2019 CF Over $8M on $40M in Sales, Includes $5M in Aseets Debt Free.

Denver, CO (Jefferson County)

Seller Financing Available
2019 CF Over $8M on $40M in Sales, Includes $5M in Aseets Debt Free.
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Asking Price: $9,500,000

Cash Flow: $5,000,000

Gross Revenue: $40,000,000

EBITDA: $5,000,000

FF&E: $5,000,000

Inventory: $100,000

Established: 1991

*not included in asking price.

2019 CF Over $8M on $40M in Sales, Includes $5M in Aseets Debt Free.

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Business Description

$5M Down at Closing Gets $5M in Assets Debt Free, Largest Comm. Contractor. Prop

New Business for Sale in Colorado: 28 Yr. Old Niche Construction Company, Cash flows of $8M - $11M on over $40M in sales (2019). Already did $6.7M in first 6 months of year. See why this company is now a license to “print money” going forward. Very unique business model.

The buyer puts down $5M (and pays another $4.5M over the next 5 years) and gets over $5M in assets completely debt free. Not bad for a business that will cash flow over $5M this year on $40M in sales. The business already has approximately 3,000,000 to 4,000,000 of net working capital (AR/cash and retainage over payables) that the buyer will step into. This is in addition to well-over $2M in heavy equipment and 20 late-model vehicles/trucks. The sale includes absolutely everything needed to cash-flow over $5M for the next 3-4 years without buying any new equipment.

This is a new listing, listed on July 12, 2019.

Let us know if you want the actual sales packet which includes the link in the data room with all company financial information and a comprehensive video interview detailing every aspect of the business and full site walk-through. The video interview is critical to watch to fully understand this offering. In the data room is last 5 years of income statements, balance sheets, tax returns, equipment list etc. Everything required for due diligence.

Cash Flow –

2019 Cash Flow (projected at) $8M - $11M on sales of over $40M
(First 6 months of 2019 was $6,727,652 on sales of $17,704,751)

2018 was Cash Flow was $5,672,624 on sales of $24,634,209

2017 Cash Flow was $4,332,998 on sales of $17,896,751

2016 Cash Flow was $2,785,808 on sales of $14,531,533

Sales Price and Deal Structure: The sales price is 9,500,000, with $5,000,000 of the sales price paid at closing. The seller will carry up to $4,000,000 paid over 4-5 years from a qualified buyer. Obviously, the seller is confident in the future prospects of the business since he is carrying 40% of the sales price.

Deal Structure: Put Down $5M at closing and get about $4.8M in assets debt free. At closing, the buyer takes over the balance sheet debt free other than payables (AP). The assets and liabilities on the BS change every day of course, but based on a recent calculation the buyer would step into just under $5M in NET assets. This includes over $2.1M in equipment and about $2.8M in net working capital/cash and accounts receivables (AR). The buyer MUST HAVE no less than $1.5M of their OWN funds to put down on this deal for the SBA to do the deal. (Really about $1.2M, but we want a margin.)

The pump is primed with more contracted work on the books than ever in our history, over $28M in contracted work, a great hand-off and solid pipeline of high-margin work. The seller is fully confident that the business will continue to cash flow at least 4M/yr. on $35M/yr. (these are floor numbers) in sales for the next 5-10 years as long as the buyer follows this incredible new business model.

Who We Are: We are a 28-year-old Commercial building contractor located in the Colorado Front Range that has built over 400 large commercial buildings in 1 county alone. We are so well established that unlike our competitors, we no longer have to “bid” most jobs; the work is just handed to us, we give them a price and in almost all cases we get the contract. Only 10 or 15 years ago we didn’t have the name and established reputation that we have today for solid work that exceeds expectations and is completed before schedule. Today, we have 50 of the strongest workers in the industry and the finest equipment to do any type of project in our established niche market. The business is owned by 2 men but the new owner would take over the hat of the main owner, and the other owner’s position would be absorbed with field supervisors. Today, the business is run almost entirely by 10 key employees who love their jobs and are very well paid.

What we do and build: We provide a wide range of construction contractor services including: design-build construction, general contracting, land development, construction consulting, commercial construction, retail construction, prefabricated steel buildings, tenant improvements, commercial additions, zoning assistance, traffic studies, and financial assistance. Our portfolio of projects include: medical buildings, office projects, multifamily housing/tenant projects, retail and strip malls, hospital and veterinarian projects, warehouse construction, etc.

Our Special Model is Now a Machine: as stated above, over the past 5-7 years we have developed a “special” model for commercial construction jobs that allows us to get jobs without having to bid against competitors and thus our margins are the highest in the industry. Today, the business is a “machine” that is finely tuned to consistently generate $40M-$50M with gross profits of 25% which cash flows at least 10%. Everything is in place for the first time in 55 years, we have over $2M in new equipment, the perfect people in office and field to run the work, but most importantly, we have the reputation to have our phone ringing off the hook with inbound requests to pursue work.

The company is in the finest position ever for a handoff to the new owner. 2019 was up substantially compared to 2018 and the new owner will step into $28M of newly-contracted work that was very well-bid with highest margins ever. This includes 16 ground-up buildings on raw land that are contracted and ready-to-go for the new owner to take over. The new owner will also step into between 10-15 TI’s (tenant improvement projects) and this does not include the 15 TI projects in play right now. These new contracts range between $200K-$1M and only have about 2% of the estimated $300M in annual TI work in our region. Lastly, many of the contracts and projects we have signed span 3-5 years out and beyond because many of our customers spread projects out in phases, and the new owner will naturally get that work since the relationship has been cemented. Therefore, it’s likely that the new owner will benefit from between $40M-$60M of work that will be either contracted before the closing or be a lay-up to get because we already have the customer locked down. It is said, that your company is as good as its employees and we have 50 of the best in the business. It took years to find and train the best office and field workers, and today we have the most trained and experienced workers out there, the seller insists.

Our 4-Step “Special Sauce” Process: This is a summary of what you’re about to read in this sales packet. The company has been around for 28 years and has always steadily cash -flowed between $1.5M and $3M. However, the seller is 100% confident that the business will cash flow well-over $4 million in 2019 on sales of $40M and for a variety of reasons, will remain at that level for many years to come. This is because of the new and sophisticated business model they spent years building which is now fully in place. This is not just any commercial building contractor. Companies in our industry operate on 5%-7% net profits, however, we now steadily cash flow well-over 10% and probably closer to 15% on sales of no less than $40M-$50M/yr. because we built a vertically integrated process that no other company that we know of has come close to.

We control the entire process for a client from scoping the project, design/planning, presentation for the bank to justify and assist the client in obtaining the loan and then complete the ground-up work. We can control the entire process which of course allows us to save our client a great deal of money because we are a one-stop shop. We do it all from A-to-Z, whereas other construction companies are only a part of the process. Because of our economies of scaled approach, we are able to get almost 3X’s the profits that other companies get. In fact, we win over 85% of the projects that we spec out. Our industry can be highly competitive and virtually every competitor has to bid for work to earn it. Not us. All of our work is negotiated, in fact we haven’t had to bid/compete for a job in almost 10 years.
YOU MUST SEE THE DETAILED VIDEO in the link above detailing this critical point.
In summary, we are high service, high quality, high accountability with high margin/profits. The owner is quick to brag that, “if you’re great at the first 3 of these, then you can command the 4th, and they will pay it all day long!” We live this every day now.

This is the perfect time to transition the business so the new owner has a solid pipeline of work, and the seller is committed to keeping the pipeline completely packed until the new owner can take over comfortably. Having said all of this, let it be known that we have ONLY 1%-2% of the tenant improvement market, so there is a great deal of market share to get hold of now that the model is in place. However, we are proud to say that we have 40%-50% of the “ground-up commercial construction” market in our area – we dominate here, but this needs to be leveraged further.

The seller stated that he has been working the business model like a Rubik’s cube over the last 5 to 10 years, just kept working it over and over and improving it in every area. Today, all sides of the Rubik’s cube line up perfectly and the business runs like a top. Everything is in place for the new owner to take it to $60M-$70M/yr. in sales with even greater margins going forward. Again, we have everything in place, 50 of the best office and field workers in the industry, 20 late-model vehicles, an enormous amount of new equipment in the field, (see the asset list in the data room), and the most efficient job-costing and project tracking systems that streamline everything with state-of-the-art efficiency. The business is nothing like it was only 4 years ago - It’s been completely revolutionized; you have to see the video to believe it.

Strongest Reputation and Greatest Number of Long-Standing Large Customer Base: We have the strongest reputation for comprehensive commercial construction than anybody in Colorado. Only 5-10 years ago we weren’t quite there, the jury was still out on us and our developing business model. We didn’t yet have the strong and long-standing relationships that exist today with suppliers, and the diversity of customers we have today; please look at our comprehensive customer list to see some of the largest projects and our largest customers in the region. Today the reputation and relationships are completely fortified and it is through these customers, who build year-after-year with us who would logically go with no one else because they know what we are capable of. They know we are a 1-stop shop. If they go with another company, they need to hire someone to do the architectural plans/design, then take all that information and find someone to package it and bring it to the bank and help get the financing and show how the project makes economic sense. Then they have to take all that and find a general contractor, and someone to carry it to the end. They love that when working with us, we can execute the entire process flawlessly from a cocktail napkin in a restaurant all the way to a certificate of occupancy for the project. Customers hate the run-around and finger pointing from one level to the next and one hand not talking to the other, which can often happen when working with 3-5 different companies to open a commercial building. With us, there is no confusion or finger-pointing, the buck stops here, there’s no run-around, and they love our accountability and service for this. Another positive aspect is that one company means 1 bill, and one person to yell at if things don’t go properly. As stated, we provide high service, high quality, high accountability, and high margin/profits.
It’s not enough to just have customers like and trust you, it’s critical to have a strong reputation and good working relationships with local and regional banks who fund these deals. A chain is as strong is its weakest link, and if the weak link is that the customer or the builder can’t show the bank that the project makes economic sense, the bank will not green-light the loan. So, there is an enormous competence that needs to exist to be able to present a project to the bank in such a way that you get loan-approval, and of course, we are the direct beneficiary of that loan approval.
Our customers know that our involvement with the financial analysis will dramatically increase the chances that the bank will do the deal and we are the best in the industry to get the bank behind the deal because they know we can deliver within budget. Very few companies are involved in this part of the process and the bank has to know that we are competent, trustworthy and that our numbers not only make sense but are realistic. We are in a big city, yet it is a “small town” in the banking world; we have worked with the same banks for many years and have executed dozens and dozens of deals with each bank. They know who we are and that goes a long way toward their decision to “do the deal” when it’s sometimes a fence-sitting decision for the underwriter. In the end our customers are fine to pay these great margins to have our financial involvement in improving the chance of getting the loan.
Goggle Reviews 4.9 out of 5 stars for 64 reviews. That is hard to obtain in an industry where not everyone is always happy. All 5 Stars!!

Over $2,000,000 in New Equipment: The seller spent well-over $3,000,000 on new equipment in the past few years. It is currently worth about 2.1 million.

Recent Sales and Business Development Efforts: Over the years we’ve made almost no proactive sales and marketing efforts since the work always just came to us. We have done a good job of cherry-picking the most profitable work and passed on the type of work and customers that didn’t make sense to us. For instance, medical centers, warehousing, and strip malls are great profits, but we always shied-away from church construction for example, because the profits weren’t there. It took a long time, but we think we are in a sweet spot with the best customers, in diverse industries, and we now really enjoy the people we work for.

It’s only in the last 2 years that we hired our first business development person to go out there and get the kind of work that best suits our model. In fact, he brought in $10M of new work in the last 12 months alone. So, between his proactive efforts to bring in new highly-profitable work as well as our long-standing steady customer base who use us year after year who we have a predictable rhythm with, we feel that going forward $40M in gross sales will be the new “floor”. Over the years we could have grown at a much faster rate if we had leveraged the company, but we weren’t willing to do that. Consequently, we left a lot of opportunity on the table by passing on work that would have otherwise gotten us to $40M/yr. 3-4 years ago.

The Owner is Selling the Real Estate: The operation sits on over 3 acres of very functional space, with a 20,000 SF new building, (12,000 SF for admin and office, and 8,000 SF of warehouse/shop/large-bay garages. The location of the office operation and yard are for sale for another 3,100,000, but the property recently appraised for $3,345,000. Also, the seller will lease the property with an option to buy for $13,500/mo. (NNN) for 10 years minimum with an annual 2% increase.

More working capital would help profits: The seller has gone on record to say that the limitation of growing the business over the last 5 years has been the lack of working capital, and the fact that we did not want to use debt for growth, organic growth only. A chain is strong as its weakest link, and our weak link has been not having enough money in the bank to put down and do more jobs. More specifically, if we had another $750,000-$1,000,000 on the balance sheet (or used a line of credit) over the last 3-5 years we easily could’ve made another 800,000/yr. to the bottom line. We never wanted to use leverage to grow the company, we could’ve increased y net income by about 50%. The seller is very clear that if a new owner came in and put $750,000 into the business (or used a line), the business would absolutely be able to take on more work and substantially increase profits. As mentioned above, the business already has approximately 3,000,000 to 4,000,000 of net working capital (AR/cash and retainage over payables) that the seller is leaving behind, so there already is a tremendous amount of equity in the business to maintain $40 million a year in sales, but to grow it going forward, another $750,000 would certainly help.
Reason for Sale and Smooth Transition: This business is run by 50 great and long-standing employees; the operations are run by the owner and 10 other key employees. It needs to be clear that the company was NOT well-positioned for sale in the recent past. In fact, it was only 3-4 years ago that the owner was still very important to the day-to-day operations. However, over the last 3 years 10 key employees have stepped up and now run virtually the entire company. Even further, to facilitate a smooth and orderly transfer of all responsibilities and relationships, the owner will stay on for whatever length of time it takes to ensure that the new owner is completely acclimated and nothing gets dropped in the transition.

Remember, the owner has a clear interest in an optimal transition to the new owner because he is carrying a good portion of the sales price to be paid over 5 years, as well as a half-century-old legacy that he wants to ensure thrives for many years to come. The seller is completely committed to be available even for a year or longer to the new owner for some of the critical or sticky situations where you need a “little gray hair in the room” and he puts it, to secure some of those bigger deals that the new owner may not be able to bring down because they simply haven’t been around that long or they may be a little green to the industry. The seller would be fine and even excited to do this for many years to come since he isn’t moving anywhere and would love to help where he can. The deal has to “work for everybody”, he says.

No Customer Concentration or Seasonality Swings in Sales: We have no customer concentration and there is not more than 10% of our sales from any given customer and certainly not the same customer year after year. Having great customer diversity in a variety of industries is important to spread your risk in the event one area of the market slows down. Please see the accounts receivable aging report to confirm this. Also, there is almost no seasonality to our sales and production and therefore we earn fairly steady profits throughout the year. A lot of people may not know this but Colorado enjoys more than 310 days of sunshine a year on average, the sunniest city in the country, and although we do have some cold winter days, historically there’s less than 15 days a year that we can’t work because of inclement weather which again is important for a steady cash flow and to keep your salaried employees working throughout the year unlike other areas of the country where it can be boom and bust because of seasonality swings.

Growth Projections for the Region: Economic growth projections for the next 5 to 10 years for the Colorado Springs area is nothing short of explosive. If you don’t live in Colorado you would not know that Denver, Fort Collins, Colorado Springs and everything in between has been nothing short of the fastest growing region in the country for the last 10 years in particular. Denver and Colorado Springs, in particular, have been off the chart for construction and population growth. It is beyond the scope of the sales package to go into detail, but we have an excellent diverse economy, wonderful weather, higher education levels, and just a wonderful place to live overall, and of course, the approval of recreational and medical marijuana pioneering certainly gave the region of shot in the arm. It is no secret that we're in the 10th year of an economic expansion nationally, and although nothing good lasts forever, when Things to slow down nationally, Denver in Colorado Springs as well as the entire front range or expected to continue to buck the trend and grow for many reasons… It’s also clear that city and county municipalities are very friendly to construction and there is virtually unlimited land in which to sprawl in both of these major metropolitan areas.

Explosive Growth in our Immediate Market Area. COLORADO SPRINGS, Colo. — El Paso County continues to lead the state in population growth, according to newly-released estimates from the United States Census Bureau. El Paso County had the largest year-over-year population increase in 2018 with a net gain of 13,056 people, the State Demography Office announced. That brought the state’s second-biggest county to a total estimated population of 713,856. Denver County came in second with an increase of 11,053 people in 2018 for a total estimated population of 716,492. Site. https://www.thedenverchannel.com/news/our-colorado/el-paso-county-led-colorado-in-population-growth-again-in-2018

El Paso County, home to Colorado Springs, will gain 410,163 residents, a 58.6 percent increase that pushes its share of the state population from 12.8 percent to 13.1 percent by 2050. Site. https://www.denverpost.com/2017/11/07/colorado-population-growth-fastest-regions/

There Are No Negative Disclosable Items: The company is in excellent standing. There are “no ghosts in this closet”! As stated above, after completing over 10,000 jobs we have NOT had 1 complaint for unsatisfactory work that we did not immediately fix on our watch and our dime, we have never failed on a job. We have always had an excellent safety record with virtually no injuries for at least the past 7-10 years. In fact, we have a workmen’s comp modifier rate of “.81”, which means we enjoy a 20% discount on our insurance which a new owner will benefit from for many years to come. We take worker safety very seriously and the seller is 100% committed to sign for Reps and Warranties that provides for solid protection of the buyer in these areas.
Licenses and Permits: Initially, the new owner needs no specific licensing or permits in Colorado, the company has all licenses needed to operate going forward. However, within the first 1-2 years, the new owner would need to transition the licenses to themselves, but the seller will keep his license active for the company until this transition is complete.

Please email if you have any specific question(s), path forward, or have potential interest in a phone call or face-to-face meeting with the owner/seller.

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Denver, CO
Included in asking price
Furniture, Fixtures, & Equipment (FF&E):
Included in asking price
Seller will carry $4M
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Paul Olsen

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Paul Olsen

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