16 Year Old Western Colorado Medium/Heavy Equipment Sales & Rental Company
The earnings makes this a ridiculously inexpensive business but he has to sell based on his age, health, increasing amount of time spent in Alaska, etc. The business is being offered for the current value of all of the assets. The vehicles and rental equipment current values are 2.075M which are the foundation of the total value of all of their assets of 2.239M which is also includes furniture, office supplies/misc, small tools, and other shop supplies. 2018 had revenues of 4.48M in revenues and 953K in earnings. The company is being offered debt free with the Seller keeping his cash and collectable accounts receivables as an asset purchase. The building is separate and is being offered for 2.15M which matches an appraisal done in 2016. He believes that it will appraise for more now. He will only sell both the business and the property which is traditional for location driven equipment rental companies.
The business has seen an increase in revenues from construction rentals by focusing more on Rental Income from the Construction Industry. In addition, there is confidence that the natural gas industry is now starting a real recovery in Western Colorado. Many of the companies felt they had to wait to make sure that ballot issue 112 failed which it did, before investing further in the area. Natural gas activity is increasing again in their area with the drilling of more than 150 new wells over the last 36 months. Plus, there is a lot of construction taking place that the new owner can continue to increase the rental revenues for. They are one of the closest large equipment rental/sales company to the 47 mile long roaring fork valley that extends from Glenwood Springs all the way to Aspen where there is a lot of construction taking place. Building permits are running at an all-time highs in the counties they service.
There is no better time to buy this company than right now. He has a full time salesman doing a great job increasing this currently. Before we sign any offers, we will need proof of funds or a pre-approval from a bank and an offer for both the real estate and the business to be bought concurrently. This is bankable but banks are requiring 20% down(not 10% unless they have direct experience already) and some additional working capital for well qualified buyers. If a buyer does not have direct experience, this will require over $675K in proven liquidity to get it funded which I will need proof of before we sign a LOI. Thanks, Jeff
WESTERN CO MEDIUM/HEAVY EQUIPMENT COMPANY
2018 had revenues of 4.48M with normally adjusted earnings of 952K before any add backs for the seller spending 5 peak summer months in Alaska every year. 2017 had 3.45M in revenue with 798K in normally adjusted earnings. 2019 is looking more like 2017 than 2018.
The equipment levels are currently at 2,239,000 which is broken up by office supplies/misc, shop supplies, small rental equipment, and vehicles/large rental equipment. He is offering the company for 2,235,000 currently. He is also about to purchase some new equipment for a new contract which will be added to the purchase price. The buyer should be able to get either an SBA loan with 20% down or an asset(Equipment) backed loan with the bank providing 75% of appraised value. I have contact info for bankers. Keep in mind that Heavy Equipment rental companies are locations driven and have one of the easiest to liquidate assets of all companies which is why they typically sell for 4 times their earnings or more. This is a very inexpensive company which is selling for less than 2 3/4 times its earnings.
Many long-standing customers with big names along with hundreds of other long-term customers has resulted in a high percentage of recurring business.
Equipment companies are typically “Fun” businesses to own.
The owner takes 22 weeks off a year. A new owner will be able to grow this company by being there and focusing on growth.
Location: Western CO along the I70 corridor