Case Study: $2.93M Tire Retail & Installation Shop

The Buyer

This buyer was an experienced business owner who had already completed a few acquisitions. He needed help sourcing and vetting a complementary business but didn’t have the bandwidth to do it alone. We worked closely with him to narrow down his ideal business profile and ensure the deal fit both financially and operationally.

Finding the Deal

This deal was found by aggregating publicly available listings. We were able to get this one under LOI swiftly and lock it off for due-diligence mostly due to speed of outreach and front end diligence on the deal. Occasionally good businesses become available on public listing sites, but they go very quickly!

The Numbers

• Purchase price: $2,930,000

• EBITDA: $885,198

• Revenue: $3,278,507

• EBITDA margin: 27%

• Multiple paid: 3.31x EBITDA
  

How We Structured It

• SBA 7(a) loan: 75 % of the purchase price

• Buyer equity: 10 %

• Seller financing: 15%

We secured a 15% seller note on this deal to keep the seller aligned and provide some more assurance for the buyer.

Challenges Along the Way

• Inventory Management: The business had over $150,000 tied up in slow-moving tire sizes that weren’t relevant to most local customers. We worked with the seller to discount and clear out obsolete inventory before closing, freeing up cash for higher-demand stock.

• Supplier Agreements: Key supplier contracts were expiring within a year. We supported the buyer in renegotiating these agreements, securing volume discounts and exclusive brands that gave the shop a competitive edge.

• Employee Training Gaps: Several installers hadn’t been formally trained on newer, high-performance tire equipment. Before closing, we arranged on-site training sessions and set up a certification program to ensure service quality stayed high.

What We Consulted On After Close (90 day post acquisition business consulting)

• Restocking inventory with high-demand, higher-margin tires.

• Rolled out new supplier contracts, boosting selection and profit.

• Launched a local ad campaign to promote exclusive brands and fast service.

• Set up regular team meetings to drive ongoing improvements.

How It's Going

Three months in, the shop is on steady ground. Inventory is better matched to customer demand, and the team is handling more complex installs with confidence after recent training. Customer reviews mention faster service and a better selection.

Sales have seen a modest bump, especially from new fleet accounts. A few supplier hiccups caused minor delays, but overall, the owner is encouraged by the early results and is focusing next on streamlining operations and building local awareness.

Final Thoughts

This type of acquisition is good for buyers that are able to take on a business with higher demands time and business skill wise. The upside can be higher, but they are certainly not appropriate for buyers who need something simpler and lower time commitment!