This company does VERY sub-prime “leases” for POS transactions (tires, furniture, eyeglasses, etc). If a customer doesn’t qualify for the store credit card these guys step in for “lease to own.”
Markups are in the 100% context. Last year they established $195 Million of new leases and collected over $210 Million of lease revenue.
Senior debt of $65 Million; Jr debt of $10 Million.
What’s your overall value for the business?
BTW, I fully realize this is NOT a “small business” ...
Final note: I would think this is right in the @ConorNeu wheelhouse
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Yesterday’s Value That Company!
Also, Why am I so dumb?
Finally, Why listen to me? 🤷♂️
Here we go!
A few years ago, I get a call from an acquaintance (we have several mutual good friends). He’s running a fast growing consumer finance company and needs cash...
It isn’t “I need $5 Million by Friday” but it’s close...
How fast are they growing? By the time we are negotiating the deal a week or 10 day later, the ask is up to $10 Million...
This company has 10 employees that run around the world refurbishing woodwork (mostly tables) in Apple stores. Most of the expense (labor, travel, etc) goes into COGS.
My thoughts tomorrow, but I can’t wait to see what you come up with!
Also, a final note from last week on the Pest Control deal ... Did you know that per the Department of Agriculture, Pest Control is an “essential service?”
The challenge here is the zero growth unless additional capital is provided. So there are three options:
A) Sell to a strategic (another pest company). It’s well established in this industry that these companies can be had for $1.5x ARR so in this case ~$15 M
B) They could not sell, in which case I think @guessworkinvest makes a pretty compelling case below that the business is worth ~$30 M if they just sat and harvested the cash flow.
It’s time for another edition of “Value that company!”
Today, Pest Control - NW US!
$10 M ARR (24k customers at $100/q plus a little one-time)
95+% Customers are on cc autopay.
80% GM
$1.5 M SG&A
20% attrition in customer contracts can be replaced with part of SG&A