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MUNICIPAL INFRASTRUCTURE SERVICES CONTRACTOR
(Upstate New York - RELOCATABLE)
PRICE: $ 1,750,000 CASH FLOW: $ 550,000 EBITDO
BUSINESS: This relocatable, rapidly-growing municipal service firm is highly profitable. It uses an established, licensed process to perform preventative maintenance for municipalities that saves them from the costs of full replacement. With a limited number of competitors nationwide and a strong reputation for both price and performance, it is anticipating continued, accelerated growth. Experienced, non-union employees and senior management will stay. The owner is willing to remain in a full sales role to aid in transition, oversight and teaching, and introduction to the marketplace.
WHY BUY?
· Fast-growing industry with recent company sales growth to $2MM+
· Highly profitable, above average 35%+ ROE mean fast capital return even on $ .7 - 1MM equity contribution
· Sales and profit growth during recent economy slowdown is indicative of recession-proof nature of municipal investment
· National scope guards against regional market slowdowns
· Relocatable, but current site offers quality lifestyle in suburban area with famous amenities and activities nearby
FACILITIES: The business currently leases administrative and shop/yard space from its owner but is easily relocatable due to the national scope of its sales
and service activity. It has a full complement of specially-designed vehicles and equipment and the ability to outsource certain processes necessary to its work
on an as-needed basis thereby saving substantial shipping and fuel costs.
OPPORTUNITY FOR GROWTH: This rapidly-growing, extremely profitable service contracting business uses a licensed product to perform significant pre-
ventative maintenance to its water & sewer infrastructure, offering maximum benefit for municipal budgets. The strength of the Company and its market are
reflected in the fact that it has grown substantially in size and profit during the recent economic difficulties. An entrepreneur with a sales background or
experience in engineering or contracting could continue the growth pattern by adding a sales staff or expanding into geographic areas currently neglected.
A private investment group could prosper by acquiring the Company as an add-on to a larger investment, taking advantage of and leveraging its tremendous
cash flow.
FINANCIAL: Business is extraordinarily profitable offering 20% ROTA and over 35% ROE
| Recast and Pro-forma Income Statement Highlights | |||||
| Fiscal Years Ended December 31 | |||||
| Pro-forma | |||||
| Forecast | 1st year | ||||
| 2007 | 2008 | 2009 | 2010 | new owner | |
| Net sales | $652,133 | $924,534 | $1,742,727 | $1,700,000 | $1,800,000 |
| Gross margin | $438,182 | $519,671 | $818,498 | $900,000 | $1,000,000 |
| % to net sales | 67.2% | 56.2% | 47.0% | 52.9% | 55.6% |
| Operating expenses | $362,611 | $467,552 | $597,494 | $600,000 | $475,000 |
| % to net sales | 55.6% | 50.6% | 34.3% | 35.3% | 26.4% |
| Operating profit | $75,571 | $52,119 | $221,004 | $300,000 | $525,000 |
| % to net sales | 11.6% | 5.6% | 12.7% | 17.6% | 29.2% |
| Business cash flow | $250,744 | $247,367 | $484,481 | $565,000 | $525,000 |
| % to net sales | 38.4% | 26.8% | 27.8% | 33.2% | 29.2% |
SUMMARY TERMS AND PRICE: The Company is attractively priced at $1,800,000, including specialized equipment, product license and contracts. There
is a contract backlog of almost $1MM. An individual or investment group, whose criteria include the technological or municipal spheres, should expect to
have equity of $ 700,000 (and some working capital) to support current growth. Bank money is likely available to a qualified buyer and the owner is open to
some financing as well as being available to assist in an orderly transition for a meaningful time.
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