28 Yr Old Commercial HVAC Co w/ 70% Recurring Revenue-Denver CO
The trailing 12 months earnings through September 30 2019 were 393Kfrom 4.9M in revenues. The 2018 earnings were 394K from revenues of 2.9M. The sales price has been set at 890K which makes the sales price just over two times the earnings which is very low for a company with this much in long term recurring revenue.
The buyer will get approximately 135K in hard assets made up of 8 vehicles customized for their industry, a trailer, and a lot of tools and equipment.
They have a long-standing, diversified, and mostly recurring customer base. Their customer base includes very large household local names of both businesses, Cities, and Government entities. They have no outgoing advertising or sales people and rely on their reputation, referrals, and current customers. He believes that it should be easy for a new owner to grow substantially.
This is a business that needs an owner with new energy who wants to grow the business again. The new owner does not need any licenses. The current owner didn’t have any and his employees already have all of the necessary licenses which the new owner can use also. It is recommended that the new owner obtains the basic local licenses including a construction license from the City of Denver which will take 6 months or less. For a Buyer with the right aptitude and/or experience, this business has the location, employees, equipment, reputation, and customers to grow significantly in the future.
The current owner charges 98 dollars per hour for labor and 150 dollarsper hour for emergence services which is exactly the same rate he inherited 4 ½ years ago. In other words, in a time of rising employee and material cost while all other similar companies have raised their rates, he hasn’t. This is an easy way to increase profits. Most of the companies that I have analyzed or represented are currently charging 20 percent or more than they are.
The seller is asking for 890K plus inventory estimated to be 25K with 90% down at the closing. He will be keeping his cash and accounts receivables and will pay off all debt including the accounts payables so that the business transfers debt free. It is an C Corp so this can be either a stock or an asset sale.
Location: They are located just off near Santa Fe and I25 allowing them to cover all of Denver Metro including Boulder and Castle Rock