The trailing 12 months revenues through October 31 2018 were 1.99M with 471K in earnings. 2017 had 1.63M in revenue with 429K in earnings. This company has seen long term growth and expects that to continue.
This company is worth over 3 times its normally adjusted earnings for many reasons: Well-known customer list, Long term customer loyalty, Profit margin, Reputation, Loyal long term employees, and they have participated in many of the largest and most recognizable jobs in Colorado. Their three year time weighted earnings are 490K which times a 3 times multiple comes to a sales price of 1.47M. The current sale price is well below the market at only 1.2M. This is only 2 1/2 times the trailing 12 months earnings and 2 ¼ times the time weighted earnings.
The owner and his wife have young kids and want to spend more time with family and their other family business. He believes the increase in revenues will continue based on a demand that is expected to continue in the large commercial construction market in Colorado based on the steadily increasing population, government surpluses, strong work in progress, and the long lead time of the type of work that they do.
They specialize in Architectural/Structural Iron, Stairs/Handrails, Pipe/Tube Bending, Ornamental/Custom Fabrication, Manufacturing, Prototyping, and Machining.
They have a long-standing customer base with nationally known names and have worked on some of the largest and most well-known projects in Colorado including some of the largest and most recent buildings in Cherry Creek. 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 have turned down some large projects for quality of life reasons. The owners have decided to maintain a 40 hour average work week so they won’t work on 2 or more large projects at the same time, even though they have the facility and ability to do so.
You will get approximately 225K in current value Assets! This includes 155K in Equipment at their cost, 65K in Trucks and Trailers, 10K in Small Tools, and 7K in Office Equipment.
A Sales Price of 1.2M which is 2 1/2 times the earnings is a great price for a Fabrication/Manufacturing Company with everything they have going for them. The new owner has some big shoes to fill but the owner is confident that the new owner can maintain their relationships based on a strong need for their capabilities. This business will always have large projects to choose from which ties back into their strong relationships with large construction companies.
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.
The seller seeks 1M down on a total sales price of 1.2M. This is an S Corp and the Sellers prefer an Asset Sale but will consider an Stock Sale. In either scenario, the business will be offered with the Sellers keeping their cash, AR, and AP which are not large balances and transferring the business debt free. Recurring revenue from large customers is very valuable. This should quality for a bank loan for a qualified buyer. The Seller is requiring the purchase of the property separately for appraised value. It is estimated to be worth 1.2M.