Acquisitions Anonymous - #1 for business buying, selling and operating - The $9M Vegas HVAC Business With a Secret Inside

Episode Date: June 17, 2025

A seemingly great HVAC business in Las Vegas takes a twist as the hosts uncover surprising details.Business Listing - https://www.bizbuysell.com/business-opportunity/keys-to-las-vegas-casino-hotels/2363607/💼 Sponsors:Acquisition Lab – Ready to buy a business but unsure where to start? Acquisition Lab, founded by Harvard MBA Walker Deibel, offers elite support for buying your dream business. Join a world-class community and access exclusive resources. Get your free consultation at https://www.acquisitionlab.com and tell them Acquisitions Anonymous sent you!Franchise Consulting with Connor Groce – Thinking about buying a franchise? Connor Groce is a franchise expert who owns and operates several franchises and helps others find the perfect fit. Join his newsletter at https://www.connorgroce.comIn this episode, the Acquanon team dives into a Las Vegas-based HVAC service company listing—initially appearing as a promising deal with strong financials. With guest Travis Jamison joining the hosts, they explore the business’s margins, customer concentration, and ultimately uncover that the “HVAC” label may actually refer to a more niche and fire-safety-related service. Things take a surprising turn when they accidentally identify the owner behind the listing, shedding light on how critical relationship-based contracts and context can be when analyzing a potential acquisition.Key Highlights:- HVAC business listing with $9M asking price and $2.4M in cash flow- High customer concentration with large Las Vegas casino clients- Discovery that the business might actually be commercial kitchen exhaust cleaning- Concerns about the accuracy of financials and potential underpricing- Discussion on how relationships drive value and risk in service businesses- Financing challenges for businesses in the $5–9M range- Broader conversation on the changing face of Las Vegas and its impact on service demandSubscribe 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]

I worked at Disneyland as a teenager and we didn't have cash registers that added things up, believe it or not. And so we always had to do it by hand and I was very good at the same thing. I know exactly how to add big long lists of orders and numbers and no calculator. Just got to figure out, you know, like are these real contracts or not? They're probably not. You know, I mean, I think they probably like execute contracts for their jobs. But I don't think it's, you know, like a department. of defense like indefinite delivery indefinite quantity type contract where you can go hey we got

10 years worth of an income stream off with this and all we have to do is just you know not screw up hey michael here welcome to acquisitions anonymous internet's number one podcast about buying and selling small businesses today's episode was done on a biggest deal that we inadvertently figured out who the owner was because it looks like he's selling it himself. So we're joined by our buddy Travis Jameson, who is part of CapitalPad, cool business. You should totally Google it and check it out. And we really had fun. And this one took a twist at the end. So stick around and see where we went. And I hope you enjoyed the episode as much as we enjoyed making it for you. Are you ready to take a leap into 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 Dibble, 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, longtime 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. This is Oceans 11. This is what it is. All right. So this is for BizBicel. Keys to Las Vegas Casino Hotels located in Clark County to bottom. The asking price is $9 million and cash flow is $2.4 million for gross revenue of $4.9 million.

And the EBITA is $1.7 million. So, man, this is actually one of the first times we've seen EBITI cash flow like broken out separately by the broker. That's great. And there's no serial difference. Yeah, $700K in Bita. That's a technical term. All right, inventory of $350,000 established in 1992. This is a profitable HBAC service company for sale.

The HVAC company has been proficient in service installations, maintenance repairs with Las Vegas and surrounding 250-mile radius since 1992. Sales have consistently increased mainly stemming from large hostelow casino contracts and by franchise referrals from satisfied customers. the robust record dating back to 1992 along with a dedicated team of professional technicians and support staff. This presents an excellent opportunity for an acquisition or for an organization or individual capable of ending in a strategic marketing techniques for a well-establish brand. Feel free to get in touch today.

60 employees, and it's a turnkey business with key employees and a 10,000 square foot building plus equipment and vehicle yard. They are regulated by law for fire risk mitigation. This specialty service market is considerably expanding with abundant opportunities. Las Vegas is ranked as the highest growth market in the industry with considerable hospitality and entertainment drivers requiring a space in the HVAC's specialty service industry. The owner is selling because they are retiring. So that is this age fight business.

So Heather, do you understand what they do? I'm a little confused there at the end. Yeah, they've got some big contracts with casinos and hotels. And it sounds like in order, I would guess, in order to be able to service those types of facilities, they may need this special fire, you know, certification. Maybe they do the sprinkler systems. Maybe it's all in the same duck work or something, but it sounds like it's a little bit of a combination of, you know, fire protection services as well as HVAC. That's my guess. Yeah. And then Travis, they're asking $9 million. A cash flow is $2.4 million. So that's

3.75 times cash flow. Is that right? All right. Your math seems mathy. So true story for you guys as a kid. I grew up in a fireworks stand. I would work fireworks stands every summer. And we had no calculators because we were broke.

So I had to get really good at mental math. But by the time I was 17 or 18, I could look at like a bag of fireworks and I could just like tell you what the price was for all. I think I was like, can I tell my old person story too? I worked at Disneyland. I worked at Disneyland as a teenager, and we didn't have, we didn't have cash registers that added things up, believe it or not.

And so we always had to do it by hand, and I was very good at the same thing. I know exactly how to add big, long lists of orders and numbers and no calculator. Guys, can you explain this to me? I mean, like, we're calculators and cash registers, like, super expensive in the day? Yeah. Probably. No, calculators used to be really expensive. They were.

The TI calculators were like $150, $250 back then. So they were like $4,500. But those are like TI calculators. Like you just need like a little plus and minus thing for fireworks, right? We didn't have solar power calculators. Like solar power calculators showed up like in the early mid-90s. Like the-manchle, you didn't have a calculator on your phone? Yeah.

Yeah, I would just take the number pad of like type in the numbers. The phone was in the kitchen. Okay, so no. Yeah, and then like cash registers, like the cheap cash registers came around like the early 2000. We could get like just a bare bones one with an LED display for like 600 bucks. And you couldn't even like program those. And I've heard Munger talk about, you know, the, what's the cash register guy that started national cash register company? I've heard him talk about him a million times of how much money a cash register saved a business just from theft alone.

kind of surprise the place like Disney World wouldn't have that like standard at the time. That's crazy. Yeah. Theft used to be huge. So, so Mills, this place is selling for 3.75 times cash flow. This is ridiculously low for each piece.

For this size, too. Yeah. Customer concentration. Yeah, that's what I'm going to say, Travis. You beat me to it. Yeah, they've got four customers.

And so you can only price it so high. Yeah, it's Las Vegas cuisine. knows. Yeah. It's four big ones. Mm-hmm. Yeah, they kind of hint there. This is, they talk here about an individual capable of implementing strategic marketing techniques for a well-established brand, which to me screams, we have three customers.

Those sell something. Yeah. And there's, there's not any new customers to get. Like, there's the four owners or three owners and that's it. And they can maybe build a new hotel a decade from now. Well, that's the thing people don't talk about. There's, you know, The strip is like 90% to owners. They all look like they're different brands, but it's, you know, Caesars or NGM and those are your two options.

And then there's some oddball ones like Treasure Island and stuff like that, but by and large, this is, but is the customer concentration so scary here? You know, I mean, you know, it's Vegas and that's it.

You're going to have a customer concentration. Doesn't mean you're going to lose those customers very easily, I would think. Doesn't mean it's not a great business. Yeah. Yeah. I did say you have to figure out, you know, like are these real contracts or not? They're probably not, you know?

I mean, I think they probably like execute contracts for their jobs, but I don't think it's, you know, like a Department of Defense, like indefinite delivery, indefinite quantity type contract where you can go, hey, we got 10 years worth of an income stream off of this and all we have to do is just, you know, not screw up. I think this is probably a little bit looser than that. But, you know, the head maintenance guy at this company knows the head maintenance guy at the hotel. And as long as, you know, you're keeping those two people happy and not giving them a reason to, you know, walk out or for the hotel to go out to find somebody else, there's a lot of like institutional knowledge. Let's just say they're the ones who installed this equipment, you know, the HBAC equipment. They know all the quirks. They know kind of where the bodies are buried. there's probably some credentialing.

One of the things we have to deal with a lot is credentialing to get into secure facilities. And so they probably do background checks on all these guys. They're not just in the slot machine area. They're going into the guts of the building. So I think there could be something here. I think part of a lot of it depends on how long the contracts have been valid. Have they been servicing it for like the last 15 years? Well, that makes me feel a lot better.

Has it been three, two? Like that's a little different. Some of these buildings are old on this trip. So they just are in the process of renovating the Mirage, which was built in the mid-80s. So it was sold to the folks that own the Hard Rock, so the Seminoles. And they're taking it from the 80s to the modern time. And that was a 40-year-old building. And it's still standing.

So good chance they're still the same HVs. HVAC is in there from. what it was built. The nice thing about this is it's an incredibly hot climate. You have to have HVAC. And short of somebody else coming in, like, it's kind of funny because this reads like just a normal HBAC deal until you get to the competition, which you would expect, I mean, this is a competitive market. There's some massive, massive residential service HBAC contractors in, you know, this part of the country. But, They don't really talk about any of that.

All they talk about is this kind of quirky fire certification thing. My only concern would be, you know, how easy is it for somebody else to come in and compete away some of your market? Because this is, I mean, this is almost a 50% margin business. The revenue is only $4.9 million. Sounds tough to compete here. Like you said, I'm sure they're doing the background checks and all the special licensing. And not to mention a Vegas hotel, it's not like the little office corner store. you know, like commercial HVAC system.

This is a hotel with like thousands of guests and God knows how it all works. I have no idea, but this is a very complicated thing. It's got to be like blueprints to it, I'm sure. Oh, yeah. Yeah. And I mean, it makes me wonder, given how kind of small the revenue is, maybe they're not doing regular HBAC. You know, maybe that they're doing kind of a subset of mechanical work,

then they just say fire risk mitigation. but if this was a sprinkler business, like if this was a fire suppression business, they would say that. And those businesses have been, like, rapidly consolidated in the last decade, and it was kind of a heyday for a roll-up. It says franchise referrals

from satisfied customers. Is it a franchise? Or is it from, like, the other hotels? Where do you see that? I don't see it. Sales have consistently increased, mainly stemming from large, hotel casino contracts and by franchise referrals from satisfied customers.

It is a franchisee. I'm more wondering if that's like, referrals. Yeah, I don't know. Maybe it's like shared ownership. Like, you know, to Michael's point, there's not that many distinct owners, you know, like in terms of the end owner of these assets.

So maybe that it's like, hey, the maintenance guy at this hotel referred me to the maintenance guy at the other hotel. and they're under different franchise brands, but at the end of day, they're owned by like the win or whatever. It feels like there's something we don't know because it just doesn't make sense. It doesn't make sense that this just looks too good.

So there's something missing. So I would be really curious. Somebody should figure it out. Not easy. Definitely you go to. It says the business is listed by Scott Foster. And usually when the business is listed by a broker, they have a picture and like a link to their website.

and stuff. I'm wondering if Scott is... Is that the owner? You want to sell out of me, Michael? I'm Googling it. Las Vegas. Business broker? Well, here he's listed as actually a business broker. Scott Foster Business broker. Oh, wow.

Lusley works in Florida. He has the standard picture, the handshake. For those you can't see. Yeah, no idea. Ooh. It's a pretty common I think so.

Uh-oh, you did. Well, I just Google. I was Google of the broker, and I think the guy's name came up. Yeah, so maybe this thing is going as himself. They say fire prevention, commercial kitchen exhaust cleaning. This makes a lot more sense. Commercial kitchen exhaust cleanies. Okay.

That is a fire safety measure because, you know, if you have grease in your hoods, they can catch fire. And notes are ventilation. That's where he gets HV. He's just trying to say HVAC so all the private equity guys come knocking. Hey, hey, urge had an HVAC. Is it for sale? Can we buy it? So this is really interesting.

Okay, so these guys are not doing straight up HVAC. They're doing commercial kitchen exhaust cleaning 27 years later. Hey, everybody. If you've listened to the show, you've probably heard us talk about franchises. While franchises can be a great path to business ownership for the right person, like there's a lot of pitfalls, and it's important to be really careful as there are certainly good franchises to be in and bad franchises that you don't want to be in. Connor Gross is a friend of the pod and a resident expert on franchises, and Connor not only

owns and operates his portfolio of multiple franchises, but he's also a franchise consultant and helps others work through while picking the right franchise for them. So as he's sponsoring today's episode, everyone should totally click in the show notes below to join Connor's newsletter and attend one of his gateway to franchise ownership workshops. If you're ready to move and move quickly, schedule a call with Connor and his team today. I worked with a client that bought a business like that. I invested in a commercial kitchen repair service. There's an interesting tidbit in his, go back to his bio, Michael.

It says that his, most people in their professional resume don't, they don't like talk about their dad or something. But go back up, Michael. son of Harold P. Foster, former director of city planning, whose term span 30 years. So this guy is like woven into the DNA of the strip. Las Vegas.

I was going to say something like that. You know, there's a lot of, why are the margins so good? You wonder in a place like Las Vegas if it's, you know, cronyism or whatever, however you want to call it. You know, they have special deals.

They cut for people. seems like something like that. And that would make it a lot harder to transfer, I think. Yeah. Imagine how many steak dinners worth of goodwill have been built up here over 30 years. That's right. Well, I learned everything I know about Las Vegas

by watching the movie at Casino, and it's a pretty corrupt place. You were not in that movie. That's good. Actually, I was out there last week for the weekend, and I went by myself, because none of my friends could go. Don't call me a loser Mills.

I know you're thinking. You went to Las Vegas by yourself? Hell, you go. It's great. Leisure? No. First of all, I felt like a child there because everybody is like boomer plus, like super old. Because they're seeing a bunch of weird trends out of Vegas. Like, young people aren't going anymore. Their numbers are way down.

But it's interesting because the average age of visitors is going way down. And it's like, well, why is that happening? Like the share of 20 to 30s, 20 something's going to Vegas, like, they're not going. Like, they had no interest in it. It's too expensive. But the average age is going down. And the reason the average age is going down is because Asian American and Hispanic American

families are all coming and they bring the whole family. So each kid counts towards that visitor number. So even though you walk around and everybody looks like a fossil, like the average age is going down because every fifth person is like a family like 12 with kids under 10. It's pretty fascinating. It's crazy how Vegas is just. just like changed over like every couple decades like the whole vibe changes from like it's a sin city it's a family place now it's old people and now it's it sounds like little kids happening

uh that's happening and then a lot of it just feels like parts of it are time has passed by they just haven't figured it out yet and so one of the things i did because i'm a business nerd is i went to walk to the win which is like super high end like bellagio plus plus has a clearing dealership in it. And it just felt like the world had changed that people didn't want that kind of ostentatious wealth in the U.S. anymore that kind of applied. And they were still trying to play the same game. And then I went over to Bally's, which by the way, felt much more like my people

because it's like way down, it's like seven notches down market. So slightly above like circus, circus. And I was like, okay, these are my people are for comfortable here. And like that felt like more genuine. And I saw more young people there. Like it felt like a place where you could actually get. it didn't feel so fake like the wind did. I don't know if that was good content or not, but it was my experience.

Did you notice Vegas looking a little sparse? I'd seen reports of, you know, it's already hitting Vegas. Like the, you know, they're kind of like the really early recession indicator or something like that. Certain hotels had already stopped like ballet services and we're cutting back on all kinds of things. Did you get a sense for that? It definitely felt quiet. It felt quiet and it felt old. It did feel also like they're really pushing hard to try to maximize revenue.

Like most of the hotels have gotten rid of free parking. Only a couple hotels still have free parking. And then if you go to NGM, I went down there and I did not like what I saw, which was NGM was basically had a bunch of young people in T-shirts trying to sign up every person under 35 for their app so they could take Gambway home with them. And it just, you know, like they try to give me out. I was like, guys, I am not taking gambling home with me. Like, this is not happening. I have to pass that.

And then they had another deal where they were trying to sign people up because they're starting to live stream casino games out of Vegas over the internet. So you can play roulette and blackjack and all that kind of stuff. But like there's like dealers like dealing people all over the internet playing casino games from home. And it just felt like that's one of those things. It just needs to be not so easy to get to. Like it should exist. You should be able to drive to Vegas or any casino or whatever to do it.

But it shouldn't be like just take roll over and flip on your tongue. It just feels like it's going to hurt a lot of people with that level of availability. Yeah. And sports betting too. Same thing. Yeah. Yeah. By the way, I won $100.

Are you addicted now? No. What about the increase of like gambling addiction has been over the last just few years with like the sports betting increase and all that stuff? It's just so easy now. Anecdotally, it feels terrible. Feels terrible, yeah. Interesting, Vegas numbers are that the total number of gamblers has gone down, but the average gambling amount per person has gone way up.

The average visitor is spending like $880 in total wagering or visit, which is gone up. Yeah. Okay, I mean, anyway, sorry. This guy, going back to the business, what you're saying, You think that this business is like a falling knife? Is there a risk that... I don't think there's a risk that these services go away,

but is there a risk that, you know, there's less demand in terms of total volume? I think that Vegas is the perfect example of unbridled capitalism winning in the end. And you're seeing it right now. Like, the money is chasing and going where people are going. Like, you're seeing fewer shows. more experiences. You're seeing the gambling experience changing to meet the needs of different folks.

And like one of the one of the things they have seen is like the number one reason for young people to go to Vegas now is not just to hang out. Like it was like Heather, when we were young, maybe we'd go to. Yeah, yeah. Like, hey, let's go stay at the circus. Like young people don't do that anymore. But they do go for bachelor parties and hen nights and like somebody's graduation or some celebration. Like I saw that a lot. 21st birthday, like the whole family was there. So what I think is Vegas, because of this, like the almighty dollar is going to shift totally, and you'll just see a different Vegas. Like Travis, you're saying 15 years from now. Like I think they'll just show up the times.

And conferences, it's still a good conference hub. Great. Yeah. So I think it keeps that. But I'm worried about this business now, knowing that there's a lot of relationship involved. And when we look at those margins, that kind of answers the question why the margins are so good. that this is not so transferable. Here's one for you, too.

This guy's young. This is, I mean, this business is kicking off a couple mill a year. Why sell for, you know, 3.something X? So you graduated high school in 84, so I think she's almost 60. Oh. All right. Well, that picture is quite old then, yeah. Yeah, that's an old picture, I think.

But, you know, there is a way, let's say best case scenario, the bull case of this is, you know, Scott wants to retire, but he's willing to stick around, he's willing to transition the relationships. He's not asking eight times, you know. There's a realistic path towards kind of getting, you know, your principal back. This is definitely a financeable business, right? Heather, I mean, short of some catastrophic customer concentration. which maybe even some lenders too do comfortable with. I think they could if, yeah, I think they could just because of where it is and the fact that you've only got so many casino owners

in the town and that's what they specialize in. So I think, but you have to go kind of low leverage. This is not a business. You know, you would get a lender on board with a high leverage. And it's a little too big for SBA if you're going to pay the $9 million for it.

You know, SBA only goes up to $5 million. So, you know, if you can come up with the other four, maybe you could use SBA, but you probably end up with some kind of conventional loan on something like this. And it's a little tricky there too because the conventional lenders, they generally start at $3 million EBIT.

SVA kind of ends in a $5 million loan amount, but conventional usually starts at a $3 million EBIT. So there's kind of this no man's lamb gap in there. And this is kind of in that. So there's a little bit of a challenge maybe with what type of debt you would end up with. The upside, I think, if you can get some more traditional financing, is you could do the seller note here. I'm not so in a solo rollover.

Like, you want this guy to own part of the business for the long term because he's got all the relationships. You know, we're having problems. Can you just call this guy? Yeah, I got this. So I have a prediction about this one. If anybody goes to look at it, I'm going to predict what's going to happen. But then we're coming up with time, so we should rate it after reputation. My prediction is that these numbers do not stand up when somebody gets a quality of earnings done.

I bet they are radically different than this when your Q of E comes in. and it's really priced at seven times earnings. That's my prediction. So for that reason, I'm totally it. This seems like a great deal. No, I love the business, but I think that's what's going to happen. Like, that's just, it just smells like the numbers are going to be, going to be funky. So, Mills, what do you think?

I'm dying to talk to Scott. I think it would be a really interesting conversation. I don't know that this is, you know, it's not a very transferable business, but it's not impossible. But I would think that talking to this guy would be, really, really interesting in terms of just getting in the arena, you know, and take him a deep dive on a business. This would be really educational. Yeah, Heather, what do you think? I think there's a good business there. I do tend to agree with you. The numbers might not be right, especially for sale by owner. They just may not have represented the numbers correctly here.

So I'd want to get at that pretty quickly. But I think there's a deal there. I think there's a good company. Like maybe it's the right structure, roll over equity, something like that. And Travis, what do you think? And would this be a good deal for capital pad? Probably not. I think the little details really, really matter here. If all the things we're assuming is true, then no.

Like, you know, if all the relationships are built on the seller, well, we can't do that. If it's two customers that haven't been around for a long time, fine. But there are scenarios where it could be, but probably not. Totally dig it. All right. And hey, Scott, if you check in on this, please don't come find me. I live in South Carolina, Columbia. You go to ask me there.

I own a roofing company. But we wish you the best of luck, Scott. And sorry for outing you. We didn't intend to. That's one of the things we don't do. But your name came up when I tried to Google it. I'm so sorry about that. You thought you're

Crosker. Yeah. If you want to talk to you, you'd got to come to Columbia. Bye.