When a family-owned truck repair company found itself at a strategic crossroads — constrained by its current facility but uncertain about the cost and risk of building new — HMA was asked to put hard numbers on all three possible futures.
Client
Confidential — Midwest Heavy-Duty Service Business
The Client
A regional institution with over a century of history, this Midwest company has been repairing medium- and heavy-duty trucks, trailers, RVs, and buses since the early twentieth century. Led by two working owners who have grown the business meaningfully over the past decade, it built its reputation on services most regional competitors simply cannot perform — complex frame straightening, axle repair, and full collision restoration for heavy vehicles.
Revenue has grown steadily at mid-single-digit annual rates, approaching $4M, with adjusted EBITDA under $500,000 on a trailing twelve-month basis. By any conventional measure, a well-run small business. The challenge is physical: the facility is at capacity, and the nature of heavy-duty repair — large vehicles, long job cycles, specialized equipment — means growth is directly constrained by space. The business regularly turns away work it is qualified to perform.
The Strategic Challenge
The owners had the foresight to acquire a second parcel of land — four times their current footprint, with direct visibility and access from a major interstate trucking corridor. The logic was clear: build a purpose-built facility, move, and unlock the growth the current location prevents. Then construction costs surged, interest rates rose, and a once-straightforward project became a capital commitment exceeding $10M with real execution risk.
The owners came to HMA with a direct question: given our desire to exit in four to six years, which path maximizes the value of what we have built?
The question was not “Should we move?” It was “What is each path actually worth — and what does it cost to get there?”
Our Approach: Three Futures, Three Valuations
We modeled three distinct scenarios, each grounded in the company's actual financial history: detailed revenue projections, expense modeling, EBITDA normalization, valuation multiples drawn from comparable heavy-duty transactions in our own deal experience, and a buyer profile assessment for each path. We also modeled cumulative net profit through the holding period — the full economic picture, not just the terminal value at exit.
Scenario 1 — Current State: the business as it exists today at current revenue and earnings levels.
Scenario 2 — Grow in Place: the business in 4–6 years, growing incrementally in the current location through operational improvements, price discipline, and mobile service revenue.
Scenario 3 — New Facility: the business in 4–6 years after building on the interstate-adjacent property, relocating, and strong execution on growth plans.
What the Numbers Actually Said
The new facility produces by far the highest terminal value — roughly two and a half times the grow-in-place scenario. But the analysis surfaced a critical complication: the construction loan that builds the facility must be repaid at closing. Net proceeds to the sellers, after retiring the related debt, may be far closer to the grow-in-place outcome than the gross headline suggests — particularly within the owners' four-to-six-year horizon. On a risk-adjusted basis, staying and growing prudently wins the short game.
Extend the timeline, and the answer flips. By ten years out, the space-constrained business plateaus while the new facility's capacity continues to compound — nearly double the net profit, making the extended timeline valuation highly desirable. The right answer depends entirely on how long the owners intend to stay.
The analysis also surfaced a strategic insight nobody had asked for: the second property, now adjacent to a major new retail destination, may hold standalone real-estate value entirely separate from the business — and in some scenarios the owners' best return comes from developing or leasing that land independently while growing in place.
How Each Path Changes the Buyer
Current state: with lower adjusted EBITDA, the likely buyer is a local or regional owner/operator, potentially SBA-financed. Private equity is unlikely absent a strategic rationale.
Grow in place: with modest EBITDA growth, PE-backed platforms building regional service networks become serious buyers. The pool expands substantially and multiples rise.
New facility: with substantial growth, the business becomes a genuine platform acquisition candidate — or the anchor location of a multi-site network — attracting the most competitive, highest-paying buyers in the market.
The analysis gave the owners something they did not have before: a number for each future. Not a feeling or a hunch, but a modeled, documented value range with the assumptions stated plainly.
What This Engagement Demonstrates
This is what HMA' consulting practice is built to do: give owners the analytical foundation to make high-stakes decisions with confidence rather than intuition. The question the owners brought us — “Should we build?” — turned out to have a more nuanced answer than yes or no: it depends on your timeline, your risk tolerance, your real estate strategy, and your appetite for executing a construction project without destabilizing a business that took a century to build. The deliverables — three-scenario valuations, buyer profiles, cumulative profit models, a marketability scorecard, and comparable transaction data — turned that conversation from speculation into strategy.