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Heavy Equip Rental/Dealer, SP Equal to Equip Value, 1.09M Earnings

Glenwood Springs, CO (Garfield County)

Seller Financing Available
Heavy Equip Rental/Dealer, SP Equal to Equip Value, 1.09M Earnings
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Asking Price: $2,175,000

Cash Flow: $1,090,000

Gross Revenue: $4,700,000

EBITDA: $1,090,000

FF&E: $2,075,000

Inventory: $100,000

Real Estate: $2,200,000*

Established: 2003

*not included in asking price.

Heavy Equip Rental/Dealer, SP Equal to Equip Value, 1.09M Earnings

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Business Description

The trailing 12 months is showing sustained growth of both the revenues and bottom line showing 4.7M in revenues and 1.09M in earnings. The earnings makes this a ridiculously inexpensive business but he has to sell based on his age, health, increasing amount of time spent in Alaska, etc. The business is being offered for the current value of all of the assets. The equipment levels are currently at 2,174,588 which is broken up by office supplies/misc, shop supplies, small rental equipment, and large rental equipment. The company is being offered debt free with the Seller keeping his cash and collectable accounts receivables as either a stock or asset purchase. The building is separate and is being offered for 2.2M. He believes that it will appraise for more. He wants to sell both the business and the property. Plus, for absentee or partially absentee buyers, he believes that one of his employees would be a great manager meaning there might be a current employee capable of managing this business with or for a new owner.

Plus, I have a couple of banks that have looked at this and like it including a local banker that will consider loaning 75% of the current value of the assets.

The business has seen an increase in revenues and earnings over the last year because the owner has been focusing more on Rental Income from the Roaring Fork Valley. In addition, there is confidence that the natural gas industry is now in a real recovery in Western Colorado. Many of the companies felt they had to wait to make sure that ballot issue 112 failed which it did, before investing further in the area. Natural gas activity is starting to increase again in their area with the drilling of more than 150 new wells over the last 36 months. Plus, there is a lot of construction taking place that the new owner can continue to increase the rental revenues for. They are the closest large equipment rental/sales company to the 47 mile long roaring fork valley that extends from Glenwood Springs all the way to Aspen where there is a lot of construction taking place. Permits are running at an all-time highs in Garfield, Pitkin, and Aspen Counties and the average expense of new building is up significantly. Plus, the Jordan Cove pipeline should get a yes or no in November 2019. Even without this, this company is a great buy. That would just be a bonus.

This company has never had a lower sales price. There is no better time to buy this company than right now. He has a full time salesman doing a great job increasing this currently.

WESTERN CO MEDIUM/HEAVY EQUIPMENT COMPANY

The trailing 12 months had revenues of 4,725,390 with earnings of 1,091,964. 2018 had revenues of 4,488,143 with normally adjusted earnings of 952,709 before any add backs for Alaska.. 2017 had 3.45M in revenue with 798K in normally adjusted earnings.

The equipment levels are currently at 2,174,588 which is broken up by office supplies/misc, shop supplies, small rental equipment, and large rental equipment. He is offering the company for 2,175,000 currently. The buyer should be able to get either an SBA loan with 20% down or an asset(Equipment) backed loan with the bank proving 75% of appraised value. I have the contact info for bankers. He is motivated to sell because of a health issue and we have lowered the price again.

Many long-standing customers with big names along with hundreds of other long-term customers has resulted in a high percentage of recurring business. Plus, natural gas activity will can increase substantially with the approval of the Jordan Cove pipeline. This would provide a pipeline straight from western Colorado to Oregon to be able to export natural gas to Japan. They are the best positioned equipment company if this were to happen.

Equipment companies are typically “Fun” businesses to own.

The owner takes 22 weeks off a year. A new owner will be able to grow this company by being there and focusing on growth.

Location: Western CO along the I70 corridor

The seller seeks the current value of the assets at the closing plus 2.2M for the custom property. Recurring revenue always deserves a premium and this company has a high percentage of recurring revenues based on its location, customers, and reputation. 100% of the sales price will be covered by the current value of the assets. He prefers a stock sale but this can be either a stock or asset sale. It is priced as a stock sale with the owner keeping his cash and collectable AR while paying off all of the debt.

Brief Overview and Deal Points:

This is an equipment, truck and trailer sales, customization, and equipment rental business that sells/rents to construction companies, energy companies, ranchers, and developers. They can find, customize, rent, or sell anything a buyer would need at competitive pricing with good margins. Oil and Gas production dropped substantially in the late 2000’s and has still not recovered but new natural gas wells are still being drilled and the local economy is starting to improve again. The buyer will also step into a solid pipeline of recurring revenue because of their operating model and location. 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 also have exclusive and semi exclusive relationships with various vendors.

They are 16 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 which will have the price adjusted by adding the cash and net AR/AP if a buyer wants it. 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 Seller will sign a non-compete and offer a full transition. 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 company in their area and are an exclusive dealer for a lot of the equipment that they sell/rent. The company offers the 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 a customer ultimately buys.

They have 4 Main Revenue Areas:

1) Equipment Rental - They have over one hundred pieces of equipment that they track how often they are rented and keep them maintained accordingly. They sell/rent/customize trailers, Caterpillar Equipment, 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 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.

4) Customization – The oil industry in particular has special requirements that they are uniquely able to fulfill. 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 5 employees who are capable of running the business on their own and are all trustworthy, experienced, loyal, and will all stay after the transition."

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 growing again also.

Their location includes 11,200 Square feet of very functional space on 5.7 acres of property. 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. He prefers a sale of the property but will consider a lease for 132K per year triple net or purchased for 2.2M. The property recently passed a Phase 1 environmental test.

Growth and Expansion: The new owner should add an outside sales person. The new owner should be able to continue to increase rental revenues. They also need to reach out to the newer oil and gas companies again since many of them have been bought by other groups that they don’t currently have relationships with. The new owner can add new vendors and products eventually also. Advertising truck repair based on their location is something they have considered because they have the mechanics and bays already.

The owner is retirement age and wants to sell. This business needs new ownership with the drive to grow it again. It has very little competition and can provide services and equipment to a very large area. Both rentals and sales to ranchers, oil and gas, and construction can help this company to grow again in the current environment. Plus, that area tends to be about a year behind Denver which means that 2019 should be a fantastic year.

If you are NOT interested in this business for sale, but you refer someone to us who buys it and we collect the full commission, we will pay you a referral fee of 3,000 as part of the closing. Please send us anyone (or email this to anyone) who you think would be interested in this offering. Thank you.

Sincerely,

Jeff Chapman Eisnaugle
303-905-7607 Direct
303-284-7025 Main
720-524-6482 Fax
jeff@businessbrokercolorado.com

This is prepared by Business Broker Colorado, LLC with Company Broker Group, LLC being the managing broker with information provided by the Seller. It was not created by the seller and neither the Broker or the Seller are responsible for its accuracy. Buyers are responsible for their own due diligence. Neither the Broker or the Seller will indemnify or guarantee any forward looking statements or projections.
Different Brokerage relationships are available which include Seller agency, buyer agency, or transaction – brokerage.

Brokerage disclosure to Buyer or Tenant of Property. Definition of working relationships.

Seller's Agent: a seller's agent works solely on behalf of the seller to promote the interests of the seller with the utmost good faith, loyalty, and fidelity. The agent negotiates on behalf of and ask as an advocate for the seller. The seller's agent must disclose to potential buyers all adverse material facts actually known by the seller's agent about the business/property. A separate written listing agreement is required which sets forth the duties and obligations of the broker and the seller.

Buyer’s Agent: a buyer’s agent works solely on behalf of the buyer to promote the interests of the buyer with the utmost good faith, loyalty and fidelity. The agent negotiates on behalf of an accident advocate for the buyer. The buyer’s agent must disclose to all potential sellers all adverse material facts actually known by the buyer’s agent, including the buyer’s financial ability to perform the terms of the transaction. A separate written by a Buyer agreement is required which sets forth the duties and obligations of the broker and the buyer.

Transaction broker: the transaction broker assist the buyer or seller or both throughout a real estate transaction by performing terms of any written or oral agreement, fully informing the parties, presenting all offers and assisting parties with any contracts, including the closing of the transaction, without being an agent or advocate for any of the parties. A transaction-broker must use reasonable skill and care and the performance of any oral or written agreement, and must make the same disclosures as agents about all adverse material facts actually known by the transaction – broker concerning the property or a buyer's financial ability to perform the terms of a transaction and whether the buyer intends to occupy the property. No written agreement is required.

Business Broker Colorado, LLC and Company Broker Group, LLC, and Jeff Chapman Eisnaugle will be operating solely as a “Seller Agent” in all transactions.

Detailed Information

Location:
Glenwood Springs, CO
Inventory:
Included in asking price
Real Estate:
Owned
Not included in asking price
Building SF:
11,200
Employees:
5
Furniture, Fixtures, & Equipment (FF&E):
Included in asking price
Facilities:
Their location includes 11,200 Square feet of very functional space on 5.7 acres of property. 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. He prefers a sale of the property but will consider a lease for 132K per year triple net or purchased for 2.2M. The property recently passed a Phase 1 environmental test.
Competition:
They are the largest independent sales and rental company in their area and are an exclusive dealer for a lot of the equipment that they sell/rent. The company offers the 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 a customer ultimately buys.
Growth & Expansion:
Growth and Expansion: The new owner should add an outside sales person. The new owner should be able to continue to increase rental revenues. They also need to reach out to the newer oil and gas companies again since many of them have been bought by other groups that they don’t currently have relationships with. The new owner can add new vendors and products eventually also. Advertising truck repair based on their location is something they have considered because they have the mechanics and bays already.
Financing:
Up to 200K
Support & Training:
The Seller will sign a non-compete and offer a full transition. 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
Reason for Selling:
The owner wants to retire
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Jeff Chapman Eisnaugle

Business Listed By:
Jeff Chapman Eisnaugle

Business Broker Colorado

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