Commercial Concrete Pumping – 50% Collateralized
Owner does oversight only – no labor!
The owner of this business does oversight only – no labor! This Northern Indiana concrete pumping and truck rental business has over $3MM in assets with an ongoing cashflow of more than $1MM. Established for 15 years, this company is operating at the top of their field. The team of 10 employees includes an Operations Manager, seven operators, one bookkeeper, and a shop assistant. Equipment includes seven pumps, a placing boom, a Line Dragon as well as a shop full of any necessary equipment, inventory, and tools required to complete the job. There is also an additional $20,000 in vehicles including trucks, trailers, and a forklift. Work is completed within 100 miles of the headquarters and encompasses Northern Indiana, Southern Michigan, Northern Illinois, and the Chicago Metropolitan area.
The owner works part-time and currently oversees financials, legal, and insurance matters. By design, this business can operate on a day-to-day basis with little input from the proprietor. With processes and procedures in place, the business can operate seamlessly with minimal owner oversight.
The diverse customer base consists of both residential and commercial customers with projects ranging from single family homes to slab foundations, bridges to treatment plants, and roadways to pilings. Meeting the needs of a wide customer base sets this company apart from its competition as well as their positive reputation for reliable and superior results.
- Year Established: 2004
- Location: Chicago
- Service Area: Indiana, Southern Michigan, Northern Illinois including Chicagoland
- Clients: Commercial and industrial, infrastructure, residential
- Services: Concrete pumping, truck rentals
- Building: 10,500 sq. ft.: 1,500sq. ft. office, 7,000sq. ft. inside parking, 2,000 sq. ft. storage (rack and open)
- Reason for Selling: Retirement
- Employees: 10: 1 Operations Manager, 7 operators, 1 PT bookkeeper, 1 shop labor
- Hours: M-F 7-5 with concrete pumping done at hours requested by the customer, 24/7 dispatch
- Seller Training Period: 6 months
- Growth Opportunities: Increase exposure and networking in Chicagoland to acquire more business in this area, extend service area south to include a greater number of agricultural projects
- Current Owner’s Responsibilities: Oversight only, no labor
- List Price: $4,250,000
- Gross Sales:
- 2019: $3,095,219
- 2018: $3,301,210
- 2017: $3,121,409
- Cash Flow:
- 2019: $1,047,327
- 2018: $1,078,095
- Assets Included in Purchase*
- Equipment: $3,140,000: Pumps, placing boom, Line Dragon, parts, lubricants, tools, shop equipment, Hotsy, pipe, clamps, etc., 2 vehicles, 1 forklift, 2 trailers
- A/R: $350,000
- Intangible Assets: Smooth processes and organization within the business, reputation for reliability, well-trained and tenured staff
*amounts may vary
Cash Flow Analysis
|Description of Financial Statement||P&L Statement||Tax Return||Notes|
|Net Income Shown on Financial Statement||$668,758||$515,837|
|Compensation to Owner||$104,000||$126,000|
|11% Tax on total W2 Salaries||$11,440||$13,860|
|Meals & Entertainment||$0||$0|
|Insurance Premiums for Owners: Health, Life, Auto||$24,300||$24,300|
|Pension Union Charges||$0||$28,680|
|Insurance Premiums for Owners: Health, Life, Auto||$1,140||$1,140|
|Insurance Premiums for Owners: Health, Life, Auto||$2,000||$2,000|
|Proceeds from sale of assets||$0||$-162,472|
|Personal Property Tax||$0||$30,000|
|Seller's Cash Flow = Total Addbacks + Net Income||$1,047,327||$1,078,095|
|Profit Margin||33.84 %||32.65 %|
Clients & Services
- Commercial and industrial
- Hospitals and medical centers
- Project examples
- Site pads
- Heavy industry
- Municipal and Infrastructure
- Project examples
- Waste water treatment
- Roadways and highways
- Project examples
- Single-family home owners
- Multi-family living building owners
- Project examples
- Poured walls
- Large outdoor concrete areas (patio)
Total Employees: 10
- 1 Operations Manager
- 7 Operators
- 1 Part-time bookkeeper
- 1 Shop labor
- Increase exposure and networking in Chicagoland to acquire more business in this area
- Extend service area south to include a greater number of agricultural projects
The Firm 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 2019 cash flow was used with a prescribed multiple of 4.15. With this information, the computation is as follows:
$1,047,327 x 4.15 = $4,346,407
The fair market value found above positions the business list price at $4,250,000.
12.5%Buyer Down Payment: $531,250
12.5%Seller Financing: $531,250
75%Bank Loan: $3,187,500
Seller financing 5-year term at a rate of 4.50% equals a monthly loan payment of $9,904.
Bank loan 8-year term at a rate of 6% equals a monthly loan payment of $41,888.
After business expenses and loan payments, a buyer with a 12.5% down payment of $531,250 would retain a profit of $425,818, which results in an 80% 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 $4,250,000 with the terms listed above, the coverage ratio is 1.69.
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.
*The Firm Business Brokerage is not a real estate brokerage and therefore the staff will not handle any aspect of the lease, sale or purchase of real estate.
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: $
|Monthly Payment to Bank:||$|
|Yearly Payment to Bank:||$|
|Monthly Payment to Seller:||$|
|Yearly Payment to Seller:||$|
|Total Monthly Debt Service:||$|
|Total Yearly Debt Service:||$|
Fixed Charge Coverage Ratio
The bank will require a minimum ratio of 1.5 to be lendable.
2019 Cash Flow
|Annual Debt Service:||$|
Buyer's Net Operating Income (NOI)
The amount of money the Buyer will retain as profit.
2019 Cash Flow
|Annual Debt Service:||-$|
Buyer's Return on Investment (ROI)
The rate of return on the Buyer's down payment.
|Document Title / Description|
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