Long Island Fuel Oil Delivery & Burner Service

$14.3M

Revenue

$1.0M

SDE

5.5x

Multiple

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Full Editorial Writeup

This is a 35-year-old fuel oil delivery and HVAC/boiler service operation serving Long Island, New York. The business moves roughly 4.3 million gallons of residential, commercial, and diesel fuel annually across 900+ active customer accounts, and it runs a parallel burner service division covering HVAC and boiler maintenance and repair. On $14.27M in 2024 gross revenue it throws off $1M in cash flow, which is a thin roughly 7 percent margin typical of fuel resellers where the pass-through cost of product dominates the top line.

The revenue mix is what makes this more than a commodity reseller. Recurring budget plans, automatic delivery enrollment, and service contracts create a sticky, repeat-purchase base, and the burner service division adds a higher-margin labor revenue stream that smooths out the seasonality and price volatility of pure fuel sales. The operation is licensed, bonded, and fully compliant, with a recognized brand on Long Island.

The sale includes $2.5M in trucks and equipment, a meaningful hard-asset package relative to the $5.5M asking price. The business is headquartered on a one-acre commercial property with a 4,000 square foot service facility, office, warehouse, truck bays, and a caretaker rental unit, but the real estate is offered separately for purchase or continued lease and is not part of the asking price.

Why we like it

Earnings quality is anchored by recurring revenue: budget plans, auto-delivery enrollment, and service contracts mean a large slice of the 900+ accounts re-order without being re-sold each season. That recurring structure plus a service division reduces the customer churn and price-shopping risk that plagues pure spot fuel sellers.
Heating oil on Long Island is essential, not discretionary. Customers in a downturn still need to heat their homes and keep boilers running, and the burner service division generates demand on emergency breakdowns regardless of the economy, making the cash flow defensible through a recession.
The moat is operational density and switching friction. Thirty-five years of brand presence, a licensed and bonded operating footprint, and an installed base of service contracts make it hard for a new entrant to undercut, and the integration of delivery plus service locks customers into the relationship.
The asset package is real and de-risks the entry. $2.5M of trucks and equipment included means a buyer is acquiring roughly $3M of intangible/goodwill value on $1M of cash flow, and the hard assets provide collateral for acquisition financing and downside recovery.

How to improve it

Push every transactional customer onto auto-delivery and budget billing within the first season. Each conversion increases lifetime value, smooths cash flow across winter peaks and summer troughs, and raises the recurring revenue percentage that buyers and lenders pay up for.
Grow the burner service division aggressively, since service labor carries far higher margins than fuel pass-through. Sell annual maintenance contracts to the existing 900+ fuel accounts, target an attach rate north of 60 percent, and convert one-time repair calls into recurring service agreements.
Layer in equipment installation and replacement sales. The existing customer base of aging oil boilers and HVAC systems is a captive audience for high-ticket replacement jobs, and a dedicated install crew turns the service truck visits into a sales channel.
Tighten fuel procurement and hedging. On 4.3M gallons annually, small improvements in supply contracts, basis hedging, and delivery route density meaningfully expand the thin 7 percent margin, and disciplined pricing on protected-price customers reduces commodity exposure.
Roll up smaller Long Island oil dealers retiring out of the business. The region is full of sub-1M gallon operators with aging owners and no succession plan, and bolting their accounts onto this platform's existing trucks and dispatch creates immediate route density and margin.
Modernize dispatch and customer-facing technology. Tank-monitoring sensors, mobile payment, and an online customer portal reduce service calls, prevent runouts, and improve retention, while route optimization software lowers fuel and labor cost per delivery.

Diligence notes

Scrutinize the margin and customer concentration. A 7 percent cash flow margin on a fuel reseller is normal, but confirm how much of the $1M SDE is owner add-backs versus real operating profit, and check whether a few large commercial or diesel accounts drive a disproportionate share of gallons.
Separate the real estate economics carefully. The property is leased and offered for separate purchase, so model the go-forward rent or acquisition cost since that lease expense directly determines whether $1M of cash flow survives after the seller stops occupying their own building.
Verify the condition and remaining life of the $2.5M truck and equipment fleet. Heating oil tankers are capital-intensive and DOT-regulated, so review the age, maintenance logs, and replacement schedule, because a fleet near end-of-life turns the asset value into a near-term capex liability.
Confirm recurring revenue is contractual and renewing. Pull the service contract and budget-plan rosters, measure year-over-year retention, and verify auto-delivery enrollment numbers, since the entire premium over hard-asset value rests on the stickiness of that recurring base.
Assess the secular decline risk of oil heat. The Northeast is steadily converting to natural gas and heat pumps, so review the multi-year gallons trend, customer attrition to conversions, and how the burner service division can capture the transition rather than be eroded by it.
Examine environmental and regulatory exposure. Fuel storage, tank compliance, spill liability, and licensing carry real tail risk, so confirm clean environmental records, bonding status, and any pending compliance issues before assuming liability transfers cleanly.

Source

Originally listed on BizBuySell. View original listing →