In This Issue: 

• Extracurricular Roll Ups: Inside the most excited roll-up theme from top PE investors

• What We’re Watching: Trump’s Tarrifs are Back (again…), Entering a Global Intelligence Crisis and Nvidia’s Earnings Saving Grace for AI Spend

• Deal of the Week: We found a cash flowing Commercial Cleaning Business in Illinois ($114k of Cash Flow). Click HERE for the listing (Deal Review Below)

• We sourced our YT subscribers business acquisitions LIVE. Watch the replay HERE and join us daily live on YT. W Stream to everyone who joined.

The Art of Rolling Up After-School Extracurriculars

Most investors miss the obvious.

While everyone chases SaaS multiples and AI infrastructure, there's a $40 billion market trading at 3–5x EBITDA that parents fund every month without thinking twice.

After-school programs. Youth sports leagues. Enrichment academies.

The small business acquisition market is flooded. First-time buyers chase the same HVAC and plumbing companies. Competition drives up multiples.

Meanwhile, youth enrichment operators are aging out with no succession plan and zero idea what their business is worth.

That's the million dollar play.

Diving Into the Unit Economics:

→ Recurring monthly tuition. Parents pre-pay by season.
→ Sub-10% annual churn. Switching costs are social, not financial.
→ 60–70% gross margins after instructor costs.
→ Minimal capex.

Three Entry Points:

Youth sports complexes with facility ownership
You're buying real estate + operating business. Land appreciates. Business throws off cash.

Specialty enrichment with scalable curriculum
Coding camps. Robotics. Art programs. Not betting on one coach—you're licensing a system.

Regional dance/music studio clusters
Acquire 3–5 studios within 20 miles. Centralize back office. Professionalize what ran on spreadsheets.

What Truly Matters:

Density. One location is a job. Five locations is a business.

Lease terms. Long-term with renewals = pseudo-ownership. Month-to-month = liability.

Summer revenue. Camps should smooth cash flow, not create a four-month valley.

Thesis

Buy at 3–5x → Consolidate ops → Add professional management → Sell platform at 8–10x

Risks

Demographic concentration. Regulatory creep. Reputation damage from one incident.

Bottom Line

Cash-flowing. Recession-resistant. Fragmented. Sellers don't know what they're worth.

Institutional capital is starting to notice. But most markets remain untouched.

Just don't expect it to be sexy. Expect it to compound.

WHAT’S HAPPENING IN THE MARKETS?

• FedEx Sues for Trump Tariff Refunds After Supreme Court Ruling

  FedEx sued for a "full refund" of tariffs paid under Trump's unilateral trade actions, ruled illegal by the Supreme Court last week. FedEx appears first to file post-ruling; others filed preemptively.

  Why it matters: This opens a refund floodgate—billions in potential Treasury outflows. Every company that paid illegal tariffs has standing to recover. Watch logistics, industrials, and retailers for balance sheet windfalls. The ruling also kneecaps executive tariff authority, forcing trade policy through Congress.

• Citron's "Ghost GDP" Thesis: The AI Displacement Spiral

  Citron's 2028 scenario: AI drives GDP while human purchasing power collapses. White-collar layoffs fund more AI capex, creating a feedback loop. The $2.5T private credit market defaults as SaaS revenue evaporates when companies build in-house with AI.

  Why it matters: If AI eliminates knowledge work faster than new roles emerge, consumer demand craters despite rising output. Private credit becomes the transmission mechanism for systemic risk—like subprime in 2008. Short consumer discretionary and private credit; long hard assets and essentials.

• Nvidia Earnings Test AI Spending Skepticism

  Nvidia reports earnings as the only megacap tech stock positive year-to-date. Investor caution around AI capex intensifies, yet hyperscalers' spending flows directly to Nvidia's chip monopoly.

  Why it matters: This is the ultimate AI referendum. Guidance reveals whether Big Tech's FCF squeeze forces capex cuts or fear of losing the race keeps spending irrational. A beat validates infrastructure; a miss confirms new market discipline. Either way, expect volatility across the entire AI stack.

DEAL OF THE WEEK

Northern Illinois Commercial Cleaning Business
Price: $282K | SDE: $114K | Multiple: 2.5×

Investment Summary

Commercial cleaning operation serving Northern Illinois since 2006. Revenue of $383K with 30% margins. 25-person team servicing long-term commercial contracts across multiple industries. Home-based, no facilities overhead. Added 10+ new contracts in 2025 despite minimal marketing. Revenue up 20% YoY.

This is recurring revenue infrastructure selling into operational budgets that don't disappear when GDP slows. Offices get dirtier during recessions, not cleaner.

Financials & Structure

• Revenue: $383K (up 20% YoY)

• SDE: $114K (30% margin)

• FF&E: $15K included

• Staff: 25 employees

• Home-based: Zero facilities cost

Investment Thesis

Commercial cleaning is the ultimate non-discretionary service business. Facilities managers don't cancel janitorial contracts during downturns—they get fired if the office looks dirty. Contracts renew automatically until someone actively cancels, creating revenue persistence that most service businesses never achieve.

This business grew from a single medical facility in 2007 to $383K with minimal marketing. The 20% YoY growth while adding 10+ contracts in 2025 signals demand outpacing capacity, not sales effort. In fragmented local service markets, reputation compounds—word-of-mouth from existing clients feeds the pipeline without CAC spend.

At 2.5× SDE with zero real estate overhead and established commercial relationships, you're buying proven systems and recurring cash flow. The seller started as an Anago franchisee but has operated independently, meaning no ongoing royalties bleeding margin. McHenry County sits northwest of Chicago—affluent suburbs with office parks, medical facilities, and professional services firms that require consistent cleaning.

The 25-person workforce is the operational moat. Commercial cleaning lives or dies on labor reliability. Trained staff who show up consistently are harder to replicate than the contracts themselves.

Critical Diligence

Contract structure: What % of revenue is under annual contracts vs. month-to-month? Contract length and cancellation terms determine revenue stability.

Customer concentration: Top 5 clients = what % of revenue? One large account leaving post-transition is an existential risk at this size.

Labor retention and cost: Average tenure of cleaning staff? Pay rates vs. local market? Turnover kills margins and service quality. Any workers classified as 1099s that should be W-2?

Growth capacity: Why only minimal marketing if results are this strong? Capital constraint, owner bandwidth, or strategic choice? If it's bandwidth, there's immediate upside.

Franchise obligations: Fully exited from Anago or lingering obligations? Verify no ongoing fees or non-compete issues.

Profitability verification: 30% margins are high for commercial cleaning (industry standard is 10-20%). Confirm owner isn't taking below-market comp or underpaying labor to inflate SDE.

Bottom Line

Recession-resistant recurring revenue model with 20-year track record and current growth momentum. Commercial cleaning scales predictably—add clients, hire staff, repeat. Layer in basic digital marketing, formalize referral programs with existing clients, and expand into adjacent services (carpet cleaning, floor care, window washing). At 2.5× on sticky commercial contracts with zero overhead, this is mispriced recurring revenue. $114K is the floor.

Listing is still available here.

This newsletter is for informational purposes only and does not constitute investment advice. The content is based on publicly available information, and the author makes no representations about its accuracy or completeness. Readers should conduct their own research before making any investment decisions.