Return To Opportunities List

Opportunities

CCTV Pipeline Inspections & Flow Monitoring Services

Sold

Over $2M in sales and 55% profit margin!

CASH FLOW
$1,427,845

Specifications

  • Price
    $4,100,000

  • Revenue
    $2,583,777

  • Cash Flow
    $1,427,845

  • Location
    Honolulu, Hawaii

  • Service Area
    Big Island

  • Equipment
    $1,561,721

  • Profit Margin
    55%

  • Employees
    12: 10 FT, 2 PT; 1 Owner + 1 Director of Operations, 1 Quality Control Supervisor, 1 Salesperson, along with CCTV and Vactor operators and field technicians

  • Intangible Assets
    Well-established in the industry, long-standing client base

With over $2M in sales and a 55% profit margin, this sewer pipeline inspection company in Honolulu has been established for over 15 years! Specializing in CCTV inspections of pipelines, their top-notch equipment and vehicles allow their well-trained PACP-certified staff to meet the needs of their client base, 90% of which consists of engineers for construction companies, municipalities, or consulting engineers. They also provide manhole/corrosion inspections, smoke testing, flow monitoring, and sewer/pipeline cleaning. Over $1M worth of vehicles including 3 CCTV trucks, 3 cleaning combo trucks, and 4 pickup trucks are part of the nearly $2M in business assets, as well $500k worth of generators, hand tools, computer equipment, and camera equipment, making the bank loan nearly 50% collateralized. The team consists of 10 full-time employees, including 1 Director of Operations, 1 Quality Control Supervisor, 1 Salesperson, and high skilled CCTV and Vactor Operators and field technicians. The owner currently manages business development, accounting, operations, administration, and IT and is willing to stay on for 2-3 years post-sale to ensure a smooth transition.

 

The company’s average sale size is approximately $20k, with an average of 10 work orders per month. Currently, the business has $478k worth of work in their pipeline. The company was deemed essential during COVID, allowing them to increase their rates due to the increase in the need for PPE gear and adding trucks to accommodate social distancing guidelines.

 

Priced at $4,100,000 and with a well-established reputation already in place, a new owner could easily boost sales by pursuing other areas in the general industry, such as construction and storm sewer system services. A 12.5% down payment of $512,500 returns $478,292 in the first year after debt payments – a 93% return on investment!

Business Highlights

Year Established: 2005

Location: Honolulu, Hawaii

Service Area: Big Island

Services: CCTV Inspections, line cleaning, manhole/corrosion inspections, flow monitoring, smoke testing

Clients: Primarily engineers for construction companies, municipalities, consulting engineers

Certifications: NASSCO PACP certified

Lease: 4,000 sq. ft. facility; 80% warehouse, 20% office

Reason for Selling: Approaching retirement

Personnel: 12: 10 FT, 2 PT; 1 Owner + 1 Director of Operations, 1 Quality Control Supervisor, 1 Salesperson, along with CCTV and Vactor operators and field technicians

Seller Training Period: 2-3 years

Growth Opportunities: Pursue more projects in the construction industry, expand services to include storm sewer systems and pipeline repairs/rehabilitation

Current Owners’ Responsibilities: Business development, some accounting, operations

Employees

  • 1 Owner
  • 1 Director of Operations
  • 1 Quality Control Supervisor
  • Field Supervisor
  • CCTV Operators
  • Vactor Operators
  • Field Technicians

Operations

  • Average Sale Size: $20k

     

  • Average number of work orders per month: 10

     

  • Value of recurring monthly revenue: $30k

     

  • Value of work in the pipeline: $478k

     

  • Value of backlog: $680k

Profit Margin

Average Profit Margin: 44%

Financial Highlights


List Price: $4,100,000

 

  • Gross Sales
    • TTM March 2020-Feb 2021: $2,087,431
    • 2020 (July 2019-June 2020): $2,360,891
    • 2019 (July 2018-June 2019): $2,230,416

       

  • Cash Flow
    • TTM March 2020-Feb 2021: $1,155,757
    • 2020 (July 2019-June 2020): $905,929
    • 2019 (July 2018-June 2019): $946,151
    • 3-Year Average Cash Flow: $1,002,612

       

  • A/R: $389,990

     

  • A/P: $13,000

     

  • Working Capital: $376,990


Assets of Business

  • Assets: $1,561,720
  • Equipment: $496,529: Generators, hand tools, computer equipment, camera equipment
  • Vehicles: $1,042,916: 2 CCTV trucks, 3 cleaning combo trucks, 4 pickup trucks
  • Furniture & Fixtures: $22,275
  • Intangible: Well-established in the industry, long-standing client base

Cash Flow Analysis

Description of Financial StatementP&L Statement
March 2020-Feb 2021
Tax Return
July 2019-June 2020 - Accrual
Tax Return
July 2018-June 2019 - Accrual
Tax Return
July 2017-June 2018 - Accrual
Tax Return
July 2016-June 2017 - Accrual
Notes
TTM2020201920182017
GROSS SALES$2,087,431$2,360,891$2,230,416$3,005,813$2,182,201
Net Income Shown on Financial Statement$-317,304$24,809$13,557$43,489$73,632
ADDBACKS
Compensation to Owner$230,981$507,692$571,846$524,308$516,923Owner
Other unrelated salaries$541,442$224,615$224,615$120,000$120,000Owner's wife: office admin
11% Tax on total W2 Salaries$84,979$55,846$87,611$70,874$70,062
Depreciation$123,010$11,725$431$528,137$49,081
Interest$4,866$10,433$14,854$2,583$0
Contributions/Donations$10,256$2,766$0$250$40
Cell Phone$3,600$3,600$3,600$3,600$3,600$300/month
Pension & Profit Sharing$0$158,138$122,656$118,746$127,64997% Personal
Meals$0$1,305$1,981$0$0
Replacement 1$-25,000$-25,000$-25,000$-25,000$-25,000
Replacement 2$-70,000$-70,000$-70,000$-70,000$-70,000
Holiday/Vacation Expense$60,000$0$0$0$0
Long-Term Health & Disability Insurance$6,095$0$0$0$0
Covid Cost$12,716$0$0$0$0One-time cost
Bonuses$306,000$0$0$0$0Family Members: Non-onward going
Rent Adjustment$23,135$0$0$0$0$6,278/month onward going
Qualified Retirement Plan$160,981$0$0$0$097% Personal
TOTAL ADDBACKS$1,473,061$881,120$932,594$1,273,498$792,355
Seller's Cash Flow = Total Addbacks + Net Income$1,155,757$905,929$946,151$1,316,987$865,987
Profit Margin55.37 %38.37 %42.42 %43.81 %39.68 %
Average Profit Margin: 44%

Valuation

Funding Example

Click to download NDA form

Print, sign and send to:

210 N 78th St. 2nd Floor
Omaha, NE 68114

Or fax to:

f 402.939.0857

Thinking of Selling?
When selecting an M&A firm, please use the following Scorecard: click here for our M&A Scorecard


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.