Based on the returns, your CPA will find out why they aren't making ("showing") total revenue. You obviously know business and this would compliment very nicely. You have a tremendous opportunity here. A client list that large for 5 years is pretty significant. Our numbers are similar but we have about 1/2 the
equipment and do retail also. For 5 years and those client numbers and that gross revenue, what are they doing? It sounds like a price war situation here or a lot of cheap tans. If in fact you can pull about $60-70k out (which sounds even low for what it should be doing based on my location), 3 to 5 times net is not unreasonable. Location, state, weather, competition, etc. all play a part here. If the owner is stating $39k net, at 4x net you could easily offer $160k. It may be worth $325k, but not all the factors are known here.
My take on this is the expenses appear inflated as *stuff* is carried by the company that probably should not be. The gross could be higher with better marketing and pricing. The
equipment, although older, can be a great work horse for you if you clean them up, perhaps paint them to match the new interior scheme and put new
lamps in them. There are a lot of old cars out there performing very well in car shows. Your *older* beds can just as easily be restored to factory new. If not, dump it for new. Don't have to do it all at once now, do you? Seriously, if you have the cash flow and can afford to purchase this asset and maintain it, you've got a real winner situation. Good luck and let us know how well it goes.