Opportunities
General Contracting, Electrical & Mechanical Services in Growing Area
Full admin staff on board to run day to day operations!
Specifications
This multi-trade service business has an 80% recurring client base and a 33% 3-Year average profit margin! With an incredibly versatile team of employees in place, 90% of their work is self-performed. They offer complete mechanical, electrical, and automation design, installation, and maintenance, as well as steel erection, concrete foundations, design build, and heavy equipment installation. The team of employees is incredibly versatile, with the ability to transition from trade to trade very easily. They have 25+ recurring clients with most of them having an MSA in place. In other cases, even though there is no contract in place, this company is their contractor of choice. The company started performing more mechanical services a few years ago, resulting in higher net income and profit margins. As they continue to do more on the mechanical side in the coming years, a new owner can expect to see profit margins and net income continue to increase, as profit margins from mechanical work is 35%, compared to 15% from general contracting services. There is tremendous room for expansion into the mechanical side, which currently accounts for only 9% of the business, but has a higher profit margin than the other services they provide.
Located near Charleston, South Carolina, the company operates from a two-acre property including four buildings. The seller owns the real estate and would rent it to the next owner for $3,500/month. The highly skilled and experienced team includes the Owner/President (who is willing to stay on as President or GM if desired by Buyer), 2 Project Managers, 3 Superintendents (2 of which are Assistant Project Managers), 1 Bookkeeper, and 1 Office Manager/Safety Coordinator.
Work is steady throughout the year and most projects are completed within a 100-mile radius of the office; temperatures in the area are generally in the 40’s-80’s, so they rarely have to hold jobs due to weather delays. There are no licenses limiting geographical expansion.
Business Highlights
Year Established: 2005; founded by the current owner
Location: Charleston, South Carolina
Service Area: Within 100-mile radius
Number of Clients: 25+ active recurring clients
Services: Design build, general contracting, concrete foundations, steel erection, heavy equipment installation, fabrication, and electrical, automation, fiber optics, mechanical, and HVAC design, installation & maintenance
Building: Four buildings on two acres includes offices, meeting rooms, warehouse, shop, and storage space
Lease: Seller owns real estate and would rent to next owner for $3,500/month – adjusted on Cash Flow Analysis
Reason for Selling: Retirement planning – looking at options
Employees: 8 FT; 1 Owner/President, 2 Project Managers, 3 Superintendents, 1 Bookkeeper, 1 Office Manager/Safety Coordinator
Seller Training Period: 2 years; willing to stay on as President or GM if desired – However, this is not necessary because the team is fully capable of running without the owner
Growth Opportunities: Expansion into mechanical side, which gives higher profit margins
Cash Flow Analysis
| Description of Financial Statement | P&L Statement Jan-May 2021 | Tax Return | Tax Return | Tax Return | Tax Return | Notes |
| 2021 | 2020 | 2019 | 2018 | 2017 | ||
| GROSS SALES | $1,753,577 | $4,756,828 | $5,478,368 | $4,384,111 | $3,571,594 | |
| Annualized | $4,208,584 | |||||
| Net Income Shown on Financial Statement | $1,214,619 | $1,251,892 | $1,760,804 | $1,888,366 | $448,536 | |
| ADDBACKS | ||||||
| Depreciation | $0 | $0 | $2,408 | $6,543 | $8,751 | |
| Interest | $0 | $0 | $0 | $862 | $2,947 | |
| Meals & Entertainment | $1,092 | $3,540 | $4,526 | $5,121 | $7,631 | |
| Cell Telephone | $750 | $1,800 | $1,800 | $1,800 | $1,800 | |
| IRA | $4,270 | $8,963 | $10,176 | $12,116 | $12,279 | |
| Life Insurance | $0 | $3,592 | $3,592 | $3,592 | $3,592 | |
| Compensation to Owner | $32,500 | $78,000 | $78,000 | $57,000 | $42,000 | |
| Rent | $-26,880 | $-16,800 | $-16,800 | $-14,700 | $-14,700 | $42k/year onward going |
| Retain Owner | $-47,917 | $-115,000 | $-115,000 | $-115,000 | $-115,000 | |
| TOTAL ADDBACKS | $-36,185 | $-35,905 | $-31,298 | $-42,666 | $-50,700 | |
| Seller's Cash Flow = Total Addbacks + Net Income | $1,178,434 | $1,215,987 | $1,729,506 | $1,845,700 | $397,836 | |
| Annualized | ||||||
| Profit Margin | 67.20 % | 25.56 % | 31.57 % | 42.10 % | 11.14 % |
2020 numbers down slightly due to COVID.
As the company does more niche work (mechanical), you can expect to see profit margins and net income increase because profit margins from mechanical work is 35% compared to only 15% from light contracting services.
Currently, only 9% of their work is being done in this high profit margin area.
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
Assets Included in the Purchase
- Assets: $1,351,330
- Heavy Equipment: $126,500 – Forklift, Mini Excavator, Skid Steer, Big 40 Welder, Scissor Lift, Air Compressor
- Vehicles: $808,720 – 13 Pick-up Trucks, 6 Bucket Trucks, 2 Diggers, 1 Crane
- Trailers: $101,350 – 16 Trailers, including 3 Gregory TTMA-100’s ($20k each)
- Tools: $99,210 – Ladders, pulleys, benders/vises, large hand tools, piping tools, metal shop, “hot” tools, gas powered tools, kits, jacks/hoists, electric saw, drills, fasteners, grinders, small hand tools, tech tools, welders, storage, safety, etc.
- Office Equipment: $15,550
- Included Working Capital: $200,000
Valuation Details
Funding Example
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: 2-year average cash flow |
$ |
| Annual Debt Service: | $ |
| RATIO: |
Buyer's Net Operating Income (NOI)
The amount of money the Buyer will retain as profit.
|
Cash Flow: 2-year average 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
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210 N 78th St. 2nd FloorOmaha, NE 68114
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