Case Study: Acquisition of a $1.7M FedEx Route Business

🧾 Overview

Target Company: REDACTED, Inc.
Industry: Last-Mile Delivery / FedEx Ground Route Contractor
Location: Texas
Acquisition Value: $1.76M
Structure: SBA 7(a) Loan + Seller Carry
Time to Close: 82 days from LOI to funded acquisition

🎯 Buyer Profile

Our client, a former operations manager at at a fortune 500 company with a logistics background, was seeking a recession-resilient business with consistent cash flow and minimal customer acquisition risk. As a first-time buyer, they wanted a done-for-you experience and were particularly concerned about financing and due diligence complexity.

🔍 Deal Sourcing

This was an off-market opportunity sourced through our proprietary FedEx contractor outreach program. The seller had not formally listed the business but was receptive to a private, discreet exit. Our team facilitated introductions and negotiations directly.

📊 Due Diligence & Deal Analysis

Revenue (2024): $2.45M
Seller's Adjusted EBITDA: ~$545K
Key Strengths:

• 10 established FedEx Ground routes, low driver turnover

• All trucks included (8 P&D vans, 2 spares), fully compliant with FXG standards

• Longstanding FXG terminal relationship and excellent service scores

Risks Mitigated:

• Fuel expense volatility—client implemented a surcharge clause post-close

• Vehicle maintenance variance—seller provided 90-day escrow for truck condition

💰 Deal Structure

Total Purchase Price: $1,760,000
Financing Breakdown:

• SBA 7(a) Loan: $1,320,000

• Buyer Equity Injection: $220,000

• Seller Financing (Fully Subordinated): $220,000

Notable Terms:

• 10-year SBA amortization at 10.25% APR

• Seller note on 5-year balloon, no payments first 12 months

• No prepayment penalty for early SBA payoff

🚀 Post-Close Support

Eagle Dawn Capital remained embedded for 90 days post-close, assisting with:

• Transitioning FXG contract compliance and safety audits

• Retaining the entire driver team with minimal attrition

• Implementing fleet maintenance schedules and route profit tracking

📈 Results

• Immediate cash-on-cash return: 119% projected in Year 1

• DSCR post-close: 1.68x, exceeding SBA minimums

• Buyer achieved full management transition in under 60 days and is already bidding for 2 additional routes

📌 Key Takeaways

• Business was acquired with just 12.5% down

• Seller financing helped reduce buyer capital at risk

• Buyer gained a high-cash-flow business with strong asset backing and contractual revenue