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Solar Design & Installation – 95% Commercial

Seller will stay on for 4-5 years and has a combined 30% vested interest!

CASH FLOW
$2,548,004

Specifications

  • Price
    $8,000,000

  • Revenue
    $8,023,688

  • Cash Flow
    $2,548,004

  • Location
    Kansas City Area, Missouri

  • Service Area
    Iowa, Missouri, Kansas, Illinois

  • Profit Margin
    32%

  • Employees
    1 Master Electrician, 2 PT Sales Callers, 2 Electricians, 1099 Contractors as needed

  • Intangible Assets
    Great reputation and referrals

With a combined 30% seller vested interest, a 32% profit margin, and $1.5M in backlog, this solar design and installation company has grown quickly since 2011. They have installed 500 solar photovoltaic (PV) systems totaling over 37 Megawatts of solar PV modules—totaling to over 112,000 individual solar modules since their inception. They have five employees, including one master electrician, two part time sales callers, and two electricians. Focusing on developing Solar PV projects, these projects are undertaken from inside sales and referrals. Solar PV projects have a 20% - 45% margin, making this a great revenue generating business. While they currently focus their efforts on commercial projects, there is room to expand into the agricultural and residential markets. The current owner is willing to carry 15% of the note along with holding 15% in equity as well, allowing for a 4-5-year transition.

Projects vary in size from as small as $25,000 and can exceed upwards of $1.5 million. Longstanding relationships with distributors and subcontractors help show that this business has been providing quality work in the solar industry. Minimal competition in the service area and immediate energy savings for customers make this an easy sell. This business is ready for a new owner to take it to new heights.

At the purchase price of $8,000,000 the seller has $2,400,000 in vested interest.

 

Business Highlights

  • Revenue: $8,023,688
  • Cash Flow: $2,548,004
  • Year Established:   2011
  • Location: Kansas City Area, Missouri
  • Service Area:   Iowa, Missouri, Kansas, Illinois
  • Average Jobs Last Year:   22
  • Lease:   1 Office and Warehouse
  • Reason for Selling:   Industry consolidation
  • Employees:   1 Master Electrician, 2 PT Sales Callers, 2 Electricians, 1099 Contractors as needed 
  • Seller Training Period:    4-5 years and will roll equity and continue to run the business
  • Growth Opportunities: Increase direct sales, increase service area, in-house financing, residential installation
  • Current Owner’s Responsibilities:   Sales and Some Project Management

Employees

  • Project Manager – Full Time Master Electrician ($78k + bonuses = 100k)
    • Responsibilities:
      • Installation
      • Manages day-to-day operations and on-site crews
      • Service
      • Sales
      • Coordinated design, permitting, and shipments
      • Site Survey’s
    • Been with the company for over 3 years and has worked with Kirk for 10 years
    • Licensed Master Electrician in the state of Missouri
    • Certified NABCEP PV Installers

 

  • 2 Full Time Electricians + More as Needed ($30/hour + bonus = 120k)
    • Installation
    • Service
    • Salary is incurred as a project cost

 

  • 2 Part Time Inside Sales Business Development Callers
    • Acquiring New Business

 

  • 1099 contractors
    • One exclusive sub-contractor
    • Hired as needed per project for installation
    • Engineering and Design work
    • Situationally dependent hiring with the goals to hire temps as little as possible
    •  (https://www.tradesmeninternational.com/)

 

In 2019, the company subcontracted roughly half of the mechanical installation of arrays. They have an in-house crew that they used for the other half. They hire outside engineers to stamp design drawings for permits.

Service Area

This company currently serves Iowa, Missouri, Kansas, Illinois. In October of 2019, Fitch Solution Marco Research predicted that Midwest region “will be a main driver towards the 100 GW of solar power capacity expected to hit the U.S. over the next 10 years.” The Midwest continues to be a major service area for growth in the solar industry.

 

Operations

As a renowned solar energy company, the professionals at this company can provide solar energy installation services to power your business, factory, school, buildings, or farm. Solar power is a wise investment for all business and personal use. Installing solar panels will increase the value of property, reduce monthly utility expenses, and reduce a carbon footprint on the environment. Using clean and renewable energy also has financial incentives in the form of tax credits and depreciation. Gaining energy independence though solar energy reduces exposure to future utility company price increases.


This company services the following industries:

 

  1. Commercial (95%)
    1. Competitive business owners are constantly looking for ways to reduce ongoing costs. Utility costs that are subject to increasing rates and fees have often been looked at as the cost of doing business. Installing solar panels on commercial property is a sound economical investment.
  2. Industrial
    1. High-energy consumption is a given with large enterprises. Offset these uncontrollable expenditures by transforming the energy of the sun into free energy.
  3. Agriculture
    1. Supplying electricity to an entire farm can be costly. Solar energy can cut down on monthly utility expenses. Solar panels are an ideal solution for savvy farmers looking to reduce costs and reduce tax burdens.
  4. Residential
    1. Leaving a better environment for the next generation begins at home. Why not increase the value of your home at the same time? Reducing a carbon footprint with clean, emission-free solar energy will increase the value of a home and reduce the monthly energy bill.

 

 

Currently, this company focuses on Commercial and Industrial installations. Residential and Agricultural installations are an area for potential growth. All projects have a grid connection/arrangement.

Financial Highlights

  • List Price: $8,000,000
  • Gross Sales:
    • 2019: $8,023,688
  • Cash Flow:
    • 2019: $2,548,004
  • Total Assets Included in Purchase: $417,962
    • Intangible Assets:   Great reputation and referrals
    • Vehicles:   $210,236
    • Backlog: $1,466,538
    • Accounts receivable: $207,726

*amounts may vary

 

Cash Flow Analysis

Description of Financial StatementP&L Statement
Jan-Apr
P&L StatementTax ReturnP&L StatementTax ReturnTax ReturnTax ReturnNotes
2020201920182017201620152014
GROSS SALES$1,334,740$8,023,688$1,214,030$1,833,835$1,062,845$1,841,719$2,416,097
Annualized$4,082,734
Net Income Shown on Financial Statement$362,868$2,408,985$177,323$506,389$123,341$266,029$371,856
ADDBACKS
Compensation to Owner$84,633$174,000$55,080$95,167$102,876$128,400$138,500
Contributions/Donations$160$0$0$0$0$0$0
Interest$0$14,868$5,533$3,804$1,213$4,269$332
Pension/Profit Sharing$49$38,500$5,619$5,862$104,115$105,136$34,500
Non-Business Telephone$400$1,200$1,200$1,200$1,200$1,200$1,200$100/month
Meals & Entertainment$468$451$442$650$0$0$0
Gas $3,877$0$0$0$0$0$0
Health Insurance$5,314$0$0$0$0$0$0
Replacement$-30,000$-90,000$-90,000$-90,000$-90,000$0$-90,000
TOTAL ADDBACKS$64,901$139,019$-22,126$16,683$119,404$239,005$84,532
Seller's Cash Flow = Total Addbacks + Net Income$427,769$2,548,004$155,197$523,072$242,745$505,034$456,388
Annualized
Profit Margin32.04 %31.76 %12.78 %28.52 %22.84 %27.42 %18.89 %
Profit Margin: 32%

Revenue Breakdowns

Backlog Breakdown

Revenue

Size (KW)

$655,070

503.9

$239,600

150

$242,200

150

$142,200

92

$79,600

49.7

$69,900

50

$38,268

20

Total

$1,466,538

Project Revenue Breakdown

2019

% of Sales

$1.5M

18.7%

$1.146M

14.3%

$884,000

11.0%

$337,177

4.2%

$309,956

3.9%

Valuation Details

Funding Example

Purchase Price:   $8,000,000

 

    15%Buyer Down Payment   

$1,200,000

Must be unborrowed funds

    15%Seller Carry-

Performance Based   

$1,200,000

 

    15%Equity Roll

$1,200,000

 

    55%Bank Loan

$4,400,000

10-year term at a rate of 6% = a monthly loan payment of $48,849

 

Ø  Cash Flow: $2,548,004

 

Ø  Annual Payment To Bank: $586,188

 

*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.

Differentiators

Growth Opportunities

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