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2 synergistic companies with 26% Adj EBITDA Margins

In the last few years, $1 billion of capital from strategic investors, PE firms, and venture capital-backed firms have been flowing into the short-term rental (STR) market ecosystem - either through properties, brands, management companies or vendors that provide services to the growing number of STR operators. Some notable investors include Berkshire Hathaway, CEAS Investments, Initialized Capital Management, Soros Fund Management, Airbnb, Comcast, Bowery Capital.

This deal provides a buyer with two companies who have already established themselves in an industry that is attracting significant capital from marquee investors targeting the short-term rental ecosystem. The businesses operate synergistically and provide the combined entity a strategic competitive advantage in the marketplace. The owner’s focus on process and building a strong management team provides stability near term and an offers the ability to scale these businesses into the future as the industry matures.
- Predictable, consistent cashflow; highly efficient operating model and processes with 2020 Adjusted EBITDA margin projected to reach 26%
- Diversified customer base - balanced mix across individuals and commercial clients
- Average Annual Occupancy rate 92.8% over the past 3 years
- Professional, experienced, loyal management team in place and will stay after the acquisition
- Dominant provider in one of the 30 largest markets in the US
- Outstanding growth potential in either the existing market or expansion to other cities
- Favorable local regulatory environment which avoids risk found in operating in other cities which are less amenable to short term rental operators

The first company is a Furnished Corporate Apartment Rental Company. Demand for furnished corporate housing nationally has been strong pre-Covid. The local market where this company operates (major MSA) has a diversified economy which should recover at least as fast as the average major city. This along with continued growth in relocation as people move about for opportunity, the transient/consulting IT Sector for professionals, plus disruption to permanent housing, will drive growth in this local corporate housing market for the foreseeable future.

The second company is an e-commerce Furniture Rental Company. The Company's business model is based on a “warehouse only” concept. This model reduces overhead and expenses which enables them to be very cost competitive compared to traditional showroom-based incumbents. Instead of an expensive showroom with expensive employees, the company leverages the internet to enable customers to make their selections virtually. Ample warehouse space enables them to carry multiple furniture styles and plentiful inventory so they can meet nearly all customer preferences.

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