Denver 24 Yr Old Metal Manufacturing, High Gross Profit Margins, Lots of Work in Progress, Great Reputation.
The 2019 revenues were 1,161,662 with 183K in earnings. 2017 and 2018 had very similar numbers. This made the impact of Covid fairly easy to quantify for this company because of how predictable and steady its earnings have been.
This company has American made equipment that is newer and more valuable than I typically see the estimated value of the assets is 708K. The very high quality combined with the fact that the assets represent 3/4s of the sales price helps to push up the multiple just as it does for equipment rental and other companies with a large amount of easy to liquidate assets. Equipment rental often sells for 4 ½ to 5 times the earnings and have a smaller profit margin than this company does. This company also has long term recurring revenues from a well-known customer list, quality customers means no bad debt also, great reputation, loyal long term employees, and they have participated in many strategically important military and aircraft projects.
The company has earned a great reputation and are 5 star rated with Google and Facebook and A+ rated with the Better Business Bureau. They also were honored to be selected as one of the top ten machine shops in the country in 2009 by American Machinist Magazine which had 1200 entries. They were vetted for the processes and quality. Please submit the NDA in the first paragraph to be able to get the sales package with the data room link and video interview with the owner and business walkthrough to get a better feel for how good this opportunity is.
They have a long-standing customer base with nationally known names which they make both products and/or parts for. They do several large projects every year along with smaller ones for a solid/recurring base of customers. They have a very high percentage of recurring revenues which makes them more valuable. They currently have a record pipeline of 230K. They do 85% private and 15% Government work. The Government work is mostly DOD work.
They provide CNC milling, vertical and horizontal boring, CNC and Swiss screw machining, milling, I.D./ O.D and flat face grinding, engraving, conventional and CNC turning, drilling, tapping, and welding. They work with aluminum (all types), stainless steel, carbon steel, hastalltoy/ titainium, honeycomb plastics (all types), and tool steel (all types), tungsten alloys.
You will get approximately 708K in current value Assets! This includes 675K in equipment at current value. This equipment includes AAS ST20Y live tool (12’’ dia x 12.5 long), HAAS ST30 CNC Lathe (3.0 through, 21’’ dia x 26’’ length), HAAS VF-7 CNC Mill (84″ x 32″ x 30″), HAAS VF-4 CNC Mill (50″ x 20″ x 25″), (2) Fadal CNC 15 mills, Fadal CNC 3016 mill with 4th axis, Daewoo CNC 200B lathe (1.75’’ through), Daewoo CNC 200C lathe (2.0’’ through) w/ barfeed, Atrump engine lathe, (2) Manual mills, Acer Surface grinder, Summit I.D/O.D. grinder, and a Zeiss Dura Max CMM along with many traditional tools and equipment.
A Sales Price of 925K which is under 5 times the earnings is a great price for a Fabrication/Manufacturing Company with their reputation and 3/4s of the sales price is assets.
This is a “Fun” business to own that is growing and the Owners wants to make sure the new owner continues their growth and success. They have turned down some large projects for quality of life reasons having raised a family in the Denver Metro Area. The owners decided to maintain a 40 hour week for him and less than 30 hours a week for her so they could raise their kids and enjoy what they do.
The seller seeks 925K plus a small amount of inventory. This is a LLC and will most likely be an Asset Sale. The business will be offered with the Sellers keeping their cash, AR, and will be transferring the business debt free. Recurring revenue from large customers is very valuable. This should quality for a SBA bank loan for a qualified buyer which currently is paying the first 3 months of P & I payments and waiving their up front fee until September 25th.