Acquisitions Anonymous - #1 for business buying, selling and operating - Let’s buy a medical staffing business - Acquisitions Anonymous episode 150

Episode Date: December 16, 2022

Want to receive this listing in your inbox? Signup for our weekly newsletter:https://www.getrevue.co/profile/acquanon-----Michael Girdley (@Girdley), Bill D’Alessandro (@BillDA), and Mills Snell (@thegeneralmills) talk about a Medical Industry Staffing Company.Staffing agencies recruit candidates on behalf of employers to fill team openings and help candidates find career opportunities in their field. We discuss some challenges and difficulties you can experience when running this type of business. We also determine whether we like this deal, and if it is more cost-effective to build it ourselves or buy it.-----Thanks to our sponsors!CloudBookkeeping offers adaptable solutions to businesses that want to focus on growth with a “client service first” approach. They offer a full suite of accounting services, including sophisticated reporting, QuickBooks software solutions, and full-service payroll options. ----- Show Notes:(00:00) - Introduction(00:37) - Our Sponsor is Cloudbookkeeping(02:15) - Big thanks to our listeners! We got through our 150th episode 😊(03:22) - Deal & financials: Medical Industry Staffing Company(05:20) - Do we like this deal? What’s our take on the stated financials?(06:20) - How does this business work? What’s the potential size of this business?(10:12) - How do staffing companies work?(14:12) - What is the major moat for staffing businesses?(18:20) - What incentive alignment do you need to work out when outsourcing recruitment?(24:00) - Is there a Bull case for this one?(26:26) - Does this pass the tailwind test?-----Additional episodes you might enjoy:#149 - Is this car spinner business a good side hustle?#148 - Growth Marketing explained: Shopify Superfood Greens Brand with 40% subscription rate w/ Baller Jesse Pujji#147 - $9.6M EBITDA Florida Armored ATM Services Business#141 - A very profitable B2B Internet Business in the Petcare Vertical#140 - Let’s SBA the heck out of this deal - with Special Guest Heather Endresen-----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 to Acquisitions Anonymous, the internet's number one podcast about buying and selling small businesses. Today is a very special episode, me, Bill and Mills did our 150th episode. So according to those people that are expertise in building podcasts, we are just getting started and we're having a ton of fun doing it. Today, we talked about a deal that I thought was super interesting. It was a $7 million a year medical staffing business located somewhere near Seattle. So we pulled that up and then we went to some really cool places talking about that type of industry and maybe how to make a bunch of money doing it. So here is the episode and I hope you enjoy it. Hey, Michael here, want to talk to you about today's sponsor for the episode, which is cloudbookkeeping.com.

So cloud bookkeeping is actually run by my neighbor, Charlie. So I've met him in person and can attest that he's a real human being and a good person. And what cloud bookkeeping does is offer a full suite of bookkeeping services all in the cloud. for you around QuickBooks and other technologies that you're using as a small business owner. So if you're interested in getting the bookkeeping part of running a business off of your plate and focusing on running your business, Charlie and his team are one to call. They can put together a bunch of other stuff in terms of helping you manage and grow your business besides just bookkeeping, sophisticated reporting, definitely helping you get your

quickbooks online set up in the right way, and a number of things around payroll as well. So definitely know them and recommend them. If you want to find out more about cloud bookkeeping, you can go to their website at cloudbookkeeping. com, reach out to Charlie. I know many of you have and see if he can help you running your business easier and more fun by letting them help with a lot of the bookkeeping solutions. And when you call, mention this podcast, it would help us. and help Charlie know that we're supporting him as well.

So thanks a bunch and cloudbookingbuking.com as the sponsor for today's episode. Welcome to episode number 150. We've made it, guys. We haven't killed each other yet. So great work by you. That's the bar. We just made it. We did this 150 times without killing each other.

Well, I mean, I think we've been really smart about the way we've set this up. And I think this is something that you thought about at the very beginning bill, which was like, okay, make it, since we're doing this as a sideline, right? We have day jobs. Like, make it so it's fun. Like, I think, by the way, I was, here's my story today and to tell you how much fun to do these episodes is. I was sick this morning. I woke up at 4 a.m. stomach upset. Food came out of my mouth into the sink. Like, it was bad news. But like, I did work all the morning at my house and I was like, see you guys later. I'm going to the office because I want to record an episode. Like, because it's fun. Like, it's so much fun. And you combine that with the fact we've put together no

prep whatsoever and it's like okay it's a perfect recipe like we want to record episodes so it's good yeah well that's what people want to hear i i hope that's what you want to hear which is us shooting the shit about deals and that's what it is that's the whole formula right there what they're saying is they don't want the product of our work they don't want to see us do any work don't think too hard about it michael just run your mouth okay all right who's ready to talk about this deal bill you want to read this one all right yes i'll read this one so this is cool because mill says he's he's seen these before. So this is a, Mills is a total expert on medical industry staffing with businesses. So it's a medical industry staffing company with a Pacific Northwest focus.

It has $2.3 million of cash flow and they're asking $7.5 million for it. So it's like three and a half times, roughly. So it says, this is a growing industry with an aging baby boomer population, a virtual business model. It's that the company has generated over. over $80 million in staffing revenue in the last couple of years, created and maintained accounts with over 157 long-term care and skilled nursing facilities across the Pacific Northwest, and hired, recruited, and onboarded over 900 clinicians into its registry. Brand awareness has allowed the company to establish strategic accounts with state departments and agencies throughout the region.

Revenue can be increased exponentially by hiring a recruiter to land accounts throughout the Pacific Northwest, Idaho, and Alaska. It says that the medical staffing agency provides clinicians and health care professionals to long-term care and skilled nursing facilities in Washington and Oregon. It's a virtual business model. There's two owners. One of them focused on systems process in the occasional special project. While number two is in charge of account management for strategic accounts scheduling and management personnel, both these guys work full time in it. There's a third employee who's a booking coordinator who earns $52,000 a year.

And then there's a team of six overseas contractors to coordinate recruiting, nurse onboarding, compliance, scheduling, and call support who earn between $5.50 per hour and $8 per hour. Again, these are overseas virtual. A second administrative team of two contractors facilitates time card entry and performs payroll support and earns $15.50 and $6 per hour respectively. And the business contracts with a local bookkeeper for a couple hours a month for $60 an hour. And that's all we know. I don't know very much about this industry. So it sounds like they place nurses with long-term care facilities. Is this a good business?

What do you guys know? In the description, I love that they basically give you the entire income statement. You know, they just walk their way down. Like they don't mention rent, but they pretty much mention all their other costs, right? Or at least all their other personnel costs. I think if you're looking for businesses to buy, this at first glance looks. really interesting, really unique, and it kind of breaks the mold. This is on Vizby, sell. It breaks the mold of what you see on a regular basis. But the shine comes off the penny

really quickly because these things are not quite a dime a dozen, but they are rampant. And this is listed by a broker, like a international IBA or IBBA broker, who, you know, they're at least somewhat reputable in the sense that they're not like a real estate broker, or some of them also are real estate brokers, I should say. But this guy, you know, he's just, he's an actual business broker. The problem is, is that there are so many, like, sleazy things that happen in this medical staffing M&A world that I've been on the receiving end of. These things are like pump and dump, right? So if you get really good at recruiting nurses, that's their X factor, is the ability to get nurses, like they say they have 900 on their registry.

If you can recruit and lock down nurses for contract nursing, usually travel nursing positions, then you go to hospitals or long-term care facilities, nursing homes, you know, you name it, doctor's offices. And you say, hey, look, we know you're short staffed. And here's what it would cost for us to play. place one or five or 15 nurses with you over this period. That $80 million in staffing revenue is a little bit of a misnomer. That's not their revenue, right? That is the grossed up amount of actual staffing revenue. And the way that the revenue gets reported and whether or not sits on their books is a big,

I don't think it does in this case, but it's a big deal because they're basically floating usually 30 days worth of payroll for the clinician for the hospital. Yeah, I did the division and they said they've placed 900 clinicians and they've done 80 million in revenue. Am I reading that right? Well, that's not their revenue. Right. That's how much they've earned.

I divided it out. That's 89,000 per professional. And so I assume that the professional takes home, I don't know, 60,000 of that and they keep a spread. Yep. Yep, exactly. It's staffing. It's traditional staffing model.

There is a word worth reading here. It says 80 million in staffing revenue revenue. over the last couple of years. So there's some fudgy numbers there. Maybe you guys are, maybe I missed that you were saying it, but that's not annual revenue. No, no, no.

I'm just, I was trying to do the unit economics up. It seems like you can recruit one person and during their time with you, they earn 90 grand and I assume you'll keep 20 or 30 of that. So that's like, you know, that's a big ticket placement, right?

You recruit one person, you make 20 grand. So it seems like what they've built here is an engine to recruit nurses and interview them and place them, and they bring the register for roughly 20 grand, not all up front, but probably over the course of the engagement each time.

I think it's important that we sort of understand how this industry works. I have a passing knowledge of it, but I wonder if you guys know better. It's my understanding that there is a massive nursing shortage in America. There are only so many nurses, and there are more nurses are needed than there are. So a lot of nurses have the opportunity to essentially write their ticket as far as where they want.

to work, how much they want to work, and almost even at what rate they want to work. And a lot of rural communities will pay through the nose to get either nurses to come moonlight or travel, you know, spend weekends in their community and see patients, et cetera. So this business is kind of greasing the skids of that imbalance of not enough nurses to meet demand. Is that accurate? Yeah. These contract nurses usually work 13 weeks since.

So, you know, if you're bored, you know, in charge. Charlotte, North Carolina, and you want to go see Montana, you either, you know, usually you don't go direct, right? You don't start calling the hospitals there and say, hey, would you hire me? You go through an agency and you say, hey, look, I want to be in Montana or Colorado or, you know, San Antonio, Texas. And then they say, we'll find you, we'll find you available positions and, you know, tell us your available start date. And then they place you in exchange for, you know, this placement fee. Okay. And they take a spread. And I think the nurses usually do quite well, right? Oh, yeah. Like easily six years. I know a lot of people that have started businesses like this and get tied into like the right employers or whatever. And like six years later, they're doing like 100 million a year in revenue. Like just and so and interestingly enough, it not only happens in the private sector like this a lot. It also happens in the public sector. And like I have friends that do. government contracting, like, is their business. And they'll show up as, like, a small minority

on business, and they'll go get, like, two or three staffing contracts. It'll be, like, random staffing for, like, some, like, government facility for the DOD, like, in Alabama or, like, Knoxville, right? And they're, they're like, yeah, we need 800 people here. And, like, they'll do the whole thing. And next thing you know, it's like $100 million your business. It's crazy. I don't know how much of that they're taking home. And they're also killing themselves to staff that kind of stuff. But like these things, I don't know anything that can grow faster than staffing. I mean, there's very few things that can grow quicker than this. Because you're a growing business and your core input is people, right? And you have a person who

can pick up the phone and go, send me another person and they show up on Monday and they don't suck. You are willing to pay a lot of money to that partner and you're going to pick up the phone and call them every time. So if you become the first call to a growing business, if a growing hospital or growing, you know, long-term care facility or whatever, I'd imagine you ride it all the way up. Worth noting the challenge to this market is exactly what you think about. The barriers to entries are super low. Like, that's the thing that's always there.

And I have friends that are in these staffing businesses. Like, it's always a challenge where it's like, okay, how are you going to structure it that you don't have, you know, a situation where your employees can go out and steal your customers from you and start their own firm? Because all you need to start a staffing firm like this is just some phones, a website, and some energy. So, like, how are you going to solve for that?

And I've seen how people solve for it in really interesting ways. This owner appears to have solved for it through a very straightforward thing, which is, oh, I'm the owner. I'm going to own those relationships. And then you know that your employees aren't going to steal from, steal your relationship from your strategic account. What I would say is these things are incredibly competitive. I mean, incredibly competitive.

You look at this and you think, oh, well, that's pretty good. this would be a very small fish. I mean, I've seen these that generate over $10 million in EBITDA, and they trade for like low double digit multiples. It's wild. I just, the fear for me, right, is just like what you said, how sustainable and how durable is that revenue stream. And it may be that you're locked in really deep with like a massive, you know, healthcare management company. And they, your phone just rings off the hook and you're their, you're their person. What's not, nice about this, Michael, compared to government contracts, is that government contracts are so tightly regulated and bid because it's usually federal funding dollars that, you know, you could catch it

in an off cycle or you could catch it at a bad renewal. And like you said, like their business could be $100 million in revenue. But if their contract doesn't renew or they get underbid for a DOD contract, it's like, okay, well, we're going to just shut our doors for three years and then we'll try again. There's not a lot of transferable value. In this. case, you can diversify, right? You could work with five hospital systems, and it's not these kind of tight, knit, you know, wired, wired tight ID IQ type contracts. Are you guys familiar with this guy, the Baltimore Ravens owner? I think I have it right. Biscotti, Bissiotti, net worth 6.5 billion. Guess how he made all of his money. Staffing. Yeah. So he founded Aerotech, the largest privately-owned

and recruiting company in the U.S. based in Maryland, a legist group, another talent management firm, tech systems. Like all these, they've got all these different businesses. And basically, like, their moat when you start to look at a business like this, gets to be like a couple different things. But by and large, the number one, when you kind of dig into these staffing businesses, like what causes them to actually win? By and large, a ton of them just ends up being operational excellence.

Like, my buddy owns a much smaller version of this. And I'm like, why do you win? He's like, oh, we've returned phone calls. Like, that's, I was like, oh, you mean, that's a moat. Operational excellence is a moat. And it's just so fascinating. So, yeah, like, as I discovered kind of how this guy did it, like, these guys started from basically nothing and then turned into this massive staffing enterprise.

And they've done some stuff that's very interesting. But when you double click on it, it's not like there's any sort of technology innovation or anything like that. It's just like, no, no, no, we're going to be really, really, really good operators and we're going to make good decisions and we're going to work hard. Like, that's a lot of the moat for these things. It's just really fascinating, which is scary or exciting, kind of depending on how you feel about it.

There's no unique model for distribution in this business. You know what I mean? It's somebody needs an employee and they pick up the phone and they find somebody who has bodies that can show up next week. What can get really unique and what can be somewhat proprietary is on the supply side, how do you actually find these people? Like, I've looked at some, like, very, very niche staffing. Some in the past that they only recruit people with secret or top secret clearance so that, you know, if you are an IT firm that does work with the Department of Defense and you just need somebody to sit at a desk and do data entry, but they have to have top secret clearance.

The way that those clearances get issued is like through sponsorship. You can't just like, be a guy and be like, hey, I think I want to get my top secret clearance and then go job hunting. So, like, if you can source those folks uniquely, that is very special. And then the employer can just hire them right away. The same with, like, mining, you can't just, like, show up and go work in the mine. And mining operators don't just hire people green and train them. They go to a staffing company. And that staffing company is like, hey, we've already given these guys 80 hours worth of time in a mine somewhere so that they meet, you know, the OSHA and MSHA and all these regs.

like one that I saw that was really cool that was kind of not as as techy but it was just very like execution oriented Michael was in the Detroit area. They were a light industrial staffing agency. And really their like X factor was they had a fleet of sprinter vans and they would pick people up. Like they had 20 locations across the city and, you know, any employer calls them and they're like, sure, yeah, we can basically we can get people to work. not just like make them work, but actually get them to your location. And is it impossible to recreate that from a competitive advantage? No, but nobody's going to be like, hey, we need 20 offices in Detroit with like 40 sprinter vans. That's a huge hurdle to get over.

And it made them, it made them a moat. Yeah. What it's been, it's been fascinating. I have buddies that are in the light industrial staffing space. It's been interesting watching them during the pandemic where it's the first time I've ever seen a business that everything for them, they were comfortable wanting to grow. They were like, we're ready to grow. We could triple our size tomorrow.

And it turned out over and over again, like the worst, the employment situation got for them to be able to hire people in the U.S., the more it stopped their growth. And I would just watch their face where they're just like, I have 1,400 open jobs and no candidates. And a lot of times where these guys do this placement, they don't get paid until the candidate shows up on day one. So, like, they're just sitting there, like, being super duper frustrated with the whole thing. And it's, I felt bad for them, but also felt good for them.

But anyway, they were making a lot of money anyway. So I wonder. But, like, you feel bad for them that they had these ambitions, but it was just totally out of their control because of the situation with the, you know, the employment environment. It's interesting that you bring up the aerotech guy, because we are actually an aerotech customer. We have used air tech to place folks in our warehouse production facility. And I've also used recruiters to place, uh, more kind of creative jobs and marketing, et cetera. The oftentimes the placement fee for recruiter can be 25% of the first year's salary.

So if you recruit $100,000 your person, you stroke a check for $25,000 up front, which is insanely expensive. But at the same time, if you need a person today, businesses pay it all the time because it's holding back their business. So I feel like the core product offering of businesses like these is I need the person right now and I don't have the bandwidth to recruit them. But at the same time, it makes me wonder, you know, all of your best clients, do all of your best clients eventually insource you? Because if you're doing this, and I'm paying $25,000 every single month and I'm hiring 12 people a year

at $100,000 a year, I should just hire a full-time recruiter. Right. So at what point, like, how does that dynamic work? Like, are you just always getting insourced by your good clients? Well, the other thing that those firms always say is, you know, what, like, there, their selling line is how much does it cost you if you make a bad hire? It's arguably more than $25,000. You know, I hate dealing with these folks and I'm like vehemently opposed to it because the incentives are so misaligned. If you don't ask them for it, they will rake you over the coals on these terms. It's like, hey, I'm going to pay you 25% of this person's annual salary in the first like two weeks that they start. And then what if they flake out on me in month nine or month three?

You know, I haven't even, I haven't even fully expense the $100,000 worth of payroll that we're basing your fee off of. And sometimes they'll say, well, we'll give you a credit on the next one or whatever, but I don't like the way that the incentives are so misaligned in this kind of staffing placement world. Yeah, it's very standard that you would get a free replacement. I mean, if you don't ask for a free replacement, you're really getting screwed in recruiting. But still, the whole point was that it was easy, and you didn't have the nine months to hire the right person anyway, so you're a recruiter. But then if you lose them after nine months, you're back at square one. What if you pay for? Yeah. Well, typically you get a guarantee. It'll be like 90 or 120 days for a replacement.

But, I mean, I think you highlight the problem. So there's two different models here where these staffing firms, right? You do direct hire, which is like recruiter fees. And then you do, well, then you do whatever the other one's called placement. Anyway, there's two models. One, yeah, so that's a model to you. But then they're staffing, right? Where like, and I think staffing is where tech systems would tell you, like, that's, where they tend to do most. And that's where our near business is going, by the way. We've tried the whole thing.

We've tried placement, direct hire, which is like recruiting fees. And then we've ended up in the, hey, like, oh, you just want us to solve your problem for you. That's what people ultimately want. And that's where, like, tech systems and these guys go in there and they say, we're going to be, instead of being adversarial, like a recruiter's going to be and your 25% good luck. you know, when I place somebody there and, and oh, by the way, me as a Mr. Recruiter,

like, I'm not actually motivated to bring you good candidates. I'm just motivated to give you the fastest candidate that you'll hire. But that's where something like tech systems, like, as I've dug into their business, they spend a ton more time trying to be a partner for the hiring company, right? And then go through there and say, okay, well, here's how it's going to work. I'm going to, I'm going to solve your problem of making sure you have somebody in this role, and I'm going to take a cut for doing that. And like, well, and then, If they don't work out, I'll find you a new person, right? And I'm going to take 30, 40% of their salary or whatever you're paying them.

Like, I'm going to mark that up. And that's how I'm going to approach it, which frankly, like, that's where Nears ended up. And that's, I like that a ton better because the interest are so much more aligned than kind of the recruiter situation. Plus, as a business owner, like that partnership where you're doing staffing is much better because it's recurring revenue rather than one time, eat what you kill. And it just makes a huge difference. Anyway, sorry for that rant about how I think about the staffing business.

No, I agree. And I mean, what's interesting, by the way, is that Amazon does this for all their distribution centers. If you go work for Amazon, like for the first 90 days, you're not an Amazon employee. You work for a staffing agency. And Amazon says, okay, we know that the attrition in the first 90 days is going to give us absolute brain damage. Let's let somebody else deal with that. And, you know, you're not technically an Amazon employee. You're an employee of a vendor of Amazon. And you show up and you get a badge and you go through all the things. but Amazon insulates themselves from the churn on the front end. And then if you make it past that point, you might be able to get hired on, right, as a full-time employee for a distribution center or whatnot. Yeah, super interesting. And I love how Amazon has done that kind of stuff. Like, they do it with their, I don't know if you just said the delivery people as well. Like all those delivery things are basically outsourced to, like, you know, franchisors

who can only work with Amazon. And then they, Amazon still owns the trucks. Like my buddy owns one of those for Amazon. And it's like, I think I've talked about this before where I'm just like, well, okay, so how do you make more money every month? And he said, oh, Amazon just tells me what I can make. That's basically how it works. It's just like the worst business ever.

Bill, Bill, you know something about that, don't you? It's so crazy. So let's go back to this deal. You know, I have a lot more rants about staffing now that I own a staffing company. It's like, oh, so interesting alert. But anyway, like, are you guys ready to write a check? for $7.5 million for this business doing $2.5 million and appears you have to work in the business. I don't see how this business works without you working in it. You guys ready to

buy this for three times? The cash flow will be lower, right? I mean, it seems like you got to replace kind of two full-time executive level people, which is what the role the owner's taking. And I bet that this 2.3 million cash flow is not the like the real affected number. I bet this is what you would call an SDE number seller's discretionary earnings. But, I mean, let me make kind of the bull case for this, right? There are not enough nurses. Nurses are pretty mercenary because there's not enough nurses. There are not going to be a huge number of new nurses anytime soon, and demand for health care in this country is exploding. It would seem that kind of structurally, the tailwinds are in place for this business. And if they, if, I don't know, but if they do have a

pretty solid, repeatable process and infrastructure, you know, and good executors and they answer the phones and call people back. I mean, it's priced at three times even, duh, and it seems like a growing industry. Is it that crazy? I don't think it's insane. I would definitely want to dig in and understand what the going multiples are for these types of businesses, because I just don't know. because frankly, like, this is a lot of money for a business that I know how to build, you know? So I don't know. Maybe this goes back to the Gurdly problem where I'm like, why would I buy that?

I could just totally build it myself. Just always, we're just like, well, okay, call me in a decade jackass. Yeah, this is low barriers to entry, but it seems to have some scale. It's making over $2 million a year, right? So it's, if you are capable of going out and building this, can you build it for less than six or $7 million? probably um but you know not everybody's an entrepreneur it's uh you know it's so it's so interesting you know how these um well it's so interesting that i just had a point and i totally blanked on it

so yeah i'm sick today guys sorry whatever i was going to say super genius mills what i mean what do you think you've had some relationship or some familiarity rather with this industry do these businesses are they transactable does this make sense to buy i mean Are you excited for this one or not really? No, I'm sorry. No. I think it's way too cheap relative to what I've seen these trade for. And so I think there's some kind of structural problem with it.

There's something in this business. And it may be that like, I don't know, their entire business could have been built on like Facebook ads, you know, or something where the ability to uniquely source talent shifted from underneath them. And they don't have the ability to. recreate it elsewhere or something like that. But, you know, again, I've seen these trade for way, way, way more. The other, I think, problem that this kind of points to is that these businesses don't have tremendous kind of like terminal value or transferable value because of the ability

for somebody to just compete with you rather than buy you. Like if somebody wanted to come into this market and Michael's pulling it up on maps. But like if somebody wanted to come into this market and either buy your business and try and take that market share or come in and compete it, if they are, you know, 10 times your size, they can definitely outcompete you. They have better systems, better distribution, you know, established sales force. They have a better cost structure. They have a better funnel for getting nurses. And so there's a reason that this isn't being consolidated. you know, like most $2.3 million EBITR SDE businesses are kind of on the cusp of being consolidatable for whatever industry they're in.

And I think there's probably some good reasons why this one isn't. And I think it's industry, but also probably company specific. I think for me, this deal makes sense of that kind of multiple if there's some sort of moat or sustainability around those relationships that they had. Is there something where they've, you know, I can be. certain that's going to be around for the next few years. It sounds like a great platform there. And your bank is probably going to want to see that too. If you're going to be brought money for this, they're going to need to see that to make this deal underwritable. Otherwise, you know,

feels like a situation in which there just needs to be a ton of seller financing to make this kind of situation work. And I think you also have to ask the, like, why am I the lucky buyer question here? Like, why has nobody already in the staffing industry bought this supposedly really well-priced gym? Like, why am I the lucky idiot to walk over from Texas and buy this? one, I have no idea. Yeah. Well, I mean, that's the thing about the staffing industry, right? Is it is definitely already been rolled up like 10 times.

Like private equity already knows about the staffing industry. And I mean, I'm pretty sure AeroTech is a rollup, right? I mean, there's been several really large scale placement agency rollups, probably medical placement agency. So the question's got to be, why are they not buying this? You know, could they come into my market? Like, what's wrong with it? And I wouldn't say it's too small at $2 million in EBITDA, which is.

is very often the reason that somebody's get passed over. So it's not too small, but it's not gotten rolled up. Why? I don't know the answer. So do you want to hear the craziest story about staffing industry, staffing companies this size? If you're, so you guys are familiar with how ERC and PPP worked, right? Like you got reimbursed for keeping people jobs during COVID in the United States? Well, when you're a staffing agency, those people all technically work for you.

They don't work for the employer. So who do you think got to keep all that free money? Like there were two groups that benefited in an enormous way, drive-through restaurants and staffing agencies through all that stuff. So there may be, I would also dig into how much of this is one-time governmental revenue in terms of those profit margins and how much of it is, you know, straight up. That's a good point. I mean, I don't think people should be putting their tax credits and their PPP loans and revenue,

but I have seen it a lot. It's a lot. Well, you know, that normal is everything. It makes it fair. We've got to make it fair here. It's all about being fair. Yeah. Yeah.

All right. So we don't hate it, but we got questions. I like it. This is a great industry to be. I mean, if you do the test of tailwinds, like, is it going to be easier to hire nurses? No. Is health care continuing to be a bigger part of our economy? Yes.

Can you move this job overseas? No. Do the people in this, like, in this stock, it looked like people I would want to hang out with. Yes. Like, there's a lot of good stuff going on. They're always good-looking people in the stock photo. You ever notice that there if people look like me?

Oh, yeah. Those hotties. All right. I think that'll do it for today. Marco, did we banter enough? By the way, listeners, we're supposed to be bantering more because we want to know if people want more banter or more deals. So is there enough bantering today?

Tweet us. If you would like us just to shoot the shit more and not talk about deals and tell stories, tweet us. if you're like, hey, shut up, dummies, talk about more deals, also tweet us. Maybe we just let this podcast degrade until we don't talk about deals anymore. And we're just like a small business version of the All In podcast. Hey, they've got millions of listeners. Oh, my God, they kill it.

Well, because those guys are lunatics, they'll just say whatever. So funny. That's what the people want. I like to think our people are more sophisticated than that. Small, you know, where the rubber hits the road? Rubber hits the road. Yep, that's right. all right that's it for today that wraps up another episode of acquisitions and ominous we'll see you

guys next time