for sale: midwest rigging contractor assisting clients ...€¦ · trucking companies and expert...
TRANSCRIPT
The Firm Business Brokerage Cortney Sells, President Phone: 402.998.5288 [email protected] ID#: CON021
FOR SALE: Midwest Rigging Contractor Assisting Clients with Machinery Installment, Removal, and Relocation
Heavy Lifting Company Serving Manufacturing, Utility, and Machinery Industries
Financial Overview
List Price: $3,146,000
Gross Sales 2015: $2,189,245
Owner Profit/Cash Flow 2015: $953,599
Profit Margin: 44%
Multiple: 3.3 *Multiples range from 1-5, with the average being 3
Valuation: 2015 Cash Flow x Multiple = Price
$953,599 x 3.3 = $3,146,876
Funding Example
Purchase Price: $3,146,000
10% Buyer Down Payment: $314,600 15% Seller Financing: $471,900 75% Bank Loan: $2,359,500
After all debt services the Net Operating Income (Profit) will be $544,242. This represents a 173% Return on Investment.
Description
A heavy lifting company serving manufacturing, utility, and machinery industries. This rigging business provides the lifting power necessary to move manufacturing equipment, turbines, printing presses, and much more! With 7 different lifts, this company is able to take on a wide range of jobs. These projects originate in Nebraska and Iowa, but with the many connections with long-haul trucking companies and expert technicians, this business can help their customers move anywhere in the country. Each project is assigned to one of two rigging crews. The crews consist of a working superintendent and 2-3 workers. Over 95% of the work is completed indoors, requiring special safety precautions. These crews are OSHA 10 certified to ensure the safety of all involved. They can put new equipment in place or load equipment for transport. When necessary, the business owners use the businesses well-established contacts to provide transportation and other technical services to their clients. A 2015 cash flow of $953,599 provided a 44% profit margin to the owners of this business. While only serving a limiting area and working on primarily smaller jobs worth $5,000-$8,000, this profit is impressive. Growth opportunities are abundant for this business and include expanding hauling operations and service area, as well as obtaining larger contracts, such as those related to medical equipment. After a down payment of $314,600, a buyer can expect a 173% return on investment. This is a Net Operating Income (Profit) of $544,242 for a new owner in the first year.
Next Steps
For a detailed financial package, please contact Cortney Sells or one of The Firm Business Brokerage’s professionals at 402.998.5288 or email [email protected].
Assets Included in Purchase: $1,233,578
Equipment: $980,000 (5 Ford Trucks, $110,000; 4 Tractors, $180,000; 6 Trailers, $128,000; 7 Lifts, $562,000)
Intangible Assets: Presence Previously Established in 5 States: NE, IA, SD, KS, and MO.
A/R: $253,578
*amounts may vary
Business Information
Year Established: 2005, At Current Location Since 2008
Location: Eastern Nebraska
Service Area: Daily jobs are typically completed with-in 150 miles of location. Jobs have extended to Texas, New York, and California as well as into Canada.
Markets Served: Manufacturing, Utilities and Energy, Printing Services, and Machine Tools
Lease: 15,000 sq. ft. Warehouse
Reason for Selling: Planned transition to other business interests that are taking up more of the owner’s time.
Employees: 1 Office Manager; 2 Crews of 3 to 4 Workers, Crews include 1 Working Superintendent and 2 to 3 Workers. All staff are OSHA 10 Certified and take part in proactive safety training programs.
Hours: Monday – Friday: 8AM to 4:30PM
Seller Training Period: Up to a Year (If Desired by Buyer)
Growth Opportunities: Expand Hauling Operations, Expand Service Area, Seek Larger Contracts, Obtain More Medical Equipment Contracts (ie. MRI and CAT Scan Machines)
Current Owner’s Responsibilities: Business Administration and Project Quoting (Only when needed)
Last Revised [4-14-16] by [SB]
- CONFIDENTIAL -
The Firm Business Brokerage ______________________________________
Business Overview
RE: Midwest Rigging Contractor Assisting Clients with Machinery Installment, Removal, and Relocation
A heavy lifting company serving manufacturing, utility, and machinery industries. This rigging business
provides the lifting power necessary to move manufacturing equipment, turbines, printing presses, and
much more! With 7 different lifts, this company is able to take on a wide range of jobs. These projects
originate in Nebraska and Iowa, but with the many connections with long-haul trucking companies and
expert technicians, this business can help their customers move anywhere in the country.
Each project is assigned to one of two rigging crews. The crews consist of a working superintendent
and 2-3 workers. Over 95% of the work is completed indoors, requiring special safety precautions.
These crews are OSHA 10 certified to ensure the safety of all involved. They can put new equipment in
place or load equipment for transport. When necessary, the business owners use the businesses well-
established contacts to provide transportation and other technical services to their clients.
A 2015 cash flow of $953,599 provided a 44% profit margin to the owners of this business. While only
serving a limiting area and working on primarily smaller jobs worth $5,000-$8,000, this profit is
impressive. Growth opportunities are abundant for this business and include expanding hauling
operations and service area, as well as obtaining larger contracts, such as those related to medical
equipment. After a down payment of $314,600, a buyer can expect a 173% return on investment. This
is a Net Operating Income (Profit) of $544,242 for a new owner in the first year.
Business Highlights
Year Established: 2005, At Current Location Since 2008
Location: Eastern Nebraska
Service Area: Daily jobs are typically completed with-in 150 miles of location. Jobs have extended
to Texas, New York, and California as well as into Canada.
Markets Served: Manufacturing, Utilities and Energy, Printing Services, and Machine Tools
Employees: 1 Office Manager; 2 Crews of 3 to 4 Workers, Crews include 1 Working Superintendent
and 2 to 3 Workers. All staff are OSHA 10 Certified and take part in proactive safety training
programs.
Hours: Monday – Friday: 8AM to 4:30PM
Current Owner’s Responsibilities: Business Administration, and Project Quoting (Only when
needed)
Due to high barriers to entry in start-up costs for equipment, there is minimal competition in this
industry
Financial Highlights
List Price: $3,146,000
2015 Gross Sales of $2,189,245
o See chart below for a categorized sales overview
2015 Cash Flow of $954,599
2015 Profit Margin of 44%
$1,233,578 worth of assets included in the purchase
o Equipment: $980,000 5 Ford Trucks - $110,000 4 Tractors - $180,000 6 Trailers - $128,000 7 Lifts - $562,000
o A/R: $253,578
*amounts may vary
Most projects completed by this business are only $5,000 to $8,000 in value. This means that this
business has many clients and are not dependent on large contracts. While smaller business is important,
this business currently has 2 bids out for jobs worth over $200,000 each. This shows that the business is
able to take on jobs both big and small.
This business wins 65% of all bids placed. Having No Bid Required is to say that clients choose this
business without asking for a bid price.
Valuation Details
The Firm Business Brokerage used a Cash Flow Valuation methodology to determine the Purchase Price
of the business.
The formula used is as follows:
2015 Cash Flow x Prescribed Multiple = Fair Market Value
Project Obtainment Breakdown Daily Projects (2 Weeks Out) Large Projects (6 Months Out)
Bid Required 30% 90% No Bid Required 70% 10%
10%
20%
70%
Sales Overview
10% Client Relocation
20% 1 Off Large Jobs (ex. MachineJacking)
70% Replace/Remove Equipment
Cash Flow is the sum of business net income plus any owner perks and any non-onward going expenses.
A multiple is prescribed by a 20 question, 100 point parameter ranking system that is used to analyze the
current business health. Each question is based on a scale from 1 to 5: 1 being low, 2 below average, 3
average, 4 above average, 5 high. The average of the responses sum is the business’ prescribed multiple.
With this information, the computation is as follows:
$953,599 x 3.3 = $3,146,876
The Fair Market Value found above positions the business List Price at $3,146,000
Funding Example
Purchase Price: $3,146,000
10% Buyer Down Payment: $314,600
15% Seller Financing: $471,900
75% Bank Loan: $2,359,500
Seller Financing 5 year term at a rate of 4.50% equals an annual loan payment of $105,572
Bank Loan 10 year term at a rate of 5.25% equals an annual loan payment of $303,786
After business expenses and annual loan payments, a buyer with a down payment of $314,600 would
retain a profitable net operating income of $544,242 which results in a 173% return on investment in the
first year!
A lender is required to have a minimum 1.5 coverage ratio for any business loans extended. At a
proposed Purchase Price of $3,146,000 with the terms listed above, the coverage ratio is 2.33. Please
note that the decision of whether to extend a loan on any particular sale belongs to the bank, and this
document does not guarantee specific terms or verify that financing is available.
Attached you will find the following:
Business Summary
Identifies important business information in an organized quick-reference format
Cash Flow Analysis
Cash Flow is the owner profit, which is the sum of business net income plus any owner perks and any
non-onward going expenses.
I have also included a Confidentiality Agreement for your review and signature. As with all of our businesses, this
Midwest Rigging Contractor Assisting Clients with Machinery Installment, Removal, and Relocation is being
sold confidentially. Additional information including name, location and financial documents can be forwarded to
you upon receipt of the signed Confidentiality Agreement. This Confidentiality Agreements protects Buyer, Seller and The Firm Business Brokerage.
The Firm currently has over 90 cash flowing businesses available. If you find that this is not a fit for you, please let us know and we would be happy to provide you with other opportunities.