Large Concrete Mfg. Co. Selling for about "Book Value", Cash Flows $2M
South Denver, $10MM in Assets Debt Free, Cash Flow $2MM on $12M in Sales
South Metro Denver. 25 years Old, Largest Independent "Specialized" Concrete Manufacturer in Colorado. Location, South Metro Denver, Co.
Sales Price: $10,000,000
Sales Includes 26 acres and 57,000 SF of Operational/Manufacturing Space.
FY 2014 Cash flow was $1,996,504 on $11,559,711 in sales.
FY 2015 Cash Flows is "projected" to be $2,000,000 on $11,500,000 - $12,000,000 in sales (The seller is likely being conservative in his projections here).
This transaction includes approximately $10,250,000 of assets, equipment, inventory, real estate, and accounts receivable, completely debt free at the closing.
Therefore, the buyer would be paying $10,000,000 and getting over that amount in hard asset value, real estate and working capital at the closing.
In other words, the seller is selling the business and real estate for less than the "break-up value" of the company, and is seeking nothing for the intrinsic value of a business that in 2014 generated $1,400,000 in free cash flow.
Value of the Business and Real Estate in 2005: The business owners bought the family out in 2005 for approximately 2/3rds of the current sales price. Since that year the owners have dramatically increased the business operations, technology and has invested an estimated $4,000,000-$5,000,000 into the plant operations and real estate (buildings etc.) Also, in 2014 the business was far more profitable than it was 10 years ago.
57,371 SF of total Operational/Manufacturing Space on 26 acres.
This Sale Includes:
1) 25.3 areas of land with 57,371 of operational and manufacturing plant space, including about $2,000,000 of building construction, and land improvements. Worth between $3,000,0000 - $3,500,000. (We will use $3,250,000 as a middle number.)
2) Approx. $4,000,000 of equipment (replacement value is about $8,000,000) All debts/liabilities on the balance sheet WILL be paid off at closing by the seller. (except for payables; about $720,000)
3) Approx. $1,500,000 - $1,700,000 in current or liquid assets such as accounts receivables. The buyer will also assume about $720,000 in payables; nets about $1,000,000. (This number will change.) Our Accounts Receivable are 99.8% collectable historically. This means of the $11,500,000 in sales last year, we allot for just $25,000 of a “default/bad debt” budget. This speaks volumes about the loyalty of our customers and how they regard the quality of our work.
4) Approx. $2,000,000 in inventory and concrete forms. This could easily be worthy well-over $3,000,000, but it is tough to value forms that have a 20-30 year+ remaining useful life.
Total Tangible value estimated at $10,250,000
The seller asserts that he has invested (or a new owner would have to spend) over $15,000,000 for all this equipment, vehicles and real estate today in order to get in place what we have today. And… if they were just starting out after this investment outlay, they would not have the customers, reputation, and following that we are offering here.
5) A 25 Year-Old solid business that has and will likely continue to cash flow $2,000,000 on $11,500,000/year, assuming no additional growth.
6) An incredible pipeline of about $8,000,000 of contracted work (backlog) that the new owner will step into.
7) 97+_ solid and long-standing NON-Union employees: The owners DO work full-time, but the operations today run "like a top" by great key managers and supervisors. This being the case the new owner does NOT need any specific concrete or manufacturing experience. However, the new owner should be high-energy and hands-on to grow the business.
8) From an operations and technology standpoint, we are “extremely advanced” For instance, we invested over $70,000 in the finest software on the market. This allows our estimators to create and send fast, accurate and comprehensive bids/estimates to our customers. This software will also allow a new owner to grow the company faster going forward since we have dramatically increased the bid volume capacity without additional estimators. Likewise, we just invested into an advanced phone system where each of our top key employees will be able to communicate instantly with one-another. Going forward, countless man hours be saved because we will now have quick communication with each other. Who knows the amount of additional production that can be achieved in a given shift starting this year.
Delayed Gratification over the Years to Reinvest Heavily into the Company: We have some of the most advanced plant technology in the industry. Instead of showing a big bottom line over the past 4-5 years and paying big taxes, the owner has taken the long-view and reinvested otherwise large profits back into the company to beef up assets for faster growth going forward. For instance, in February 2015, they bought a new boom truck (among many new assets) that will be delivered in early summer 2015. In summary, the new owner will be the direct beneficiary of substantially more profitable operations going forward from 2015 and beyond because of the owners’ delayed gratification and they have taken a more conservative approach to positioning the business for rapid growth and greater cash flow beginning this year.
9) Who knows the real additional value of providing flawless service to thousands of customers, and completed 10s of thousands of jobs, large and small. Please note that we have about 300 steady contracts with some of the same customers over-and-over, year-after-year. It took us years and even decades to “earn” the rights to serve these large companies and municipalities that pay us. They do NOT work with and trust just ANY company that comes along. To make the point even more clear, newcomers to the industry or some companies who have NOT proven themselves, have to bond there work, certainly for bigger jobs. Because we have a 40-year solid record of producing quality products that almost always exceed the spec and standards contracted, they almost NEVER have to bond work.
Further, other manufacturers have to meet specific quality specs (standards). Most-all companies have to have their end products tested for strength and durability, and overall quality. Our end-product is known in the industry as being so high in quality. We “police” ourselves closely and we always exceed spec. Who knows what this reputation is worth?
10) Very Little Work Is “Hard-Bid”: Our industry, like most, is competitive. In an effort to keep costs down, customers in our market often need to solicit bids from smaller, less established companies that we compete with. We are very proud of the fact that we have been doing this for so long and have such a solid and trustworthy relationship with our most customers, that they often do NOT shop our bids. I.e., this work is often “negotiated” and then completed by us. This an honor to us and an incredible value to the owner stepping in to the company. Again, it took 40 years of providing the finest products to “earn” the right to negotiate our own work and “write our own ticket” for many of the jobs we complete today.
Reality Check for the Buyer: This sales packet, like all offering memorandums, concentrates on “showcasing” the positive aspects of this sale, and all aspects of this sales piece is accurate. This is a great business, with fine plant equipment, loyal and capable employees, and great immediate growth potential etc. However, we do NOT want to suggest that just ANYONE can come in here and things will just rocket forward. The seller wants to be clear here that this is a big operation with a lot of moving parts. A new owner should have strong overall experience in business, management, finance, sales and marketing, etc. This business will not just grow itself. While having direct construction or manufacturing experience is not required per se, being a sharp person with high energy, passion and vision IS important, certainly to take advantage of all the growth that can take place over the next 5-10 years in our market. Licensing: the company or new owner does NOT need any special construction licensing.
Please Email today for the excellent and comprehensive sales packet, including 5 years of financials, tax returns, equipment lists and real estate appraisal. We also have a great a 45 minute long video detailing the 57,000 plant, real estate and full interview with the owner. Or please call 303-382 1900.
The Seller will Stay on and assist in the Full Transition to the New Owner: The seller is committed to stay on and provide for a smooth and orderly transfer of ownership and long-standing relationships with employees and customers.
The real estate and business will be sold together in one single transaction at the closing.
Legal Battles, Safety Record and Complaints: Per the seller, we have absolutely no legal battles, no shoddy work, no lawsuits, or other complaint problems.
In fact, we hold a BBB "A+" (ZERO COMPLAINTS) spanning the past 10 years.
We have an excellent safety history and workmans comp. insurance “Mod Rate” is .78. We have no other disclosure items here.
It must be clear here that we have an excellent team in the office and the 57,367 SF in buildings that run every part of the operation. We also have 3 great, loyal and long-standing plant supervisors that completely runs all day-to-day operations.
The buyer will take over about $1,500,000 in accounts receivable. As another statement of how solid our company is and how well our historical collection on receivables...we collect all but ".002%" or AR, or 99.99 or all receivables. This speaks volumes about what our customers think of us and the collectability of the AR by the new owner, post-closing.
We Serve Many Industries Including: See the actual sales packet for details.
Please Call of Email for Information: The broker is available at any time to meet to discuss your interest in this offering. Please Email today for the excellent and comprehensive sales packet, including 5 years of financials, tax returns, equipment lists and real estate appraisal. We also have a great a 45 minute long video detailing the 57,000 plant, real estate and full interview with the owner. Or please call 303-382-1900.
We Are Diversified: We have great diversity among hundreds and hundreds of long-standing customers and none of our customers represent more than 5% of our annual gross sales. Further, in an effort to minimize the risk of being hit with a given sector/industry falling into a recession or falling out of favor, we have always had the foresight to provide great products to the widest selection of industries.
Growth Potential Going Forward: There is no question that with the right person in place and smooth and orderly transfer, a new owner can grow the business quickly over the next 3-5 years. This business is very capital intensive and it has to be made clear here that over the past 5-10 years (especially) the current owners have business up an incredibly valuable arsenal of forms and other equipment that WILL be used for decades to come, and were invested in and expensed in prior years.
No Current or Previous Sales and Marketing Efforts Used: The company has NOT used any specific proactive sales and marketing efforts to grow the company. We have a website (below), however, over the years we have simply grown just through word-of-month and great reputation. “The work just come to us”, the seller states. In an effort to grow the business to the $20,000,0000-$30,000,000, a new owner will need to be more proactive and hire 2-3 sales/marketing and business development professionals. As stated above, the plant operations and real estate absolutely has the capacity (and many of the exiting forms) to handle up to $30,000,000 or more in sales.
Our Geographical Reach: Though we primarily do business in Colorado, Utah, New Mexico, Wyoming, Nebraska, and Kansas, we are equipped and have delivered products all over the nation.
What We Do: See the actual sales packet for details.
We Can Do Some of the Largest Jobs in the Industry: The units we create and the jobs we complete are some of the largest possible. For instance, we can cast and then move a 75 ton piece of concrete. The cranes needed to complete this move cost upward of $1,000,000. We have several cranes both fixed and mobile to be able to move these units around the plant, yard and then load on large trucks. As stated above we just bought a new boom truck to handle large pieces.
Water Industry in Colorado over the next 10-15 Years Will Thrive: Colorado is a very fast growing state and a “chain is as strong as its weakest link”. Our weakest link or limiting factor has been and is projected to continue to be water services, both water supply and drainage and sewer, etc. It is projected that billions will be spent all levels of government and the private sector with thrive to meet the demand. Historically, water-related products such as manhole and sewer units have played a smaller role in our gross sales.. Going forward a new owner could ramp up capacity and capitalize as municipalities rush to upgrade water pipe, underground systems, sewer/drainage, and other relation utilities. We have the name, reputation, and equipment to push further into this fast growing industry all over the Rocky Mountain Region and the West in general.
Denver and all of Colorado in general is projected to continue solid economic and construction growth going forward for the foreseeable future. Even during the economic downturn, Denver in general, held up very well and did NOT suffer the same hard fall/downturn that other states suffered.
See hyperlinks below of economic and construction projects going forward.
2015 Economic Forecast: http://www.metrodenver.org/research-reports/economic-forecasts/2015-economic-forecast/
Dodge Forecast: http://enr.construction.com/business_management/finance/2014/1106-dodge-forecasts-9-rise-in-construction-starts-in-2015.asp
FMI’s Construction Outlook: http://www.fminet.com/media/pdf/forecasts/Outlook_2014Q2_FMI.pdf
Wow!! After 25 years in business, BBB Accredited and “A+” rated. We have "0" complaints …
"Our Office Employees and Plant Workers are some of the best in the industry", the owner insists. As they say… “You are as good as your employees”. Today we have all procedures and workflow documented and everyone knows what to do and how best to do it. We have some of the most advanced manufacturing methods. Many of these methods have been "pioneered" or created from scratch since we had to learn as we went along over the years. Many procedures have been created by our own team and we actually consider many of them to be somewhat proprietary today.
Disclaimer: All information regarding businesses for sale is provided by the Seller and is NOT verified in any way by the Broker. You understand and agree that Company Broker Group, LLC or Paul Olsen is not responsible for the accuracy of any of the information and you agree to indemnify and hold Broker and its agents harmless from any claims or damages which may occur by reason of the inaccuracy or incompleteness of any information provided to you. The Broker makes no representation or warranty, express or implied, about the accuracy or completeness of any information provided to the Buyer through the broker.