Seller Financing Available
3.7MM in Assets, Cash Flow of 860K, Huge Increase in Equity Potential
CO Heavy Equipment Sales/Rental Co, $3.7MM in Assets, $10M Rev
Garfield County, CO
Western CO Equip Sales/Rental, on track for $12M in Rev in 2014
The Seller has decided to focus on growth again, not go to Alaska this year, and hired an outside sales person as of March of 2014. The company is already growing again but I believe it will be July 2014 before it will have enough improvement to be worth what he is asking for it. Plus, the oil and gas industry is starting to show signs of improvement in Western Colorado. The Seller believes they will do $13MM to $15MM in revenue this year. Sales were $4.9MM through May and improving. Keep in mind, he took this business from a start-up in 2002 to $22MM in Revenue in 2008 with over $3MM on the bottom line it has the exact same potential to do the same again with him back managing the business. That is why it has the potential equity growth that it has. Someone will steal this company for $5MM this year and it will be worth twice that over the next 3 to 5 years.
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 firstname.lastname@example.org or call me at 303-905-7607. Thank you.
10 Year Old Medium/Heavy Equipment Sales and Rental Business
2013 Cash Flow was $800K on $7MM in Sales
$3.7MM down and you get $3.7MM is hard assets which includes $3,328,236 in equipment at their cost which is over $4.7MM in market value(what they will sell it for). The asset total also includes $50K in Parts and Equipment, $150K in Small Tools, and $25K in Merchandise. You get $3.8MM in Assets Debt Free!
The business also benefits from over $500K in Additional Equipment on consignment which is not their assets but the least risky and least expensive way for them to make money on sales. 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 19 weeks last year in Alaska gold mining during peak season. This negatively impacts the bottom line by at least $400,000 a year which means they should have made at least $1,2MM last year. In fact, he takes 25 weeks off a year. See the video interview with the owner to fully understand that he is unable to buy and sell equipment for a profit while he is gone and therefore the inventory his sales team has to work with is dramatically decreased until he returns. A new owner will be able to substantially grow this company by just being there more than half of the year or by hiring a new manager and we have a perfect candidate for an absentee owner. For Example, the owner got back from Alaska on Sept 23rd, 2013 and did over $1MM in Revenue in Oct, Nov with net income of 13% or higher. The business averaged $350K per month in revenue during the 4 months he was gone and only broke even and summer is typically their peak season.
Location: Western Colorado
Seller’s Quote: “I am confident that we will grow in 2014 and beyond because of both the loss of competition, anticipated growth in the economy and energy sector, and our unmatched location. We are starting to see a recovery in our area which means the next 3 to 10 years should be huge for us ". This could be the best time to buy this business over the last 5 years and it is the best time of year to buy also!
The seller seeks $3.7MM down as part of a $4.7MM 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 leaving the AR and AP in a positive net 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 located 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 in that formation is extracted over the next 50 years. 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 been improving their extraction techniques for decades and are ready to start full production. 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. re is more good news about the gas basin: Thursday June 6, 2013 WPX: MORE RIGS COMING TO THE PICEANCE Energy company WPX Energy Wednesday announced it will deploy seven drilling rigs in the Piceance Basin natural gas field for the remainder of 2013, two more than the company had previously announced would be in operation in the area. The company said the additional rigs were a product of slowly rising prices for natural gas and the company‚s existing investment in infrastructure in the Piceance Basin. GS Post-Independent, 6.06.13
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. “2013-2014 should be great years with the economy and the energy industry recovering”, the owner states. In short, the sellers are bullish on 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 a very good sign for the future of the company. Plus, “A couple of direct competitors have shut down over the last 3 years within a 60 mile radius of our location.” The company also has very little overhead for their size and has relationships with some suppliers that allows them to carry inventory on consignment which frees up working capital and saves them money.
We are over 10 years old and have a solid name and the finest reputation in the region. The owner owned the largest trucking business in the area before this company and is very well known and liked along with the company itself and its employees. The company is a S Corp and they would prefer a Stock Sale. A Stock sale is not a requirement but 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, no “ghosts in the closet”. In fact, the seller will offer a full “right to off-set” against the sales price for any liabilities that originated before the closing. We 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 knows his customers and enjoys the buying and selling of equipment. 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.
We are one of the largest independent sales and rental companies around and are a dealer for a lot of the equipment that we rent which means that we can buy it at the lowest prices available anywhere. We also have always offered the newest and best maintained equipment. Most rental companies keep equipment until it totally breaks down; not us. We believe the customer wants the most reliable equipment in the best shape possible. Plus, we also have the finest Techs and Mechanics in the region. It took years to train them and we treat them well. We buy the equipment so inexpensively that we can actually rent it for years and in some cases still sell it for close to our original purchase price.
The owner further states “We are the only Dragon dealer in Co and have permission to sell where ever, we sell into Utah, Wyo, SD, ND, Idaho, NM, Neb, KS. We are exclusive the Ranco dealer on the Western Slope. We are also an Eager Beaver dealer for Colorado. Basically a dealer in Co for Nuttall trailers , paper work is in progress, Working on a dealership agreement with Wink Trailers. We buy direct from Wacker, Genie, MMD(air compressors), Hustler mowers , Pro Tech truck accessories , Vibrotech screens. We are the NVE(vacuum pumps) dealer for Colorado. We are what Peterbilt calls a MAPP dealer for parts, main reason we deal in PACARR trucks, Pete & Kenworth.”
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, 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 when the owner is in town. This is an area that can be greatly improved with the owner out of town 25 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 also with onsite service 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 are constantly getting 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. It is good timing to add an outside sales person like we had when the area was growing back in the mid 2000’s” which is a very inexpensive way to grow the company because they would be paid a commission on new sales and rentals.
This company is located in a beautiful and very moderate weather part of the Colorado with 300 days of sunshine per year. This area is obviously growing with a brand new hospital, schools, 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.
Another area that a new owner can expand the business into is more on-site equipment service and repair for whatever a customer’s needs might be. They also have the ability to offer a mobile tire service also which is highly profitable.
Their location includes 11,200 Square feet of very functional space on 5 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 above. 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 $2.2MM which is equal to its appraisal value almost two 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. Our sales can be much greater if the new owner hires an outside salesperson to visit job sites and other industrial companies.”
Growth and Expansion: The seller has identified other locations that they could profitably expand into. The model that we have mastered can be immediately replicated profitably. Most growth plans have inherent risk. This one does not. Getting the highest quality techs and mechanics will also be easy because we know what to look for in workers. “We know what works and what doesn’t work and how to grow using our successful model.”
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 this 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.
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.
For 20 Years, We Sell Businesses "Quickly and Quietly"
999 18th St Ste 3000
Denver, CO 80216