Today’s Find:
Dumpster Broker Teardown (Asset-Light, High Price)
Dumpster Rental E-commerce: Asset-light | 60 markets | $1.13M SDE
This is a nationwide Dumpster Rental Broker. It's asset-light, runs across 60 markets, and prints cash. But when a broker asks for a tech multiple, we put the gloves on.
The Snapshot 📸
Metric | Detail | The Reality |
Asking Price | $5.65 Million | |
Cash Flow (SDE) | $1.13 Million | 5.0x SDE |
The Pitch | Two owners clocking 10 hours a week each. That's the dream. |
The Gut Check: They're asking for perfection at 5.0x SDE. That valuation is for a platform, not a brokerage. The price is too damn high unless the diligence proves this thing is bulletproof.
The PE Rigor: Stress-Testing the Numbers
1. The True Cash Flow (QoE Check) 💸
SDE is likely overstated: SDE assumes the owners can be replaced for free. They can't. You need a dedicated, high-paid General Manager/Operator to oversee $8M in sales and 21 contractors. Figure $150k in replacement salary minimum.
Normalized EBITDA: We're really buying ~$980,000 in true cash flow.
The Real Multiple: You’re paying 5.77x Normalized EBITDA for this. You're paying a premium for a high-risk lead generation business.
2. The Moat or Not: Low to Medium🛡️
The entire business relies on SEO and vendor goodwill. That’s the core risk.
Weakest Link: They own nothing. The moment a local hauler decides they want a bigger margin, they can build their own website and cut you out. Game over.
The Threat: Any competitor with a small PE/VC backing could crush their SEO and steal market share. You're paying for cash flow, but you are buying no structural defense.
Verdict: This is highly scalable, but currently not defensible.
The Investor Verdict & Structure
The Value Creation Plan (The Fix) 🌱
You can only justify this price if you have an immediate plan to build the moat the seller didn't.
Fix 1 (Tech): Toss the generic software. Build a lightweight, proprietary Vendor Management Portal that is so efficient, suppliers want to be locked in. That's your only path to a structural moat.
Fix 2 (Growth): Aggressively leverage the centralized back-office to expand into the other 40 US markets they haven't hit yet. Growth needs to be cheap and fast.
The Deal Structure 🤝
Do not wire $5.65M. Protect your capital against the inevitable vendor/customer churn.
Pay Down: Bring the cash down
Earn-Out: Tie out a significant component to a vendor retention metric or a specific customer repeat-order target over 18 months. Make the seller share the risk.
Final Takeaway: This is a fantastic business to run, but a risky business to buy at this price. You're paying a high fee for the seller to have figured out the model. Now, your job starts immediately: build the damn moat!
Until next time,
