Acquisitions Anonymous - #1 for business buying, selling and operating - NYC $18mm Helicopter company for sale - Acquisitions Anonymous 216

Episode Date: August 4, 2023

Girdley (@girdley),  and Bill (@BillDA) review a pretty large deal that involves helicopters in the big apple.Today's deal comes from Axial.  Axial is a trusted deal sourcing platform serving professional acquirers in the American lower middle market.Axial partners with over 2,000 boutique investment bankers and business brokers who use the Axial platform to market their deals to lower middle market acquirers.Sweetspot on Axial in terms of deal size is from $5M to $75M in enterprise value, located solely within the US and Canada.Deal activity occurs in five industry verticals: manufacturing, tech / IT services, healthcare, B2B services, and consumer.___________________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.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]

Hey, everybody. Welcome back to another episode of Acquisitions Anonymous, and we are doing a bigger deal today, one from Axiomark, our new favorite source of bigger deals. It is a helicopter private transportation business. So picture shuttling people from buildings in Manhattan to the Hamptons. This business is doing almost 20 million in sales and about $6 million. EBITDA. It was fun to talk with Michael about it. It's me and Michael on this episode. So I hope you guys really enjoy this episode of Acquisitions Anonymous. 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 make 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 cloudbookkeeping.com as the sponsor for today's episode. Michael, I am pumped for this episode of Acquisites Anonymous because it involves a dream I have always had,

which is to fly a helicopter. Well, look, I'm excited about this because this morning, we swapped around a note from a listener who was like, we want you guys to do more small deals. So we've responded in the truest acquisitions anonymous way possible. We're doing a deal that does $8 million in revenue. So we just like, okay, you want a small deal? Okay, well, here's a big one.

You're going to like it. No, we'll try to do some small ones going for it. But this is a, this comes from our friends of the Axiol, who have turned into like a great opportunity for us to look at some bigger stuff, which I love. This particular deal has 2.6 million in EBITDA. Yes. No, look, you're looking at 2021.

Oh, yeah. Oh, yeah. It's significantly bigger. The growth in this thing is intense. All right, let me pull this up and I will read it. Does that work? That works. So yeah, this one is from Axi.

I don't know if our listeners know about Axiol. If you're kind of in the SMB world, you're like, biz by sell and you, you schlep it out with brokers and you can find great deal for that way. We've been doing more on Axiol lately because they have one bigger deals and candidly sometimes better ones. Like, I mean, how many like, you know, garbage sideways, you know, weird stuff we looked at oddball, you know, on this pod. But if it makes it to axial, it's like kind of like been scrubbed a little bit. Like the bad ones don't make it to Axial, it doesn't seem. Like the neighborhood bar and grill and random small excerpt does not make it to XEle. It does make it to BISB by sale.

Right. Because Axel usually has like they've got a real intermediary. They usually have an investment bank if they're an Axial versus a broker on BIS by sell. 100%. Oh, by the way, if you hear any background noise, it's because I'm at my house for reasons. but the, when your air conditioning goes out in the middle of the summer in San Antonio,

it's a, it's pretty serious. It's a big deal. So the AC guy is here getting us back down under 80 degrees again inside the house. So I'm hopeful that your air conditioning is fixed, but this just reminded me of a crazy

home maintenance story that I have to tell that just happened to me. Because even tangentially fireworks related. So this blew my mind. So I had to stay home from the office yesterday because the roof guy was coming because there is a leak in our roof and it has been raining and like there's water like pouring out of my bathroom uh like into my master bathroom so roof guy comes and it's we're

for a perspective we're recording this on july 13th uh so it has just been fourth of july you know 10 days ago or so uh the guy goes comes back out of the roof and he goes i found what's wrong with your roof and i go well great did you fix it he goes yes i fixed it and i'm not even going to charge you. And I go, what's wrong with you? He goes, I don't think you want to know. Because I don't think you want to know what's wrong with your roof. And I was like, well, now I have to know. What's wrong on my roof? And he goes, there is a bullet hole in it. What? What does this have to do with fireworks? Well, so he goes, there's a bullet hole. He goes, I, it's the second, he goes, I see it all the time in roof maintenance. He goes, what happens is people fire guns into the air straight up,

straight, not straight, because you can't do it perfectly straight, straight up in the air. And those bullets come down. Yep. And often, you know, miles from where they were fired. And so a bullet came straight down and put a hole in the roof, not 15 feet from where I was sleeping. And I read on the internet, the most common day of the year for this is the 4th of July when people are doing fireworks and they shoot their guns off in the air. So at some point on the night of 4th of July, a bullet, came through my roof. That sucks. To me,

like I did an AMA on the fireworks business during on the day of the 4th July, as one does when you own a fireworks company. And like, people are like, do you think fireworks should be banned? And I was like, actually, it would be a really bad idea. Because two things happen.

People use other stuff as a substitute for fireworks, like shoot guns in the air, which is, that's how you really die. Like, that's super dangerous. Because it's not, You know, it's not like getting a black cat, you know? It's like a totally different thing. No, so the fatality rate for a regular gunshot is 6 to 8%.

The fatality rate of being hit by a fallen bullet is 34% because it always hits you in the head. And so they either do that, so they replace fireworks with something they can get, so they shoot bullets in the air. Or the thing that's even worse than that is they make homemade fireworks. And like those homemade fireworks are not fireworks. they are bombs. And that's when you hear about somebody like, you know, like there was a deal where there was a big show

and somebody brought like a homemade firework to the neighborhood show and killed like a lady and like injured like nine people. And they're like, oh, it's a firework show. No, no. That was a bomb.

Somebody bought a bomb to the neighborhood picnic. A bomb show. Yeah. Like good. So that's part of why you want like, you want like a tightly regulated industry like we have now, which is, look, your options are,

prohibit them, and you're going to end up with people dying like crazy, like that kind of stuff going on, and it's going to be an order of magnitude greater. Or you're going to end up with like, you know, anyway, it's just, it doesn't work, right? And so fireworks and like other stuff,

it's one of those things you just need to tightly regulated. Alcohol is another one just like that. Like, you just need a tightly regulated industry. And that's the best thing for society. Yeah, I have to start making bathtub gin or something. Yeah. Yeah. Well, you know what happens when you do?

do that the wrong way. You go blind. Yeah, you go blind. Exactly. You don't want that. Like, that's, that's why it's tightly regulated. So anyway. Yeah, but insane. Bullethole my roof. And then the guy texted me later in the week. A picture, I don't know, maybe I, he was like, pickle at my shock, texted me another one. And he said if it happens like multiple times a week, around 4th of July. And I live, by the way, like in a nice neighborhood in the city. Like, I do not live in the hood. Like, I don't know how this happened. It really freaked me out. So anyway, that's my crazy home maintenance story. We can get back to the deal.

All right. So from Axiol, we have the premier Northeast helicopter transportation provider of corporate and private charter and tour. Summary, based in the Northeast U.S., our client is a helicopter transportation company offering corporate and private charter services and tour operations covering the northeastern U.S. metropolitan corridor. Our client has been in operation for nearly 20 years, launching their initial offering in 2004. the tours cover the tours cover northeastern cities and historical sites,

while the private charter includes destinations like the Hamptons, Atlantic City, Boston, D.C., and Philadelphia, to name a few. The company employs 51 individuals including 17 pilots operating a fleet of six helicopters. The company enjoys an exceptional operating reputation, which leads its sales efforts with existing clients. The company generates new sales through its website, referrals, and an extensive network of other businesses and vendors, such as Blade and TripAdvisor. the company operates in a high barrier to entry industry driven by capital intensity, regular regulatory policies in existing firm's reputation. In 2021, they did $8.1 million in revenue and EBITA of $2.6 million. Their EBITA margin was 32%.

In 2022, the revenue was $18.1 million, and they grew $124.9% to $4.9 million in EBITA with a 27% margin. They predict further growth of about 10% per year in 2023 and 2020. 24. The actual numbers are here if you're watching us on YouTube. Otherwise, you can click on the teaser and stuff in the show notes. They want to sell the whole business, or at least most of it. They are located in the middle Atlantic, New Jersey, New Jersey, New York, New Jersey, Pennsylvania, Connecticut, Delaware, Maryland. And then they're in this type of industry. So, Bill, tell me about your dream. Tell me about your dream of owning a helicopter, flying in a helicopter or helicopter company. Okay, so first of all, helicopters are cool, right? Can we all

green helicopters are cool. Helicopters are awesome. And they are phenomenally convenient. Yeah. Right? I mean, like, you can, it's as close as you can get to a teleporter, essentially, because you can land pretty much exactly where you're going and leave and go exactly where you're going next, et cetera.

Except, they're expensive and dangerous as hell, right? So, like, I mean, everybody knows Kobe Bryant died tragically in a helicopter accident last year, you know, like people die in helicopter accident. because there ain't no airbags. You know, I don't know. Michael, have you, how many times have you rid in a helicopter? I'm assuming it's more than zero. More helicopters than a private plane, actually.

I'm still zero for private planes. So if any really rich people here want to hang out with me, here's how to make it happen. By the way, there's a lot of premises around that whole thing that like who, assuming anyone was hanging out would be definitely a huge question. But like, I've still like, I've, you know, never been on a private plane, either corporate life or general. But anyway, I have been on a, I haven't been on a private helicopter like, three, four times.

A lot of the standard like, you know, honeymoon go, go do like a sightseeing helicopter flight and Hawaii type stuff. We've done that kind of thing. Yep. We did that in Vegas. We went to the Hoover Dam in our private helicopter. And it was awesome. I drove in a car to the Hoover Dam.

Yeah, like a chump. I'm so cheap. I was such a loser. Yeah, dude, it was awesome. It was not that expensive, too, by the way. You left from the strip in. a helicopter, just us, my wife and I on a pilot, flew us to the Hoover Dam, flew over Lake Mead, everything, like saw the whole, everything, land in the canyon. They bring out like a picnic

and a bottle of champagne and then take back off, fly down Las Vegas Boulevard, like see all the stuff up close. It was a thousand dollars. Yeah, that was my first thought seeing this. Like, I was thinking back over the past couple weeks, like several of my bicycling routes and stuff, go past little airports with charter operators in them. And it'll be like, helicopter ride, $30. And I was like, $30. I'm not going up in no $30 helicopter.

It's like, you know, brain surgeon, 50% off. I was like, I'm not going to that guy. Why am I going to the discount brain surgeon? It's the worst idea ever. So these helicopters, like you get in and you're like, this is an inverted lawnmower. Like it's basically got like a little engine and it's an upside-down lawnmower. And the blades go around.

That's, you know, I went through my personal journey of should I become a private pilot or not? And the telling moment was we went up in like a 35-year-old Cessna 172. Like my, they had me in the pilot sheet. My knees were basically in my jaw. Totally different if you go up in a CERIS or something that feels more modern. but like literally like I'm like I'm on a basically like a couch with wings up in the sky and the guy's like okay hey watch this and he just like turns off the engine and pushes it forward he's like I'm like what are we doing like I'm not interested in any of this it's so scary

it's not it's like turns out like you don't need like a nuclear reactor to fly through the air like it's pretty simple mechanics you know and like a simple engine and everything else is window dressing, like all the aeronautics and everything. But you can do it manually. All right. So let's go back to this deal. So what is there a lot about this? Right. So it went from $8 million in sales in 2021. Yeah. Which is post-pandemic, by the way. So what I would love to see is where it was before the pandemic. So in kind of the second pandemic year 2021, 2020 being the first one, they did $8 million. And then in 2022, they did $18 million in revenue.

And then in 2023, they are projecting they're going to do $21 million. So whatever the bump was in 2022 appears to be sticky. I mean, it's now July. So this is, and this is an up-to-date teaser. So it appears that whatever happened there was sticky. And I got to know, like, what was that? Yeah. Did someone else, the competitor go out of business?

Do they hire a bunch of pilots? Like, what did they do? I mean, sometimes you see this and it's like we got one new huge client. And one of the things that was here was they talked about a network of extensive other businesses and vendors such as Blade and TripAdvisor.

TripAdvisor pretty straightforward. That's Yelp for a Yelp that you don't hate as much. But Blade is an interesting one. So are you familiar with that business? Semi. Yeah, it's like it's Uber for helicopter flights. So there's a thing going on with those types of businesses when they're trying to get started, which is the VCs provide a

consumer surplus, which is they underwrite it and make it super cheap, so the market grows, and then they dominate the market, and then they suddenly raise their prices. That, by the way, was the enterprise, yeah. Congratulations, I just gave you the entire Uber business plan. It only took $42 billion, but now they have a pretty good business that's generating what. Like market, seven or eight billion in revenue. Yay, way to go, Uber. But Blade is interesting. It would not surprise me if you looked into this and Blade is trying to grow the market and has gone from 10% of their business to 80% of their business very quickly. And explains why they went from $8.1 million to $18 million in a year, which is incredible

growth. Absolutely. So you think some, you know, JPMorgan Chase or something suddenly got these guys on speed down? I would take a look very closely at customer concentration and sources of it. I mean, they sound like they are a standard charter operator, which is like, oh, you can pay us money. What do you need us to do type scenario? I would want to understand why did they go from $8 million to $18 million in revenue in a year?

So 124% growth. And then second question is that, why did they think that's sustainable through 2023 and beyond? What's going on here? And if it's all dependent on VC funding, I would be like super worried. Yeah. If it's all coming from Blade and, you know, you find out that Blade's not charging them any fees or something, which is allowing them to keep their prices down, then you got to go, eventually Blade's going to jack up needs to make money. And we're going to have to jack up our prices on Blade and we might not, you know, be able to capture all that demand.

But like on the other hand, if it's Blade and a bunch of other things, maybe there's other platforms, right? You have very, you don't have the customer concentration risk. If you're just getting new clients all the time every day, I want to. hand, you don't have the risk. On the other hand, they're probably all one-time clients. Or, you know, they're not like these big, sticky corporate contracts where, you know, they stick around for a long time, which is always the catch-22, right, of a big B-to-B relationship. Like, great. J.P. Morgan Chase flies all of their executives on our charter thing. But what if they stop one day? We're screwed. Yeah, 100%.

You know, so it's really great. It seems sticky. And you wake up every day and you have guaranteed revenue until you don't. Yep. So let's talk about the dynamic. of running an airline, which is basically what this is. The reason airlines are tough is you have these high fixed costs, and it's very easy for your revenue to go down 10% and your profits to go down 100%. And so that's why you see the airline and all these different folks doing this sort of stuff. And I think this was very similar. Remember the charter airline that we did that was like bringing stuff in from Mexico?

I like that business potentially better than this one. But anyway. Well, why is that business better than this one? They're just using planes and these guys are using helicopters. So the reason I like that is because of the nature of cargo. And with people as cargo, you fly it when the people want to fly. And typically you have to find the right balance there. And so you have a time supply demand like melding there.

That's difficult. Whereas with cargo, like, does it matter if the cargo gets there at 2 a.m.? Or does it matter if it gets there at 9 a.m. or 3 p.m., like you have better kind of time slicing around that stuff. And the thing I think I also liked better about that business was how they had created a marketplace where they were like doing backholes from Mexico and vice versa. And so you got more benefits of scale there because the important thing was if you're going to fly charter stuff down to Mexico, you need to have some fruit or something to bring back

to pay for your flight back and that makes you very profitable. Whereas something like this, like this is just a straight up charter operation. Like you, it's going to be much more difficult for you to, you know, not have a bunch of deadheads and stuff like that, as the truckers call it. Right. Because if you got two rich dudes, you can't put them in the same helicopter like you can with the freight. Right. Yeah. Yeah.

Yeah. The other thing, to your point, Michael, about trying to match the supply of pilots and the demand of people who want to ride in a helicopter, they have 17 pilots, but only six helicopters. So that's speaking exactly what you're talking about. Like all the pilots are not available all the time. So it's mix and match. It would be interesting to see what they mean by employ. Like are they 1099 contractors? Are they straight up W2?

Like are they full time on the payroll? I don't know enough about this type of business to know that. My guess is a lot of them are independent contractors and that would be much better in terms of you being able to scale. Because what could make this business great or terrible is what do my fixed costs look like and can I scale them up or scale them down as I need to. And so, I mean, as I've dealt with more of these people that are like these small-time private pilots or pilot instructors and stuff like that, they're like in this perpetual hustle type thing.

And I don't know if I told you this story, there's a guy here in San Antonio that because he can make more money being a lawyer in Dallas, he owns a law firm in Dallas. Did I tell you this story or no? No, and he just wants to live in a lower-cost area in San Antonio? Well, so people want to live in St. Antonio, your family's here. Because it's awesome. I forgot. And it's amazing.

Like, I live here. Like, yeah, there you go. And, you know, and if, like, I think about moving away permanently and I'm like, well, I miss all my friends, you know, and like, I like my activities. Do I want to get the heck out of here in July, August? Definitely. But the rest of the year, like, it's pretty amazing. And so this guy, what he does is he has a, he owns his own plane.

So he spent like a half million dollars on this plane. It's a twin engine plane. He cannot fly it. But what he does is he hasn't parked at the little teaching airport here. And he hires the instructors to load him up on his plane, 6 a.m. on Monday morning. They fly him up to Dallas to the little airport near his office. He gets in his car that he has parked there. And he drives to his office.

He stays in his apartment that he has there until Thursday night. Thursday night, the instructor who has by then brought the plane back here to its hangar, then flies up there, takes 35 minutes in the twin engine plane, picks the guy up and brings him back. And like, okay, yeah, is that good for the environment? Not really. Is it freaking awesome, though? Yeah, it is totally awesome.

But like, so let's dig into who the little pilot is. The pilot is a guy who's older than us. He's in his early 60s. He's an instructor. He wants to pick up hours. And like he's happy to fly up there, get paid to do what he does. and what he loves and get paid $100 an hour to fly this plane up and get this guy safely back and forth

from here to Dallas. And it's a good trade for the Dallas lawyer guy because he can charge double there what he charges in San Antonio if he can even do that kind of work because there's some work that only happens in the really big markets. So, yeah, it's just, but like that person, like that instructor, he does this kind of charter operation. He flies for other charter operations.

He, like, teaches lessons. Like he's just picking up hours wherever he can be in this time, sort of. Yeah. And that's when I actually, when I did the Vegas thing, I was talking to the woman who was flying us. And that's what she said. She was foreign military. She was foreign military helicopter pilot.

And she did this like, you know, in part time. Yes. Pick up doors. It was like, you got the sense she was like half asleep. This is like the most boring thing she had ever done is shuttle me and my wife to the Hoover Dammit back. She's like, nobody's shooting missiles of me. This is fine.

The time I actually did the, uh, train like the the exploratory the discovery flight i did one up in bentonville arkansas and like my instructor so this a 30-year-old plane my instructor was like a 22-year-old young man and then i he brought along a lady i was like oh who's this and he's like oh she's a trainee instructor and i discover later she's 19 years old i was like i was like okay cool well at least you guys won't have heart attacks while you're flying me around like but yeah this kid was just uh he was an instructor he's just trying to get enough enough enough hours to get his whatever part 42 or whatever the license is so he could go fly for one of the airlines. That was his just dream. Yeah. You know, so I also wonder, you know, I don't know if

helicopter pilots fall into the huge shortage of trade professionals, you know, plumbers, et cetera. But if you don't have pilots, you're up creek. If there's, you know, you're this business. And I imagine the pilots probably have a lot of power about which company they work for. So I'd want to understand the employment dynamics of how I pay these pilots. are they W-2? How much do they make? Do they hop around all the time or am I pilot's pretty loyal, et cetera? Yeah. Ultimately, I think two things about this business as we kind of wrap up on it. Like, number one, like, I think it would be a fascinating and super fun, like, management call

because these are types of ones where you're just like, oh, how does this work? Okay, how does this work? And that's, and for those of you listen to the podcast, that in my opinion is the fastest way to learn about how a market like this works. go do like 10 calls with sellers and ask them everything about like the helicopter charter thing. And after 10 calls with people who've been in the business for 20 years and them telling you, selling you their business, you will know more than any like journalist or expert. Like it's the fastest path to do it. Maybe it'll be my hobby when I retire.

Just interview people. Just like, yeah, just interview people with their business for sale. And they do it under NDA. So it's like it wouldn't make a good podcast, blah, blah, blah. But anyway, I think the second thing about, you know, the second thing about this deal is, I think it has an opportunity to actually be a good business if there is some sort of limitation to supply. Some sort of moats here, competitive modes other than like we just got lucky with our blade contract. And that's what kind of worries me.

So I would really want to understand what are the competitive advantages that keep some other chump from buying a helicopter and competing with you? Like, is it scale? Is it how you're getting deals? is it brand in the market? Are you safer than the other people? Can you do bigger transport or are you more on time? Like, what is it about this business that doesn't make it a red ocean?

And otherwise, it would worry me that these numbers, which are not that aggressive for growth. I mean, they grew 130% and now they're predicting 10% growth. Like, when you see a seller do that, you're like, wait a second. Like, what do you know that you haven't said here in the teaser? Like, I would want to find out kind of the dynamics. that stuff. So anyway, I think I did a good job of not pooping on this deal. I kind of like it. No, I kind of like it too. You know, it's interesting too, so it operates in the Northeast. It doesn't explicitly say New York, does it? It just says the Hampton's Atlantic City, Boston, D.C.

In Philadelphia, down in the geography, they list New York State, but they listed alongside New Jersey, Pennsylvania, Connecticut, and some other. So I wonder if there is something about New York City, because there's always something about New York City, you know, with the unions and the regulation and how they feel they have their own practical laws. Like, I wonder if these guys aren't licensed to land in New York or fly over New York or who knows what. Like, I wonder if there's something to understand there as well as far as what geographies, not just New York, but in general, what geographies can we operate it in? What does it mean to expand a new geography? Do I need a light one? Do I need whatever it might be? And in some cases, it's probably good.

if it's a huge pain in the ass, you expand into a new geography, because it means it's a huge pain in the ass to expand into your geography, you know, that you're already in, the competition. So I would definitely want to understand about that if I want to make this a bigger business. I think you talk about markets that you want to be in in the United States. If you wanted to do helicopter transport, you want to do it in the densest, most crowded part of America with the most money per capita. Like, yeah, you want to be in the tri-state region.

So I love that aspect of it as well. Yep. Yeah. Somebody should go buy this and then come pick me up. Well, let's talk about buying it, right? So it's, it's five million in 2022, EBITDA. It's, they think it's 6.6 million in this year's EBITDA. So kind of in the middle, it's 5.8, say, of EBITDA. It's got 32% EBITDA margins. I assume some helicopters are going to come with this and they're not going to make me buy the six helicopters extra. But six helicopters not worth nothing. You know, But you also can't have a business without him. They are, helicopters are as stupid simple as like a Cessna is, which is just like a couch with some wings and a, you know, a naturally aspirated engine. Like helicopters are these incredibly complex machines.

Like, that's why it took us another 40 odd years to figure out how to do helicopters right past when the Wright brothers flew. Like, these are, these are some serious ass machines that, yeah, all that gearing and how they do stuff and the, you know, jet turbines. It's a serious deal. Yep. So I imagine this is, do you think this gets valued just like a normal business and you get the helicopters as working capital? Or do you think that you got to pay for the helicopters separate?

I bet you, I think EBITDA is, this is a real misdomer for this business because DNA are like a huge expense to maintain those helicopters that they own. So I would be, I think that's the first place that this would get valued is basically. on free cash flow as opposed to EBITA, just because it's not like depreciation and amortization are free here. You're having to spend them every year to make sure those helicopters don't fall out of the sky.

So I think it would then get multiple, you know, I would guess it would get valued based on a multiple, just of that SDE. That's how I would do it. Thank you for saying Mills's line about CAPEX being a real expense, even though he's not here with us today. Yeah, I mean, I think it's,

I think this business is absolutely saleable. I wonder, do you think this sells to a strategic as an add-on, or do you think just to buy the routes, essentially, or to buy the brand? Because I would think there's a ton of synergies. I mean, they say they've got 51 employees and only seven of them, 17 of them are pilots, right? So the rest is booking and admin and maintenance and all that stuff, right? Which I would think scales incredibly well. for sure well and then facility they probably they probably either own or lease a hangar facility

somewhere in the tri-state area teeterborough or something like that um those are all those are all likely that's when you know somebody's a real baller when they're like yeah i got to drive to teeterborough yeah as soon as they say teeterborough it's like it's like saying you go to school in boston it's like code for home of that is uh for those of you that don't know that is the closest uh private airport private general aviation airport to midtown manhattan so teeterborough if you're going to be. So basically, yeah, if you're a real baller, you don't go JFK to L.A., Bill.

That's for pedestrians. The real ballers, they go Teterboro to Van Nuys. That's how you get from New York to L.A. Two airports I've never been to. Same. Same. Yeah, I mean, I like it. I don't, I feel like there is probably an established market for these

and ebidom multiple that I'm not privy to. And that's the only thing that's tough as a non, you know, professional in whatever industry you're dealing with with an axial deal is that the actual deals are more sophisticated so they don't have asking prices. So you just got a bit. 100%. Well, and this is right down the middle of the fairway for the why am I the lucky buyer, you know, answer. And, you know, why am the lucky buyer maybe like you're willing to do some pain in the butt stuff that other people aren't. Or it may be that you're just an idiot who's overpaying. So those are some answers to why you're the lucky buyer.

Right. But, you know, I think that's my favorite question, top to bottom. And any deal I'm doing is like, why am I the lucky buyer here? And, you know, I think that's something I would consider, you know, when I'm in a call with the seller, I, you know, I'm not above asking, like, who else has looked at this deal? Why has everybody else passed on it? Why aren't the strategics buying this? Surely your helicopters and staff has some value. Like, why are you talking to some chumps that don't know anything about aviation?

that's also a good way to me to get them not to take me seriously but it's true i mean it's like i'm not gonna i'm not gonna lie to them yeah like you haven't already called all the other helicopter companies when these geographies and why'd they all pass yeah why'd they all pass tell me why yeah yeah i like this one though i think this is you know this sort of reminds me of a again like another classic whole co company where you know the the demand for this isn't going anywhere until they invent actual teleporters, you know, like this business is going to be around. Helicopter, private transportation is going to be around. Yeah, I think I saw at one point tiny Capital bought a, like an emergency transport company, and it was on their website for a while, and then it's disappeared.

So I don't know what happened to it, but I remember seeing it on their website as like a random, random business there. That's a totally different episode. I have looked at those before. man i hope our i hope our offer we're making in our previous episode comes through that would be maybe that makes some good stuff i'm ready to get out of a plane to go do the diligence on that that is about as opposite from private helicopter charter as there possibly could be is worm farming if you listen to our other episode oh yeah anyway we're we're yeah i think the future of this podcast is we all we all go in and buy something something super unsexy like a worm farm The worm farm is sexually unsexy.

That's what I love about it. Especially. Yes, I agree. I had a good point about this and I totally forgot it. Oh, man. Anyway. Anyway, tune next week. By then, Michael might have remembered.

I remember what's going on. Get over all my problems. Yeah, I'm sure I'll remember it. Yeah. Okay, well, great job today, man. All right. This was a good one. Thanks for listening.

We'll see you guys on the next episode of Acquisitions Anonymous.