TX Family Safety — Rabenson Group Deal Analysis

Listing snapshot

Asking price

$2.30M

80/10/10 SBA structure

SDE (LoopNet)

$641K

$568K on BizForSale

Revenue

$2.27M

6% CAGR recent years

Inventory included

$150K

Tangible asset value

Platform discrepancy — reconcile in CIM

SDE conflict across listings

BusinessesForSale.com$568,323 SDE · $2,215,814 rev

LoopNet$641,315 SDE · $2,271,328 rev

Variance$72,992

Likely causeAddbacks or stale listing

SDE growth trajectory

2021 ~$178,000 baseline

2022 – 2024 Growth period 6% revenue CAGR

TTM (reported) $568K – $641K +250% from 2021

SDE assumption

GM salary already expensed in SDE — verify in CIM

SDE is post all payroll including existing GM — no additional deduction applied to model

Confirm GM is arms-length employee, not owner undercompensating themselves

If owner is filling GM role below market rate, SDE is overstated and must be normalized

Deal structure — 80/10/10 SBA · $641K SDE

Ask multiple

3.59x

Ceiling is 4.5x ✓

SBA loan (80%)

$1.84M

~9%, 10yr

Annual debt service

~$228K

SBA + seller note est.

DSCR at ask

1.68x

Floor is 1.35x ✓

Post-debt cash flow

Post-debt SDE at ask

$413K

$641K − $228K debt service

Equity injection (10%)

$230K

Within ~$250K ceiling ✓

Price scenarios

At ask

$2.30M · 3.59x

SBA loan$1.84M

Equity injection$230K

Annual debt svc$228K

Post-debt SDE$413K

DSCR1.68x

Passes all criteria

Target offer

$1.95M · 3.04x

SBA loan$1.56M

Equity injection$195K

Annual debt svc$193K

Post-debt SDE$448K

DSCR1.97x

Strong buffer · best structure

Walk-away

$2.15M · 3.36x

SBA loan$1.72M

Equity injection$215K

Annual debt svc$213K

Post-debt SDE$428K

DSCR1.80x

Solid floor

Green flags

33-year operating history (est. 1992) — deep brand equity and referral base in Houston market

SDE grew 250%+ since 2021 ($178K → $641K) — strong operational improvement trajectory

Established General Manager willing to stay — named role already on payroll, supports absentee model

DSCR of 1.68x at ask — clears 1.35x floor with meaningful buffer, no mgmt cost adjustment needed

Equity injection at ask ($230K) within $250K ceiling

Dual revenue model: direct consumer + dealer/franchise training — diversified and scalable

$150K inventory included — tangible asset value beyond goodwill

Niche, essential, recession-resistant — baby/pool safety is need-driven, not discretionary

Red flags

SDE discrepancy across listing platforms ($568K vs $641K) — must resolve before underwriting

Geography: Houston TX — absentee model requires confirmed, contracted GM retention post-close

Health-motivated exit after 33 years — founder-dependency and customer concentration risk

250% SDE growth requires explanation — real improvement vs. aggressive addback normalization

Yellow flags

GM salary must be confirmed as arms-length — if owner is undercompensating themselves, SDE is overstated

Seller financing "available on request" — not committed; structure flexibility unconfirmed

Lease terms unknown — rent load and renewal rights unconfirmed

Revenue CAGR 6% modest — SDE growth is margin-driven; verify cost structure sustainability