Return To Opportunities List

Opportunities

Civil Engineering Firm in Washington with $1.7M in Sales

High profit margins and selling at a low multiple!

CASH FLOW
$609,851

Specifications

  • Price
    $1,425,000

  • Revenue
    $1,699,822

  • Cash Flow
    $609,851

  • Location
    Seattle, Washington

  • Service Area
    Primarily throughout Washington, Oregon, & Alaska

  • Reason for Sale
    Consolidation

  • Employees
    11: 1 Owner (Project Engineer), 1 PT Professional Land Surveyor. 1 Engineer-in-Training, 4 Surveyors, 2 CAD Technicians, 1 PT Structural Engineer, 1 Office Manager

  • Intangible Assets
    Strong recurring client base, well-known in the industry, long-standing reputation

  • Profit Margin
    36%

This civil engineering firm in Washington had a 36% profit margin in 2020 and is selling at a very low 2.35 multiple! There is a solid team of 11 already in place, and the owner will stay on for 3 years to ensure a smooth transition and seamless transfer of client relationships. Established 15 years ago, this firm is licensed in Washington, Oregon, and Alaska, as well as having DBE, SBE, and MBE certification. Services include civil engineering, surveying, planning, design, permitting, and construction management in the public and private sector. Along with providing all civil aspects of design and construction, the company also conducts value engineering studies, involving a team of multiple disciplines that dissect a project and provide input on how to improve the function and cost; this service has proven to be indispensable in the industry.  The highly skilled team of 11 is based out of a 1,600 sq. ft. office building and includes the owner, who is a Project Engineer, 1 PT Professional Land Surveyor, 1 Engineer-in-Training, 4 Surveyors, 2 CAD Technicians, 1 PT Structural Engineer, and 1 Office Manager.

 

Assets are comprised of survey equipment, digital levels, total stations, scanners, high-end computers, and a multitude of top-notch engineering software including MicroStation, InRoads, Civil 3D, and Leica Geosystems.

 

This firm has substantial connections with several important projects. Continuing to build these relationships and engage in large projects will certainly lead to an increased client base and growth in revenue. Priced at $1,425,000, a 10% down payment of $142,500 returns $419,648 in the first year after debt payments – a 294% return on investment!

Business Highlights

  • Year Established: 2006
  • Location:  Seattle, Washington
  • Service Area:  Primarily throughout Washington, Oregon, & Alaska
  • Services: Civil engineering, surveying, planning, design, and permitting
  • Clients: Commercial, educational, institutional, large engineering, design firms, some residential
  • Certifications: DBE / SBE / MBE certified
  • Lease: 1,600 sq. ft. office building
  • Reason for Selling: Industry Consolidation
  • Personnel: 11: 1 Owner (Project Engineer), 1 PT Professional Land Surveyor. 1 Engineer-in-Training, 4 Surveyors, 2 CAD Technicians, 1 PT Structural Engineer, 1 Office Manager
  • Seller Training Period: 3 years
  • Growth Opportunities: Continue to connect and engage in important projects in the area
  • Current Owner’s Responsibilities: Overall firm management, public relations, some design elements

Financial Highlights

List Price: $1,425,000

 

  • Gross Sales:
    • 2020: $1,699,822
    • 2019: $1,330,905
    • 2018: $1,352,918
  • Cash Flow:
    • 2020: $609,851
    • 2019: $452,632
    • 2018: $394,683

 

*amounts may vary

Cash Flow Analysis

Description of Financial StatementP&L Statement
Jan-Dec 2020 Cash
Tax Return
Cash
Tax Return
Cash
Tax Return
Cash
Tax ReturnTax Return
Cash
Notes
202020192018201720162015
GROSS SALES$1,699,822$1,330,905$1,352,918$1,801,820$1,315,511$1,344,933
Net Income Shown on Financial Statement$431,420$285,007$267,471$519,342$216,850$364,010
ADDBACKS
Compensation to Owner$203,679$225,009$171,902$102,431$75,000$86,639
11% Tax on total W2 Salaries$22,405$24,751$18,909$11,267$8,250$9,530
Depreciation$0$1,633$20,002$59,202$1,369$2,122
Interest$0$29$0$0$595$2,718
Meals & Entertainment$8,220$2,243$2,439$0$0$2,720
Cell Phone$960$960$960$960$960$960$80/month
Owner's 401k$20,000$20,000$20,000$20,000$20,000$20,000$20,000/year
Replacement$-110,000$-110,000$-110,000$-110,000$-110,000$-110,000
Owner's Disability Insurance$3,000$3,000$3,000$3,000$3,000$3,000$3,000/year
Owner's Medical Insurance$22,742$0$$0$0$0
Owner's HSA$7,425$0$$0$0$0
TOTAL ADDBACKS$178,431$167,625$127,212$86,860$-826$17,689
Seller's Cash Flow = Total Addbacks + Net Income$609,851$452,632$394,683$606,202$216,024$381,699
Profit Margin35.88 %34.01 %29.17 %33.64 %16.42 %28.38 %
  • Profit Margin: 36%

Clients

  • Residential
  • Commercial
  • Educational
  • Institutional
  • Transportation & Roadway
  • Large Engineering & Design Firms

Specific information regarding clients is available upon the receipt of a signed Non-Disclosure Agreement.

Services

Personnel

  • 1 Owner
    • Project Engineer – overall firm management, public relations, design elements, marketing
  • 1 PT Professional Land Surveyor
  • 1 Engineer-in Training
  • 4 Surveyors
  • 2 CAD Technicians
  • 1 PT Structural Engineer
  • 1 Office Manager

Growth Opportunities

  • Continue to build connections/relationships in the area

Valuation Details

The Firm Advisors used a cash flow valuation methodology to determine the purchase price of the business.

Cash flow is the sum of business net income plus any owner perks and any non-onward expenses. Then we prescribe a multiple based on 20 parameter which valuate the health of the business. For this valuation, we used the 2020 Cash Flow value making the business price much more favorable to the buyer.

The formula used is as follows:

Cash Flow         x  Prescribed Multiple   =   Fair Market Value

 

With this information, the computation is as follows:

 

$609,851            x                2.35                 =        $1,433,150

Funding Example

Purchase Price:   $1,425,000

 

    10%Buyer Down Payment    $142,500 Must be unborrowed funds
    15%Seller Financing or Equity $213,750 5-year term at a rate of 4.50% = a monthly loan payment of $3,985
    75%Bank Loan $1,068,750 10-year term at a rate of 6% = a monthly loan payment of $11,865

 

  • Cash Flow: $609,851

     

  • Annual Payment:

     

    • To Seller: $47,819
    • To Bank: $142,384

       

  • Net Profit (after expenses and loan payment): $419,648

Purchase Price:

$1,425,000

$
%
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:
2020 Cash Flow
$
Annual Debt Service: $
RATIO:

Buyer's Net Operating Income (NOI)

The amount of money the Buyer will retain as profit.

Cash Flow:
2020 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: %

Attachments

Document Title / Description

This folder is empty.

Access to this Deal Room is restricted

Would you like to access the deal room?

Yes, please

Interested in
this business?

Complete the following information to sign an NDA and see more details!

Already have an account? Log in here.

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.