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Basic Business & Commercial Services w/ 25+ Recurring Clients

22 full-time office & field employees – owner willing to stay on as GM!

CASH FLOW
$1,769,538

Specifications

  • Price
    $6,210,000

  • Revenue
    $5,478,368

  • Equipment
    $935,220

  • Location
    Charleston, South Carolina

  • Lease
    $3,000

  • Reason for Sale
    Retirement planning

  • Employees
    20 full time office & field employees

  • Profit Margin
    26%

  • Cash Flow
    $1,769,538

 

With 22 full-time office and field employees in place, the current owner is willing to stay on as General Manager! A multiservice business, this company focuses largely on traffic signals, security, HVAC, plumbing, and structural & steel erection.  There are over 25 active recurring clients from years of services provided. With an average project size of $200,000, this company has existing government contracts with the city and department of transportation. Assets include over $808,000 in vehicles like trucks, digger, crane, and more, along with $126,500 in heavy equipment such as a forklift, excavator, scissor life, and others! There is also an additional $101,350 worth of trailers included in this purchase. A $621,000 down payment would return $826,672 in the first year after debt payments.

 

Located in South Carolina, the company operates from a two-acre property including four buildings that has plenty of room for offices, a warehouse, and workshop as well as storing equipment. Work is typically steady throughout the year and most projects are completed within a 100-mile radius of the office.

 

This business quickly earned a reputation for performance excellence based on knowledge, experience and a superb safety record in the most challenging environments. The current owner does not do labor work; their role is overseeing the office.

 

Growth opportunities include pursuing more projects into the mechanical side and especially general contracting, structural and steel erection, which currently accounts for only 11% of the business.

Business Highlights

  • Year Established: 17 years
  • Location: Charleston, South Carolina
  • Service Area: Within 90-mile radius
  • Number of Clients: 25+ active reoccurring clients
  • Services: Electrical, Traffic Signals and Security, HVAC, Plumbing, Structural and Steel Erection
  • Building: Four buildings on two acres includes offices, meeting rooms, warehouse, shop and storage space
  • Lease: $3,000 per month- low overhead
    • Will stay this way for at least 1-year
    • Seller has agreed to give the new owner first right of refusal
  • Reason for Selling: Retirement planning
  • Employees: 22 full time office & field employees
  • Seller Training Period: 2 years; also willing to stay on as GM
  • Growth Opportunities: Expansion into structural and steel erection projects; gaining a presence – the team currently does not do any bidding or marketing
  • Current Owner’s Responsibilities: Oversees office roles-does not do labor 

Financial Highlights

  • List Price: $6,210,000
  • Gross Sales:
    • 2020: $8,129,876 Annualized
    • 2019: $5,478,368
    • 2018: $4,384,111
  • Cash Flow:
    • 2020: $2,627,412 Annualized
    • 2019: $1,769,538
  • Assets Included in Purchase: $1,130,000
  • Heavy Equipment: $126,500 (6) forklift, excavator, scissor lift, etc.
  • Vehicles: $808,720 (22) trucks, digger, crane, etc.
  • Trailers: $101,350 (16)
  • A/R: $400,000
  • A/P: $200,000
  • Working Capital $200,000
  • Inventory: $200,000
  • WIP: $4,752,825
  • Intangible Assets: Existing Contracts

*amounts may vary

Cash Flow Analysis

Description of Financial StatementP&L Statement
Jan-March 2020
Tax ReturnTax ReturnTax ReturnTax ReturnNotes
Q1: 20202019201820172016
GROSS SALES$2,032,469$5,478,368$4,384,111$3,571,594$3,526,518
Annualized$8,129,876
Net Income Shown on Financial Statement$655,186$1,760,804$1,888,366$448,536$527,182
ADDBACKS
Depreciation$0$2,408$6,543$8,751$16,950
Interest$0$0$862$2,947$4,997
Meals & Entertainment$1,217$4,526$5,121$7,631$6,041
Non-Business Telephone$450$1,800$1,800$1,800$1,800
TOTAL ADDBACKS$1,667$8,734$14,326$21,129$29,788
Seller's Cash Flow = Total Addbacks + Net Income$656,853$1,769,538$1,902,692$469,665$556,970
Annualized
Profit Margin32.32 %32.29 %43.40 %13.15 %15.78 %
.

Services

  • Design Build
  • Concrete foundations
  • Steel Erection
  • Electrical design, installation and maintenance
  • Automation design, installation and maintenance
  • Fiber Optics design, installation and maintenance
  • Mechanical design, installation and maintenance
  • Heavy equipment installation
  • Fabrication
  • HVAC design, installation and maintenance

Growth Opportunities

Growth opportunities include pursuing more projects into the mechanical side and especially general contracting, structural and steel erection, which currently accounts for only 11% of the business.

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:

Cash Flow       x          Prescribed Multiple     =          Fair Market Value

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.

For this business, the Cash Flow was used with a prescribed multiple of 4.5.  With this information, the computation is as follows:

$1,380,632      x          4.5       =          $6,212,844

The fair market value found above positions the business list price at $6,210,000.

*Industry growth trends; longevity of company; skilled employees; growth opportunities

 

Funding Example

Purchase Price:                                $6,210,000

    10%Buyer Down Payment:             $621,000

    15%Seller Financing or Equity:      $931,500

    75%Bank Loan:                                $4,657,500

Seller financing 5-year term at a rate of 4.50% equals a monthly loan payment of $17,366.

Bank loan 8-year term at a rate of 6% equals a monthly loan payment of $61,206.

After business expenses and loan payments, a buyer with a 10% down payment of $621,000 would retain a profit of $826,672, which results in a 133% return on investment in the first year.

A lender is required to have a 1.5 coverage ratio for any business loans extended. At a proposed purchase price of $6,210,000 with the terms listed above, the coverage ratio is 1.88. 

Please note that the decision of whether to extend a loan on any sale belongs to the bank, and this document does not guarantee specific terms or verify that financing is available. 

Purchase Price:

$6,210,000

$
%
OR
$
%
OR
$
Years
%

Bank Loan Needed: $

Years
%
$
$
$
$
$

Funding Details

Business:

Offer Price: $

% Buyer Cash Down at Closing: $

% Seller Carry Back via Promissory Note: $

year term at a rate of %

% of Purchase Price secured by Buyer and Seller

Total Bank Loan Need: $

% of Purchase Price

Desired Loan Type:

Desired Bank Terms: year term at a rate of %

Total Business Assets, Inventory, and A/R: $

Total Undercollateralized Loan: $

Loan Payments

Monthly Payment to Bank: $
Yearly Payment to Bank: $
Monthly Payment to Seller: $
Yearly Payment to Seller: $
Total Monthly Debt Service: $
Total Yearly Debt Service: $

Conclusions

Fixed Charge Coverage Ratio

The bank will require a minimum ratio of 1.5 to be lendable.

Cash Flow:
2019 Cash Flow
$
Annual Debt Service: $
RATIO:

Buyer's Net Operating Income (NOI)

The amount of money the Buyer will retain as profit.

Cash Flow:
2019 Cash Flow
$
Annual Debt Service: -$
NOI:

Buyer's Return on Investment (ROI)

The rate of return on the Buyer's down payment.

Down Payment: $
NOI:
ROI: %

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210 N 78th St. 2nd Floor
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The Firm is not a real estate brokerage and therefore the staff will not handle any aspect of the lease, sale or purchase of real estate.