractor. A lot of them end up going to either female own, minority own, or service disabled veterans because they're usually federally funded. And so like when you follow the dollars, there's a lot of incentive for those owners, you know, being the airport commission or whatever to allocate dollars to set aside contracts. So I'd be curious if that's the case because it's not easily transferable unless you also, you know, meet those requirements. Yeah, the SBA has like recent headlines are they're going after abuses of that program.

There are certain rules, and I don't know exactly, I believe it's something like, if you have the status, you have to be doing 51% of the work at least, and you could sub out the rest. So you have to be really careful that you're really doing it. Apparently, there are some companies like that that the SBA is going after in court because they're alleging that they do not do the 51%. They're simply just sitting in between with the status and subbing out almost all of the work. So if that's the case, that would be an interesting thing to know because there's more scrutiny on that whole, that whole system. system these days. I've been to pre bids at our federal VA hospital here in South Carolina, and you'll have these contractors who come, who have, you know, DBE status. And it's for like a new building, like a $40 million new building. And these guys will show up and they're like, hey, we want a bid from you as the general contractor. Like, we will be the general contractor. We want you to give us a roofing number. And when you look them up, their like specialty is like audio visual or like just these weird quirky things, but they're like, how hard could it be?

Like we, you know, we'll get these contracts. So they are fairly competitive and, and you can get hosed fairly easily in this world because the contract requirements are very strict and very binding. And it's not like you can just go, you know, if you, if you were building a house for somebody and you mess up, you just go to the homeowner, like, sorry, like, I've got to make this right. Like the Army Corps of Engineers doesn't work that way. You know, the, the airport commission, you know, probably doesn't work that way. Yeah. Yeah.

So if I had to guess, I think it's, so the, so you're a couple things are standing out of me. 8 to 85% of revenue derived from three to five year renewable contracts with government and institutional clients, and they're repeatedly renewed and the relationships are eight plus years. It also says it's health care and aviation, highly complex regulatory, the company has certifications of technicalized expertise. I think this has got to be some sort of maintenance,

some sort of upkeep, like capital upkeep, upkeep of the embedded capital. I don't know if it's cleaning or testing or some sort of maintenance, right? If they've got no FF&E, maybe it's like light, tune up, swing a hammer, oil the machine, something like that. It's probably maybe like the HVAC units

of these places are special to exhaust the airplane exhaust or the hospital stuff, and then it'd be tuned every three months. So it's got to be something like that. Keep in mind, the vast majority of general contractors don't self-perform hardly any work. So they have estimators, project managers, AR, AP, and business development.

The vast majority of them are not actually employing general labor. Now, I think the best ones do. And there's a lot that we work with who are really, good at handling general conditions themselves. But there's massive general contractors who do not have any field personnel other than maybe a superintendent, right, who is going to man the job site trailer and check all the trades. But more and more, general contractors are not self-performing any work. And it could be anything as like, Bill, I think you're right in that they may have some, you know, specialty that they focus on. Like it could be renovations of these spaces, hospitals and airports,

are incredibly difficult. We've done roofing projects at airports. You have to get all of your employees badged by the, like, you know, by the FAA and by TSA to go into secure areas. And we've had problems where like literally we may only have one guy who can get badged, but he has to remain an eye shot of every other person on the crew at all times on the roof. We're not even in, but we're in a secured area.

So the compliance and the process they talk about is actually really important here because you just have to be good at doing tons of paperwork. Yes, which is absolutely a confidence that whole business, many big valuable business have been built on, just high competence on filling out a whole bunch of regulatory paperwork. So, Josh, I got a question for you. So as part of, like, I'm getting a Q of E on this business, right? What am I going to find on the balance?

to this thing because there's probably like a bunch of deferred revenue on all these contracts. It's likely that, you know, they probably aren't accounting for that correctly. You know, when I get an income statement from this business as part of diligence, what am I going to be looking at here? Yeah, I'd say for this one, I was looking at some other numbers when you guys were talking to. And so the revenue that they have is at $41 million. But then they also have employees of 53, right? Again, assuming all this data is correct, it's just,

it is a weird story because then that's about $780K in revenue per employee. So I think it might be some kind of GC sub out some of the work as well just because of that high markup there. But then really the question is, okay, what are they actually doing? Then that could determine how they do their accounting for it. So if they do own these contracts for long periods of time and they actually are spending more materials. So when I see high revenue per employee, I'm thinking there's probably more materials and other things they are up charging for as well. So my original comment probably wasn't right then. But so what I would expect is if it's long, longer term contracts, a lot of times what they'll do is they'll bill out every maybe month or

maybe milestones for their project. And then what they do is a percent complete analysis on that to make sure if they're over or underbilled. For a deal of this size with almost $5 million in Evita, I assume they have an okay accounting team that's probably doing all that. Although for smaller deals, they typically, I'll say it's like 50, 50 depending on if they'll go to that level of detail or just strictly be on a cash basis. And would you expect, I mean, this is all contracted revenue. I have seen people ask to get paid for it. Like, hey, this is all money, you know, work you're definitely going to go get. You know, I want to get paid for this.

And I go, well, okay, I still got to fulfill it, though. You know, I've got to do all the work. I got all the costs. Like, I can't pay you for that up front. I've seen them want like some contingency too. Like if all this work materializes, I sold it. I want some pay out of materializes. Do you guys think that's BS or do you think that's reasonable?

Yeah, so I'll say everything is very negotiable. That's how I'll start that out. And everybody asks me like, what's industry standard? And I'll say it really depends. So on smaller deals, typically the buy, it's more so with with the smaller deals, it's less likely working capital will be left in the business. with larger deals, and that's also why there's that multiple increase to raise, because usually working capital is.

So what is generally the way I think about it is like there's certain accounts on the balance sheet that you'll compare to a peg. So it's like, what's your average 12 months for each of those balance sheet accounts, like accounts receivable, for example? You say, okay, on average, the business should have a million dollars of AR. And then you look at what's that closing, right? And if it's 800K, well, they're short 200K. so they're going to leave that for you at closing.

That's kind of similar to the whip, not exactly, but that's the same mentality of, hey, the previous owner did the work. Why am I leaving the cash consideration for that for the new owner, right? So with the larger deals, you're kind of buying a business with less transitionary noise needed for working capital. So I'd say for that, right, it's usually then, for a deal of this size,

I would say that the whip remains in there. So it's like historically, if you do $500,000 of work without invoicing or collecting from the customers, that stays with the business. If it doesn't stay with the business, which you run into, is that the buyer will have to boot out that money to the seller at closing. If it's that 500K, then they need to bring an extra 500K2 closing, or they'll pay it after 90 days or however it is, or just tag it onto their loan, and then this will have to bring 20% of that and finance 80% or whatever it is. The other big issue I see on these is retainage.

So in the construction industry, and Josh, you can talk more about this. We have regular AR, but we also have this like long dated AR that everybody just kind of knows is out there that's called retainage that is usually somewhere between like 5 and 10 percent of the total job. And those could be paid like a year later depending on what you're doing. Yeah, 100%. And I'd say that follows the same mentality of just whichever you're going to do for AR, right? Where it's like, well, if the company average is 100K and retainage, well, you're going to have that. And that's where most of us working capital discussion comes into like cash flow, right? Like what's the immediate cash need for the buyer to have their business like steady state going forward.

So a lot of it is transitionary. But with retainage, it's the same thing. Except again, like you're saying, a little more age. But also, I'm going to give me honest with that, but there's sometimes work you need to do. That's why they retain it because you have something, some punchless items you need to complete. So that I say 100%. The retainage makes a lot more sense to. keep in there because there could be additional costs for that.

The other thing with this, so I think at face value, 52 million looks like a lot of backlog. Heather made the point right away. I mean, you're basically at a year's revenue. If you're a general contractor and you don't have work booked a year out, you're dying. These are long lead time projects. They've got architects engaged. They've already procured funding. There is a long sales cycle. And so for every. general contractor, there is a cliff. Usually you want to see it like 18 to 24 months out, depending on the nature of the work. But this backlog, like, it's amazing sticker shock in a good way, but then when you dig, it's maybe not as good. I would also be really curious if this business has

significant customer concentration because of the nature of these contracts. Yeah. Lumpy project work is what we lenders like to call it. So it's lumpy project work, but it's also contracted on, three to five-year contracts, right? So it could be worse, is what I'm saying. They're usually like task order contracts or multiple award task order contracts, maytox, or ID IQ, indefinite delivery, indefinite quantity. So they may say, look, we don't want to have to go out, like out to the general public and post bids every time we need, you know, a toilet partition replaced in the airport bathroom. But what we're going to do is we're going to do a request for proposals or a request

for qualifications and pre-qualify a certain number of contractors. And we've got a pot of money that's, let's just say it's $10 million, that we will award multiple task orders out underneath that. But you've got to get pre-qualified. You have to be on the list in order to receive those solicitations. So all of this just, I think, highlights the complexity of it. From a contract standpoint, The difficulty is these are probably not assignable in a very clean cut way. Most of these contracts, like we sign them as a subcontractor, they don't allow for, you know, assignment without mutual consent. And also they have change of control provisions to say you can't just assume the ownership

of that entity like a stock purchase versus an asset purchase. But we want to know if there's any more than, you know, 20% change of ownership. Are you ready to take a leap into business? business ownership, but you don't know where to start? Well, look no further than Acquisition Lab, the premier resource for entrepreneurs seeking to buy their dream business. Founded by Harvard MBA, and acquisition expert, Walker, Dybul, the Lab is your fast-tracked success in the search diligence and acquisition process. With hands-on support, world-class resources and a community of like-minded entrepreneurs, Acquisition Lab gives you the tools and confidence to navigate every step of the

journey. And we're proud to call Walker and Chelsea, the lab's director, long-time friends of the podcast. They're passionate about helping entrepreneurs like you take the next big step. So don't wait to make your business ownership dream or reality. Visit AcquisitionLab.com today to learn more and schedule your free consultation. And when you do, be sure to tell them the Acquisitions Anonymous podcast sent you. There's timing considerations too when you're trying to buy a business like this in terms of like where are they in the process of these larger contracts. What I found, I have never funded a contractor this large, but smaller contractors, you ideally want a time at a time of the year like, say, around Christmas or the end of the year where the contracts would be at a low point.

Things would have been wrapped up and you haven't really started new contracts. And maybe it's different in this location or the seasonality is a little bit different. But it's very tough to figure out what's the right time to close on a business like this if they've got large work and process going on. Absolutely. Yeah. Is this financeable? You know, definitely not SBA. We'll start there because it's too big. But if it was, if we shrunk it down and we tried to go smaller, it's really challenging for banks to finance this kind of business. If they're going to do it at all, number one, they want the buyer to be experienced, you know, a strategy, like sort of as teased here, a strategic buyer could maybe finance it. That's much easier. But a first time buyer would have to have a lot of experience in this space. And the, you know, a strategy, like the, like sort of is teased here. A strategic buyer could maybe finance it. And a. And a. A first time buyer would have to have a lot of experience in this space. And the space. And the. And the. And the. And exact industry, have the licenses required that the seller probably has now.

And then, even then, the bank will want to be pretty low leverage relative. Like, they'd go much higher leverage on other types of businesses. This type of business, they would want to stay safe if they're going to do it at all at like two turns or two and a half turns of EBITDA at the most. Yeah. Josh, do you feel like on businesses like this, there's a really big gap between the stated EBITDA and the real cash flow? Um, so I'll say a lot of times it depends on the broker. That's kind of how it goes, right, with how much detail they do into it. Um, the, I say by far the bigger gap is the working capital with this, where it's just like the seller doesn't want to leave it, but the buyer can't front the cash to do it, right? Um, most of the engagements that we're on, I don't have the numbers up in front of me, but most of the time we find, I'll say a variance greater than 5%, maybe like 50% of the time or 60% of the time, just historically.

A lot of that comes down to judgments and also on the adbacks too where it's like, okay, you're going to, I had a government contractor that I did, I think it was in July, where the guy added back a bunch of one-time contracts expenses, but he had all of his contracts were different, but he always had contracts, right? So it's not really one time. It's assigned to the revenue. So things like that could get kind of complicated for people in a way where they're trying to be very aggressive with their ad backs without seeing the SIM.

I can't really give a quick, you know, sniff. test of it. But a lot of what I would recommend anyway looking into due diligence around their P&L is looking at what's called to as their whip schedules. Again, if it's that longer term, right? So what you'll see is, okay, what's the total costs? They estimate for the full project. What is the total cost they've incurred to date? And then what percent complete are they? And then they compare that to the percent that they've actually built. And then that's how you make sure on an accrual basis, you're okay. The reason why I'd say that's the most important thing. And again, this is a larger deal.

So I assume they have a good accounting team there that's looking at it. But if not, what we tend to find is that maybe they did their SIM on the cash basis tax returns, right? So that's going to be a huge difference from the actual, you know, what was quote unquote earned by the business, right? I did another electrical contractor. I think we wrapped it up this month where they were advertising 400 KSDE, 800K, and then 1.8 million the next year. Like huge growth. but it was because they were on that cash basis type type accounting, right,

as opposed to getting their whip schedules and their actual accruals. So we saw it was about a million each with a decrease in showing 12. So that was a much different conversation, which the lender didn't really identify either. So it was a pretty bad potential issue for our client. And what Josh is talking about with this like with WIP, work in progress, as the buyer,

if you're not deep diving into every single one of those job costs, like the job codes and looking at what's been billed to date, the seller maybe intentionally or unintentionally could be aggressively billing those jobs. And then if, you know, in that true up, you would have, you would have a liability on your balance sheet that says, you know, billings in excess of cost, right? I think is the category code where you've got to make sure that if they've billed ahead, like if they build at 90%, but they've only completed 75% of the work, you could be left holding the bag post-closed where you're like, wait a second, I can't bill anymore on this job,

and I'm still behind. You said something really interesting to me, because you said the lender didn't even pick it up, and your Q of E actually adjusted that million eight down to a million. I think that's really, it's a selling point for lenders to get better at reading Q of E's and interacting with the Q of E vendor so that they do understand these things, because I see that a lot. I do see that a lot where I think sometimes the buyer is getting a better understanding of the numbers from their Q of E vendor and the lenders just sitting there staring at a tax return or whatever and not digging in. Yeah, sometimes it's a little awkward, I'll say, because we, because in that deal, we did the QOE, we told our client, reported it all back, walked him through it all,

and then we didn't hear from them for two weeks and it comes back to us because he said, the bank saw it now they're having issues. And it's like, yeah, well, they obviously did their tax return analysis without, you know, considering the full thing. So, but obviously, you know, we want to give the clients the best picture of the actual business, not necessarily what's fundable from a bank perspective. Which is important when you get a Q of E, right, who is the client? The client is the buyer. You were trying to be as truthful as possible.

And it's not always the case that that QV gets shared with the bank if the buyer is your client, right, Josh? Well, 100%. So like on our product, what we do is we document the risks. sometimes I write the financial documents were very messy. Sometimes I have people telling me that stuff is in material, but it aggregates up to like 10 or 15% of SDE, right? Like it's obviously not, especially if you put a multiple on it. The seller's not going to want to reduce the price for it. So it's like that's where we'll document that all for our clients. And then we tell them like,

hey, if you're going to share this with the bank, you know, you might, you can share the whole thing with them or you might want to just give them some of the cleaner information, right? So it's up to them on what they want to share or not because most banks don't require it. One thing I've seen upmarket is that a lot of sellers, if they're, you know, broker deals, especially like an investment bank, maybe more than a broker, business broker, where they'll engage a Q of E prior to listing the business to kind of minimize surprises. And as a buyer, it was always the most exciting signal. Like, okay, this is going to be polished.

Like, there may not be a lot of found money. I talked to a lot of buyers who are like, I got a Q of E. And the business has like higher even though than they thought. So you don't necessarily get that, but it at least shows this person's serious. They've started to spend money. You know, they're committed and they're not just, you know, waiting to see kind of what offers they get and then, you know, telling everybody to leave them alone. Yeah, I'll say, like, we've seen a big growing demand for our quality burnings on the sell side. We charge a very reasonable price.

And that's why the brokers are like, well, you know what? my deals are now going to be twice as likely to close or something like that, right? So they're a lot more interested in getting the data up front because no one wants to do all that work with due diligence and then the deal die. I'll say the buy side's a little nicer in a lot of ways because if I find a huge issue, I'm like, okay, look, I just saved your butt on this as opposed to the seller. It's like, sorry, your business is worth half as much, you know, which is not the best conversation. Yeah, I would love to see more sales side diligence of some kind because I, I think to your point, why are brokers even willing to take some of these listings without diligence? You know, because, and then they get upset at the buyer's diligence, but it's the facts, you know,

and those facts could have been known sooner. It kind of obviously I'm incredibly biased because I'm the one asking the questions with them. But like it just, it cracks me up a little bit because they always put on their sims like, this will be investigated during due diligence. And then if you ask questions, it's a big deal, you know? Don't ask about this. just ask this other growth opportunities. It's all about growth opportunity.

Yeah. All right. Anything else to mention on this one? Anyone who haven't hit? Should we go to thumbs up, thumbs down? Let's go. All right, let's do it. So Mills, you're our resident construction guy.

Thumbs up, thumbs down on this one. I definitely would sign the NDA. I'm thumbs up on the NDA. I'm dying to know about DBE status, customer concentration, and like, do they do something really cool and unique in their special? or is the specialty just, we've already told you about it, it's health care and aviation. Yeah. Heather, how about you? I'm thumbs up if it's the right buyer. If we've got somebody who is in the industry already,

you know, it has to be the exact right kind of buyer. I'm thumbs up for them. Not for me. So maybe this is my naivete talking, but I, of all of the contractor businesses we looked at, I really like this one. I mean, like it has some of the challenges of being a a general contractor business. But broadly, this seems like a good general contractor business, right? I mean, it's got the standing, even if they're not like really reoccurring contracts, they're at least standing contracts that seems to be getting renewed. You're kind of, you don't need to go out and win your business again all the time.

You're kind of in place. And when stuff breaks, they call you at the very least. And maybe it sounds like they don't have formalized biz devs. You know, you could build that out and go try to win some more of these renewable contracts. as far as GCs go, I like it. And it's selling into government and aviation and health care, which are stable kind of recession. Like, they're going to do that CAPX no matter what,

whether there's a recession or not. All told, I like this one for a general contractor. I'm thumbs up. All right, Josh, your thumbs up, but also what is the thing you're most worried about from an accounting or quality of earnings perspective? Yeah, no, I'd say thumbs up too, the EBITDA.

a multiple on that seems pretty reasonable. But obviously, like with anything, right, it's like, well, how accurate is the data? There's some things that are inconsistent, like we talked about, like, okay, inventory is low if they are actually, you know, having to perform with materials and things like that. So I'd say it's definitely worth looking into more. And the backlog is huge, right? Having a whole year of, and that's where it's like, what is backlog? How is that to find, right?

But definitely worth learning more about that. for due diligence obviously making sure the accounting is that you know that's 80% of it that their EBIT is actually their EBITA and it's repeatable but also just as importantly like what are you buying with this business right you're buying the contracts is a good part and also some of the infrastructure with the with the skilled labor so I would say that's where like the majority of the time would be spent is like well these contracts are they like like Mills was saying are they going to be transferable but also how sure am I that they're not going to you know if there's termination clause that they're going to walk away or something like that. Are we the clear

choice for them and can we continue to be? And then also, you know, how good is the staff, right? Do I just have one person who's super technical and whatever I'm specialized in? Do I have some contingency plans or is there any risk of me losing that work and reputation? So yeah, agree. There's certainly a lot too diligence here, but this could be a really good business and I would definitely get a Q of A on this one. All right. So that'll wrap it up for this episode of Acquisitions Anonymous. If you like this one, there are 450 or so more just like it. Well, not just like it because we didn't have Josh.

But there are 450 more like it on Acquisitions Anonymous or not Acquisitionedonon.com. ACQUanon.com is the website. And if you want to learn a little bit more about Josh and quality of earnings, maybe you've got a deal under contract. You're looking at something. Josh, where can they find you? Yeah, you can reach out on LinkedIn. We also are just, you can look us up,

Tunis and Accounting Services on Google or Tunisandaccounting Services.com. Also, you can email me directly at Josh at Tunisandaccounting Services.com. All right. Thanks for being here, Josh. It was fun to have a guest with a little bit more accounting knowledge than we have.

And we will see everybody on the next episode of Acquisitions Anonymous.