Roselle Auto Body & Licensed Car Dealership, 40-Year New Jersey Operation with Real Estate

$1.5M

SDE

Subscribe Free

Read the full deal writeup

Already a member? Sign in

Full Editorial Writeup

This is a 40-year-old auto body shop and licensed car dealership operating out of a 5,000 SF building on an 18,000 SF lot in Roselle, New Jersey (Union County). The seller owns both the operating business and the underlying real estate, and is selling the two together as a single package priced around $2.2 million. The business carries an active auto body license, a car dealership license, and established DRP (Direct Repair Program) relationships with insurance carriers, which is the single most valuable intangible in the collision repair world.

The headline number is $1.5 million in seller's cash flow (SDE), which is a substantial figure for a single-location shop and suggests either strong throughput or that the SDE figure includes both the body shop margin and the dealership gross. The listing explicitly states the business is currently under-utilized because the owner is winding down toward retirement, which is a classic setup: earnings holding up despite an operator who has taken his foot off the gas.

Collision repair is a durable, non-discretionary category. Cars get hit, insurers pay to fix them, and DRP steerage sends a steady stream of work regardless of the economy. The combination of a licensed dealership, a body shop with insurer DRPs, and owned real estate on a nearly half-acre lot in a dense New Jersey market makes this a genuinely interesting acquisition for an operator who can re-energize an underutilized asset.

Why we like it

Earnings quality is anchored by $1.5 million in cash flow from a 40-year-old business, and management explicitly says the shop is under-utilized because the owner is coasting into retirement. That means the reported SDE may understate true run-rate capacity, and a hungry operator could grow the number rather than merely defend it.
The insurance DRP relationships are the real moat here. Direct Repair Program agreements take years to earn and effectively pre-load the shop with a steady pipeline of insurer-referred collision work, which is far stickier and higher-margin than chasing walk-in retail one job at a time.
Collision repair and licensed dealer operations are recession-resistant. Accidents happen in any economy, insurers pay claims regardless of GDP, and cars need repair whether times are good or bad, so the demand floor under this business is genuinely hard.
The deal includes both the operating business and the real estate: a 5,000 SF building on an 18,000 SF lot in dense Union County, NJ. That gives the buyer control of the location, rent savings that flow to cash flow, and a hard asset that backstops the downside if the business ever falters.

How to improve it

Quantify and expand DRP capacity in the first 90 days. Meet with every current insurer partner, understand your current volume allocation, and push to be added to additional DRP networks. Each new carrier program is incremental referred volume at strong margins with essentially no marketing cost.
Attack the stated under-utilization directly. Map current bay throughput, cycle times, and technician productivity against capacity, then add shifts, hire estimators, or extend hours to fill the gap. The listing tells you the earnings are being left on the table, so the first job is capturing it.
Rebuild the used-car dealership arm as a profit center. The dealer license is already in place and is expensive to obtain, yet it appears lightly used. Sourcing and reconditioning trade-ins and total-loss vehicles through the body shop creates a natural, high-margin retail sales flywheel.
Modernize the front end with digital estimating, online scheduling, and text-based status updates. Insurers and customers increasingly grade shops on cycle time and communication, and better DRP scorecards translate directly into more referred volume.
Add complementary revenue lines that reuse the same bays and staff: detailing, paint protection film, ceramic coatings, and fleet collision contracts with local municipalities and commercial fleets. These smooth out demand between insurance jobs and lift utilization.
Separate the real estate into its own entity and put a market-rate lease in place. This clarifies the operating economics for future financing or resale, and lets you later monetize the half-acre lot independently if the highest and best use is redevelopment.
Institutionalize the business ahead of the owner's exit. Document DRP contacts, insurer relationships, pricing, and vendor accounts, and cross-train a shop manager so the enterprise value does not walk out the door with the retiring seller.

Diligence notes

Break the $1.5 million SDE into its components. Understand how much comes from the body shop versus the dealership, how much is add-back versus true recurring earnings, and how the figure was calculated. A single blended SDE for two distinct businesses needs to be unbundled and verified against tax returns.
Scrutinize the DRP agreements. Confirm which carriers, the terms, whether they are assignable on a change of ownership, and the volume each contributes. If the DRPs are personal to the retiring owner or lapse on transfer, the moat and a large chunk of the earnings could evaporate at close.
Verify the real estate value inside the $2.2 million package price. Get an independent appraisal of the building and 18,000 SF lot, check zoning and any environmental issues (body shops carry paint, solvent, and underground-tank exposure), and confirm how the $2.2 million splits between real estate and business goodwill.
Assess licensing transferability. Both the auto body license and the New Jersey dealer license must transfer or be re-obtainable by the buyer. Confirm the process, timeline, and any regulatory hurdles with the state before committing, since the licenses are core to the deal thesis.
Pin down actual gross revenue, which is not disclosed. A $1.5 million SDE with no revenue figure makes the margin profile impossible to sanity-check. Insist on 3 years of financials, DRP payment histories, and dealership sales records to confirm the earnings are real and stable, not a one-year peak.

Source

Originally listed on BizBuySell. View original listing →