Seller Financing Available
4.5M Assets, 1.2M Adj EBITDA, Huge Increase in Equity Potential
CO Heavy Equip Sales/Rental, 11M Rev, 1.2M adj EBITDA, 4.5M Asset
Garfield County, CO
Western CO Equip Sales/Rental, on track for $11M in Rev in 2014
The company is growing again with 7.6MM in revenue year to date through September of 2014 which is 20% higher revenue than the same period last year. The Seller went to Alaska in June and again in late July to mid-September for a total of 12 weeks. His trailing 12 months is back over 9.5MM in revenue but that includes the months that he was in Alaska. If you take the last 12 months skipping the ones that he was in Alaska, the revenues were over $11MM and the adjusted EBITDA close to 1.2MM. The inventory levels drop when he is away because he controls the checkbook. The oil and gas industry is starting to show signs of improvement in Western Colorado and the business is growing fast. I believe it will be worth a lot more than the current sales price over the next 2 - 3 years with a full time owner and new energy. They did 7.6MM in revenue year to date through September with him in Alaska and they did 7.15MM all of last year. Keep in mind that he took this business from a start-up in 2002(0 revenues) to 22MM in Revenue in 2008 with over 3.8MM on the bottom line and it has the exact same potential to do the same again with someone actively managing the business.
NDA link is: http://companybroker.com/buyer-profile-jeff.htm If it is blue you should be able to click on it, if not please cut and paste that to a URL line and it will give you the NDA. Please request the full sales package containing a detailed Data Room with financials and a Comprehensive Video on the entire operation and a full interview with the owner by clicking on the secure web link to the Confidentiality Agreement (CA). If you have any questions or comments on the CA please email me at email@example.com or call me at 303-905-7607. Thank you.
Year to date 2014 through September had revenues of 7.6MM with an adjusted EBITDA of 600K(9 months). 2013 Cash Flow was 860K on 7.1MM in Sales so the business is growing again very quickly. They should finish the year over 11MM with an estimated 1.2MM adjusted EBITDA
4.5MM down and you get over 4.5MM in hard assets which includes 4.1MM in inventory for rent or sale plus 250K in Parts and Equipment, 150K in Small Tools, and 25K in Merchandise. You get 4.5MM in Assets Debt Free! They have an additional 575K in new inventory that they have “floor planned” which they have paid the freight on that the new owner will take over the debt for.
The business also benefits from approximately 300K in Additional Equipment on consignment. They make between 5% and 10% with virtually no overhead on this equipment.
Many long-standing customers with big names like Exxon, Encanna, and Williams along with hundreds of other long term customers has resulted in a high percentage of recurring business, plus we add hundreds of new customers every year!
This is a “Fun” business to own and has loyal and long term employees that will all stay post-closing.
The owner spent 12 weeks in Alaska mining gold during peak season this year and 19 weeks the last three years. This negatively impacts the bottom line by at an estimated 150,000 to 400,000 dollars a year which means they should have made at least 750,000 year to date and 1.2MM last year. In fact, he takes 22 weeks off a year. Please click on the NDA link in the first paragraph to get the sales package to be able to see the video interview with the owner for his explanation. He controls the checkbook and therefore the inventory his sales team has to work with is dramatically decreased while he is gone. This was a huge issue in 2011, 2012, and 2013 and because he came back in the middle of the summer for 4 weeks in 2014, it had a smaller impact this year(estimate of 150K). A new owner will be able to substantially grow this company by just being there or by hiring a full time manager(we have identified a great candidate for an absentee owner).
Location: Western Colorado
The seller is confident that they will continue to grow again because of both the loss of competition, anticipated growth in the economy and energy sector, new outside salesman, and their location. They are starting to see a recovery in their area which means the next 2 to 10 years should be great for growth and profits. This could be the best time to buy this business ever because it has started to grow again and they don’t believe that is a short term trend.
The seller seeks 4.5MM down as part of a 5MM total sales price. Recurring revenue always deserves a premium and this company has a lot of recurring business based on its location, oil field customers, and reputation. It also has an enormous ratio of assets to the sales price. This can be either a stock or asset sale with either being a net zero debt transfer transaction for the buyer. In a stock sale, the owner will leave enough cash to cover the debt on the books zeroing it out and in an asset transaction, the debt will be paid at the closing and he will take any residual cash and net positive AR to AP’s collectable balance while leaving the remaining AR and AP in a neutral net collectable balance.
Brief Overview and Deal Points:
This is a truck and trailer sales, customization, and equipment rental business. They can find, customize, rent, or sell anything a buyer would need at competitive pricing with great margins. This Company gets orders from all over the country as proof of how impressive their operation is. They are the only medium to heavy equipment sales and rental company for 40 miles in every direction in the heart of America’s energy development in all areas: oil, gas, and oil shale. As energy development recovers, it will directly benefit their growth. They have a huge advantage in providing the equipment and trucks energy companies will need as the oil and gas in their area is extracted. They are located near the largest deposit of oil and gas in the United States and one of the largest in the entire world. It is not if but when this formation goes into full production. The oil companies have already started drilling for gas and have been improving their oil extraction techniques for decades and are ready to start full production soon.
This article was dated 3 11 2014: SHALE OIL DEVELOPMENT CLOSER?
The White River Field Office of the Bureau of Land Management has given approval to the development plans for ExxonMobil and Natural Soda Holdings Inc. for the companies‚ research, demonstration and development leases on federal land southwest of Meeker in Rio Blanco County. The projects still need approval from the Colorado Division of Reclamation, Mining and Safety. The approval marks the return of ExxonMobil to oil shale development following Exxon‚s shutdown of the Colony Project in 1982.
-GJ Daily Sentinel, 03.11.14
Also click on http://www.eccos.us/index.php?option=com_content&view=article&id=10&Itemid=6 This will create the need for other equipment sales and rental locations along the formation which runs all the way to North Dakota which could dramatically increase sales and the bottom line. Plus, Colorado is the best State in the country to own a business.
The buyer will also step into a solid pipeline of recurring revenue with some of the highest gross profit margins in the industry because of their operating model and location. The seller is very positive about the short and long-term projections of the business which is why they are comfortable carrying a portion of the sales price. In fact, Ursa, Encanna, and Williams are all currently increasing their rig count in the area which is the first of these type of increases in years and will directly and indirectly add sales to this company. The company has below average overhead for their size and has relationships with some suppliers that allows them to carry some inventory on consignment which frees up working capital and saves them money.
They are 11 years old and have the biggest name and the finest reputation in the region. The company is a S Corp and they would prefer a Stock Sale. A Stock sale makes sense based on the contracts they have in place with both customers and vendors and that they don’t have a lot of exposure to liability. The seller will agree to full reps(indemnifications) and warrantees and further guarantee a solid legal and business standing. In fact, the seller will offer a full “right to off-set” against the sales price for any liabilities that originated before the closing. They also have a great record for safety (OSHA) and no legal battles.
The business was started from scratch by the current owner who owns the land and built a custom building in 1999. He will sign a non-compete. He will offer a full time transition and stay on part time if the new owner wants him to. He says it is a fun business to own. He says a buyer does not need any special skills because he can teach him/her what they will need to know to grow the business.
They are the largest independent sales and rental companies in their area and are an exclusive dealer for a lot of the equipment that they sell/rent which means that they can buy it at the lowest prices available anywhere. The company offers the newest and best maintained equipment and has long term relationships with most of the area’s largest companies. They know their customers need reliable equipment and have the finest techs and mechanics in the region. It took years to train them and they treat them well. They can buy the equipment so inexpensively that they can actually rent it for years and in some cases still sell it for close to their original purchase price. Their most profitable sales begin with a rental that customer ultimately buys.
The owner states “We are the only Dragon dealer in Colorado and have permission to sell where ever we want to, we sell into Utah, Wyo, SD, ND, Idaho, NM, Neb, KS. We are also the exclusive the Ranco dealer on the Western Slope, the Eager Beaver dealer for Colorado, NVE(vacuum pumps) dealer for Colorado, a dealer for Nuttall trailers, and Hyundai large equipment. We buy directly from Wacker, Genie, MMD(air compressors), Hustler mowers , Pro Tech truck accessories , and Vibrotech screens. We are what Peterbilt calls a MAPP dealer for parts, main reason we deal in PACARR trucks, Pete & Kenworth and can provide parts and service at a reduced price because of this and are starting to get the word out.”
We have 4 Main Revenue Areas:
1) Equipment Rental - They have hundreds of pieces of equipment that they track how often they are rented and keep them maintained accordingly. They sell/rent/customize trailers, most Caterpillar Equipment including 3 D-8’s, Sakai compactors, Hyundai, Wacker light towers, generators, Genie Man lifts, Vibrotech screens, fracking trailers, etc.
2) Sales – The company has dealership status with several big names and they also buy, fix up, and resell equipment. This is an area that can be greatly improved with the owner out of town 15 to 22 weeks a year.
3) Service – They provide long term service for the equipment that they sell with is an area that can also be expanded to other equipment. The owner has considered being a tire dealer and offering a mobile service for both tires and on site equipment service and repairs which is a big and very profitable need for his customers.
4) Customization – The oil industry in particular has special requirements that they are uniquely able to fulfill in their area. They get orders to customize trailers for specific jobs that their regular customers need. This is high margin work that really increases dramatically when the energy companies are expanding their production which they are starting to see again.
“We have the finest employees anywhere. We have 16 employees that are capable of running the business on their own and are all trustworthy, experienced, loyal, and will all stay after the transition. The two salesmen will both stay which is important for the new owner. The new owner could add a 2nd outside sales person if their region continues to recover.
This company is located in a beautiful and very moderate weather part of the Colorado with over 300 days of sunshine per year. This area is obviously growing with a brand new hospital, high school, hotels, theater, shopping, etc.
They recycle oil which is either from their equipment or from a service they offer that allows customers to drop it off for free. They use this oil to heat our building in the winter which saves them a lot of money. This also positions the company as being GREEN.
Their location includes 11,200 Square feet of very functional space on 5.7 acres of property. The business can be seen from I-70 and is located along the busiest road in town with tremendous exposure meaning free advertising. The building is custom designed for working on equipment and trucks as you can see from the video walk through of the business in the link provided in the sales package. This is the largest and most functional sales, repair, and rental shop location in the region with plenty of room to accommodate a larger business as it grows. The real estate described here can be leased at the market rate or purchased for 2.3MM which is very close to its appraisal value almost three years ago. The property is certainly worth much more now and recently passed a Phase 1 environmental test. The lease will start at 104,000 per year which is what it was adjusted to on the Net Benefit to Owner Spreadsheet in the data room link we will send you after we get the NDA.
“We have found a comfortable amount of advertising that works for us. We will grow in the coming years, without any changes to our advertising or marketing efforts but we could grow faster with additional services and advertising.”
Growth and Expansion: The seller has identified other locations that they could profitably expand into. The model that they have can be replicated profitably. They know what works and what doesn’t work and can use their relationships and successful model in a 2nd location for a high net worth buyer. They hired an outside sales person with this in mind that started in March of 2014 and is starting to make a positive impact. It took him some time to get established but the owner is very happy with his progress and believes he will make a big difference in 2015. He is on a base plus 20% of the net profit which has him very motivated. They also can add a mobile repair and tire service, sell tires from their current location, advertise more, add new vendors, etc.
The owner is retirement age and wants to spend his summers gold mining in Alaska but will transition the business over the next year taking his regular salary. He requires a 100% sale with approximately 80% down. He will skip or dramatically reduce the time he spends in Alaska next summer to accommodate the sale. The seller’s commitment to carry some of the sales price confirms his confidence in the short and long term performance of the business and the achievement of the cash flow and revenue targets stated above.
Plus, Colorado is THE "#1" fastest growing and strongest economies in the United States, per Money.MSN.com and Business Insider. This article ranks all 50 states by eight economic measures including GDP growth, housing prices, job creation and exports. http://money.msn.com/investing/the-50-state-economies-from-worst-to-first
Please Call of Email for Information: The seller or the broker is available at any time to meet to discuss your interest in this offering.
Thank you for your interest in this offering.
Jeff Chapman Eisnaugle
Company Broker Group, LLC.
999 18th St Ste 3000
Denver, CO 80216