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Infrastructure Painting w/$33M in Revenue

Infrastructure & municipal projects such as bridges - $1.2M return in first year!

CASH FLOW
$3,713,647

Specifications

  • Price
    $18,050,000

  • Revenue
    $33,225,739

  • Equipment
    $2,800,000

  • Location
    New York & Ohio

  • Service Area
    New York, New Jersey, Pennsylvania and Ohio

  • Reason for Sale
    Retirement

  • Lease
    Main office: 2,000 sq. ft.: 5 Offices, conference room; NY Warehouse: 5,000 sq. ft.: Storage, office

  • Employees
    92: 6 Administrative, 3 Project Managers, 8 foremen, and ~75 painters

  • Intangible Assets
    Positive reputation for completing large-scale projects

 

Infrastructure & municipal projects such as bridges & tunnels - $1.2M return in first year!  Located in Ohio and New York, this company specializes in painting large infrastructure projects as well as any site preparation associated with a job since 2005.  Earning over $25,000,000 in 2018 alone, this company has a proven track record of successfully bidding and winning large contracts.  With $2.8MM in assets including tools of the trade and company vehicles, all equipment is in place for continued success.  The team of union foremen and painters work primarily for general contractors and maximize their awarded contracts through competitive bidding and strong professional relationships.  Currently, this company has $2,798,000 in assets and $47,000,000 in work-in-progress with many secured, upcoming projects. 

 

Operations are managed from the Ohio office and supplies are stored in a New York area warehouse.  There are additional field offices for each large project where location-based staff report daily.  The Ohio office is currently owned but is available for lease or possibly for purchase outside the sale of this business. 

 

Both owners currently work within the business.  One owner focuses on financial oversight and business management, while the other owner is the lead estimator and oversees field operations.  Both owners are willing to remain on staff throughout the transition or beyond, as desired.

 

Business Highlights

  • Year Established: 2005
  • Location:  New York & Ohio
  • Service Area: New York (90%), New Jersey, Pennsylvania, Ohio
  • Clients: General contractors working on infrastructure and municipal projects
  • Services: Industrial painting and site preparation such as bridges & tunnels
  • Building: Main office: 2,000 sq. ft.: 5 Offices, conference room; NY Warehouse: 5,000 sq. ft.: Storage, office
  • Reason for Selling: Retirement
  • Employees: 92: 6 Administrative, 3 Project Managers, 8 foremen, and 75 painters
  • Seller Training Period: Owner 1 - 1 year; Owner 2 - 2-3 years
  • Growth Opportunities: Manage utilization and profitability, increase team to increase capacity, increase local work contracts awarded, increase capital to increase bonding capacity
  • Current Owners’ Responsibilities: Owner 1: Financial oversight, business management; Owner 2: Estimates, field operations management

Financial Highlights

  • List Price: $18,050,000
  • Gross Sales:
    • 2019: $33,225,739
    • 2018: $25,281,685
  • Cash Flow:
    • 2019: $3,713,647
    • 2018: $3,573,399
  • Assets Included in Purchase:
    • Equipment: $2,166,000: Painting supplies, safety equipment, rigging, tools, office equipment
    • Vehicles: $680,000: Trucks, trailers
    • Work-in-progress: $47,000,000
    • Intangible Assets: Positive reputation for completing large-scale projects
    • CAPEX:  $100,000 or less annually

*amounts may vary

Cash Flow Analysis

Description of Financial StatementTax ReturnTax ReturnNotes
20192018
GROSS SALES$33,225,739$25,281,685
Net Income Shown on Financial Statement$3,038,876$1,808,239
ADDBACKS
Compensation to Owner$151,270$172,218Owner 1 - Entire Payment Package w/taxes
Other unrelated Salaries$148,249$188,142Owner 2 - Entire Payment Package w/taxes
Depreciation$114,993$617,950
Replacement$-250,000$-250,000To keep replace owners ($125K each)
Auto$14,644$27,12275% Personal
Fuel$9,794$13,4645% Personal
Travel$1,924$208,92175% Personal
Cell Phone$18,000$18,000$1,500/month
Pension & Profit Sharing$0$235,514Cash Injection Plan
One Time Costs$225,000$533,829Misc Repairs - For personal rental properties
Contribution$182,265$0
Interest - COGS$58,632$0
TOTAL ADDBACKS$674,771$1,765,160
Seller's Cash Flow = Total Addbacks + Net Income$3,713,647$3,573,399
Profit Margin11.18 %14.13 %
  • 2019 profit margin: 14%

Typical Clients and Services

Typical Clients:

  • General contractors working on large infrastructure projects
    • Local government projects
    • State government projects
    • Federal Government projects

 

Services:

  • Industrial painting
  • Site preparation
    • Sheeting
    • Remediation

 

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

Employees

Total Employees: 92

  • 6 Administrative
  • 3 Project Managers
  • 8 Union Foremen
  • ~75 Union Painters

Growth Opportunities

  • Manage utilization and profitability 
  • Increase team to increase capacity
  • Increase capital to increase bonding capacity

Valuation Details

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 4.9.  With this information, the computation is as follows:

$3,713,647      x          4.9       =          $18,196,870

The fair market value found above positions the business list price at $18,050,000.

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

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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.