Seller Financing Available
IL Const Co. $25M in Rev, $3.5M Assets, 68 Yrs old, will do 40M 2015
IL Steel Frame Const, 32MM Rev, 3.5M Asset, Could do 40MM in 2015
Revenues were $25,155,839, up 41% for Fiscal 2015, will do $40MM in Revenues this Year. Their adjusted EBITDA was up 59% at $918,737 for Fiscal 2015 also.
They currently have the largest amount of already signed contracted work for this year in their history(by a lot) with $31MM signed already. They have another contract expected to be signed soon for $14MM with the work starting in April of 2015. These contracts will all benefit a new owner. In addition, they always bring in between $12MM and $15MM during the year. Approximately $6MM will carry into next year so they currently estimate that this Fiscal Year will be at least $40MM. They are set to have both record revenues and profits this year by a large margin.
Buyer gets $3,500,000 in current value hard assets debt free including $2,040,000 in already appraised real estate! Real estate is usually owned separately and makes the sales price under $3,000,000 after subtracting the value of the real estate as it relates to just the earnings. $3,000,000 sales price is very low for this business with the non-real estate assets of almost $1,500,000, growth rate, amount of recurring revenue, Butler exclusivity for 9 counties, reputation/history, employee loyalty, and signed contracts for this year.
Over 50% Recurring customer business including many fortune 500 corporations. They have done work for many of them for two or three generations.
80% Design/Build with 1 Architect and 1 Graduate Architect on Staff
Total Sales Price including Real Estate is $5,000,000 With $3,000,000 down at closing for a Stock or Asset sale. This is a C corporation and the sales price is equivalent to a $3,000,000 sales price because of the $2,040,000 in real estate that is included because it is owned by the company. They could make around $2,000,000 in adjusted EBITDA for the current Fiscal Year ending February 28, 2016. A buyer willing to take the time to look over their signed work for this year and compare it to years past will conclude that this is the best time ever to buy this company. In fact, with an estimated $40,000,000 plus in revenues and higher margins expected this year, the company will be significantly more valuable than the sales price by this time next year.
There are many very special features to this company including the fact that they have 9 counties as the exclusive Butler Builder in IL(Butler is the largest pre-engineered building designer in the world), have never lost a building during construction, gets over 50% of their business through repeat customers, rarely needs bonding for jobs based on their reputation and currently does not have any bonding required on any job they are working on nor did they have any last year, and the employees tend to spend their whole careers with this company and will stay.
Location: Northern IL ______________________________________________________________
Terms: 5,000,000 with 3,000,000 down at closing and the seller will carry 2,000,000 over 5 years paid from the income of the business. They are keeping their Cash(except deposits and retainage), Collectable Account Receivables, and Cash Value Life Insurance that is on the Balance Sheet and transfer the business debt free. The business is priced as if they are making around $1MM adjusted EBITDA and this year they will probably double that. Once they secure the $14MM contract expected by April 1st 2015, they will ask for a bonus tied to overall revenues over $30,000,000 or an earn out on that project to fairly split the extra earnings that will come from this signed work in favor of the new buyer. It will be a win/win. If it is a stock sale and the buyer wants any portion or all of their Cash and “net” Account Receivables then they will adjust the price up by that value. You may also call Jeff Chapman at 303-905-7607 or email me at firstname.lastname@example.org.
Brief Overview and Selling Deal Points:
The buyer gets approximately $3,500,000 in assets Debt Free. The buyer will be allowed to leverage the real estate and assets to help finance the purchase.
Sale Includes: $663,672 in heavy equipment, trucks, specialized tools, etc. at quick sale value. $550,000 in current inventory and another $500,000 in useful inventory that is "off the books". They counted all of the inventory in early June 2011and got rid of several dump truck loads of old inventory. The company owns 5.74 acres of fully-functional land with 3 main buildings totaling about 31,000 square feet. The land and building were appraised in June of 2011 for $1,520,000 and are worth at least $1,700,000 now. They also own two properties appraised for $340,000 that they will build to suit on(Specs).
They have the oldest exclusive territory with the nation’s #1 manufacturer of pre-engineered steel buildings in the world. More specifically, the company has exclusive rights to 9 counties and have constructed over 200 pre-engineered metal buildings in just one zip code alone! They were named “Builder of the Year” by Butler several times, and their firm was awarded the valuable title of “Career Builder ship,” which is only offered to continuous elite performers.
Since 1946 we have been the premier builder in our market by constructing hundreds of large-scale commercial buildings. In fact, they have constructed millions of square feet of commercial space in virtually every aspect of commercial construction. This includes; libraries, hospitals, schools, city halls, medical centers, retail space, large-scale malls, industrial parks, office buildings, and manufacturing facilities. “We are always proud to say that over 50% of our customers are repeat customers. We have hundreds of long-standing customers that know us and trust us. Many of these companies are some of the largest companies in the world. This is our largest and most valuable asset being sold in this transaction” - the future value of all of the work that the new owner will garner form these loyal customers.
The buyer will immediately step into a large amount of work-in-progress and a record amount of signed contracts as of March 2015, much of which is from long-standing customers. More specifically, they have a record amount of signed contracts and work-in-progress currently with up to another $15,000,000 expected by the end of March which is a record for this time of year indicating a great chance to have total revenues of at least $40MM for this fiscal year. The margins and profits on this contracted work is better than the margins they have enjoyed in the past. The new owner will have a solid pipeline of very profitably work. Also important is that they work in a seasonal climate which means that they lay slab in the spring, spend money on materials in the early summer, and then the invoicing starts to exceed the payables. In other words, this is the best time of year to buy this business.
The company has benefited by their location by seeing a large increase in the size of the jobs that have migrated to them over the years because they are in a strong future growth area which you will learn more about from the sales package detailing their location. The seller says “The work just comes to us without any outbound or pro-active sales/marketing efforts. We’re a design/build general contractor with in-house architectural services; which makes us very unique in our trade area, and gives us a huge advantage over our competitors.” They have just one competitor to speak of in their entire market that doesn’t have their reputation or the type and length of relationships that they have with some very well know customers or the ability to build Butler buildings in their 9 counties. Therefore, they can concentrate on larger and more profitable work.
The sellers insists that they have the finest employee-base in the country. "We have 18 employees that have an average tenure of over 15 years with us. Loyal employees who spend their entire careers with us. We currently have 3 second generation (non-owner) employees.” This speaks volumes about their loyalty and commitment to the company. The new owner will not need any specific construction experience because they have the systems in place to estimate work and run jobs with the employees they have right now. The company has the biggest name and the finest reputation in their region. As stated, the seller will agree to full Reps and Warranties. “We have a great record for safety (OSHA), satisfied clients, no legal battles, and a .92 MOD rate,” This low MOD rate saves money on insurance premiums and demonstrates the quality of the employees.
Bonding Big Jobs: They are trusted with big jobs because of their size, history of professionalism, and by getting the job done right and on time. Bonding is more difficult today than ever for their competitors. Less-established competitors have to bond many jobs that they don’t have to. As of mid-March 2015, they have no jobs that require bonding.
The company has become a leading provider of buildings to the Windmill industry (wind farms). They have designed and built 21 tornado proof operations and maintenance buildings (for wind farms) and currently have 10 additional active bids to get new jobs. This is giving them national exposure with a very good profit margin. Ask for the sales packet for more details.
One way to immediately grow the business is to hire 1-2 new estimators. Currently their sales people are spending far too much time estimating instead of selling. A new owner can come in and increase sales immediately by freeing up the sales staff’s time so they can call on the existing list of hundreds of long-standing customers. It is important to understand at this point that they have not historically done any “pro-active” marketing efforts. Most companies that gross $20MM to $40MM have an aggressive team of pro-active out-bound sales and marketing efforts. All of their work comes from in-bound call-ins and unsolicited bid inquires at almost zero cost to them.
Historically, they have operated in a 70 mile radius of the office. This is the way the they have run their operations over their entire history so their workers can come back to their families every day. Although, they have loosened up on this in recent years, they still have a strong bias toward work that is close to their location. The new owner can further extend the geographical limits that they have limited themselves to with the support of the employees whom they have recently found don’t mind. If the new increased geographical radius (market) is closer to 150 miles or more, this would effectively almost triple the market size and amount of work that can be pursued.
The sellers are committed to all stay for various periods of time. This will give a new owner plenty of time to replace them and ensure a smooth transition. They expect a smooth and orderly transfer of employees, customers, and vendor/sub-contractor relationships. The employees and owners are all hard working responsible and capable people that all get along and always have. The sellers are so confident in the short and long term success of the business going forward, that they will carry 40% of the sales price. As stated above, this is a 68 year old company. The sellers love their business, their employees, and everything about it. It has been their life and passion for many years and they want to see its legacy thrive for many years to come. In short, as stated above, they are motivated to participate in the growth and continued success of the business. The new owner should increase both revenues and net income steadily in the future based on their reputation, by
pursuing additional markets, and by just enjoying the predictable growth that their area will have as Chicago grows to the west in the future.