The trailing 12 months earnings through May 31 2018 were 225,838 on revenues of 1,352,684. The earnings for 2017 were 171,878 from revenues of 1,210,000.
Price was just lowered on 9/13/18 from 475K plus inventory to 435K plus inventory.
They do HVAC, Plumbing, Backflow Prevention, and Refrigeration installs and service for Commercial and Residential. They do remodels and new construction. They are one of the biggest in their market in Commercial work including Restaurants, Hotels, and big multi-unit housing. They also do large custom homes and regular service calls 24/7.
The buyer will get approximately 65K in hard assets made up of 19.5K in Tools and equipment, 16K in vehicles, and 30K in inventory.
The company has a great reputation with a long-standing customer base that send them business in a recurring way. This includes Developers, General Contractors, Business Owners both large and small, etc. He helps to manage new work and customer relations and does not do any of the work himself. He turns down work every day and is already booked through year end. He doesn’t want to hire more people because he wants to retire. He says that he could grow 25% to 35% over the next year by hiring another employee or two and be able to take on more work without any additional advertising. A buyer will not have to worry about this business changing after the closing because he will have contracted work signed 5 months in advance and because his right hand man and longest term employee who manages the operations already knows that he is selling and is planning on staying. These are the two biggest risks in buying a construction company. Both of these typically increase the value of a company by increasing the premium that is applied to his earnings but in this case his family has to come first. He is retiring and relocating to be close to family. He will let a buyer use his licenses including his master plumbers license if he can legally do so until an owner gets his own or can use an employees. He will also offer a full transition of both the books and the business. Typically this means 3 months.
This is a business that is great the way it is but has the demand for them to do more work so a new owner with the working capital to take advantage of this will allow the business to grow much larger. It has the reputation, model, and customers already.
Location: This is Company is NW of Denver in one of the most beautiful places in the country and has seen very consistent growth with a lot of room to continue to grow for 10 plus years into the future.
Sales price is 435K plus 75% of his cost of inventory which is currently estimated to be $30K($22.5K added to the price). This price is now only 2x the earnings. He will carry up to 10% of the sales price.