Return To Opportunities List

Opportunities

Solar Design & Installation

36% profit margin & $6M in backlog!

CASH FLOW
$2,831,879

Specifications

  • Revenue
    $8,000,308

  • Cash Flow
    $2,831,879

  • Location
    Kansas City area, Missouri

  • Service Area
    Iowa, Missouri, Kansas, Illinois

  • Profit Margin
    36%

  • Employees
    1 Project Manager &Master Electrician, 2 Electricians, 2 Business Developers, 1 Office Administrator, 1099 Contractors as needed

  • Intangible Assets
    Great reputation and referrals

  • Price
    $9,250,000

  • Down Payment
    15%

 

 

With a 36% profit margin and $6.2MM in the pipeline, this solar design & installation business in the Midwest is ready for growth and expansion! This business has five employees, including one master electrician, two part time sales callers, and two electricians.  The current owner is willing to carry 10% of the note, along with holding 10% in equity as well.

 

This company currently focuses Developing Solar PV projects.  The projects undertaken by this company are from inside sales and referrals.  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.  

 

This company has grown quickly since 2011 and they have installed over 100,000 individual solar modules for Midwest customers. 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. 

 

Business Highlights

  • Year Established:   2011
  • Location:  Kansas City area, Missouri
  • Service Area:   Iowa, Missouri, Kansas, Illinois
  • Average Jobs Last Year:   35
  • Lease:   1 Office and Warehouse
  • Reason for Selling:   Industry consolidation
  • Employees:   1 Project Manager &Master Electrician, 2 Electricians,  2 Business Developers, 1 Office Administrator, 1099 Contractors as needed
  • Hours:   8:00-5:00 Monday-Friday
  • Seller Training Period:    One Year Hands-on, Negotiable as an advisor after
  • Growth Opportunities: Increase direct sales, increase service area, in-house financing, residential installation
  • Current Owner’s Responsibilities:   Sales, Some Project Management, Financial Management of projects

Financial Highlights

  • List Price: $9,250,000
  • Gross Sales:
    • 2019: $8,000,308
  • Cash Flow:
    • 2019: $2,831,879
  • Assets Included in Purchase*
    • Intangible Assets:   Great reputation and referrals
    • Tools and Vehicle:   $30,000
    • Upcoming Work:   $1,800,000

*amounts may vary

Clients and Services

The direct customers are mostly business owners who are looking to take advantage of the tax credits and incentives available to save on operating costs such as utility expenses and taxes. This company has done work throughout the country and have a strong reputation for completing projects on time and at a fair cost.

Benefits to all areas include lower monthly utility bills, increasing property value, tax credits and depreciation, hedging exposure to rising electricity costs.

Employees

  • Project Manager – Master Electrician – FT
    • Installation
    • Manages on-site crews
    • Service
    • Sales
  • 2 Electricians – FT
    • Installation
    • Service
  • Two Inside Sales Callers – FT
    • Acquiring new business
    • Potential to make proposals
  • One Office Administrator/Project Coordinator
    • Coordinates Paperwork, permitting and utility interconnection process.
  • 1099 contractors
    • Hired as needed per project for installation

Growth Opportunities

  • Increase Sales
    • Increase inside sales
    • Increase subcontracted sales

       

  • Expand Markets
    • Residential
    • Agricultural

       

  • Expand Offerings
    • LED Lighting
    • Electrical work (Battery or car charging Installations)
    • Other Energy Efficiency or renewable technologies
  • Increase Service Area
    • Several nearby states not currently included in sales area
    • Would need to ensure you have licenses in states where you would like to operate

       

  • Increase Service Contracts
    • Currently no service contracts

Valuation Details

The Firm Business Brokerage 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 3.4.  With this information, the computation is as follows:

$2,831,879      x          3.4       =          $9,628,389

The Fair Market Value found above positions the business List Price at $9,250.000.

Funding Example

 

 

Purchase Price:                       $9,250,000

15%Down Payment:      $1,387,500

10%Seller Carry:               $925,000

10%Equity Roll:                $925,000

65% Bank Loan:             $6,012,500

Seller Financing 5-year term at a rate of 4.5% equals a monthly loan payment of $34,490.

Bank Loan 7-year term at a rate of 6% equals a monthly loan payment of $87,834.

After business expenses and loan payments, a buyer with a 15% down payment of $1,387,500 would retain a profit of $1,363,997, which results in an 98% 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 $9,250,000 with the terms listed above, the coverage ratio is 1.93. 

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.  

 

Purchase Price:

$9,250,000

$
%
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:
2019 Cash Flow
$
Annual Debt Service: $
RATIO:

Buyer's Net Operating Income (NOI)

The amount of money the Buyer will retain as profit.

Cash Flow:
2019 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.