Heavy ConstructionMichigan

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Large, Very Profitable, Fast-Growing Construction Services Business
Large, Very Profitable, Fast-Growing Construction Services Business


This company, located in the upper Midwest, is one of the most attractive businesses we have ever had the privilege of representing. The core businesses which generate nearly $3.0 million of normalized EBITDA provide transportation, construction, excavation and material handling services to multiple industries – with an emphasis on the mining industry. The second generation owners, having spent the last decade growing annual revenues from $750,000 to the current $20 million (+) level, look forward to helping new owners continue the very impressive growth and profitability history. The business maintains its corporate headquarters and operations in a 57,000 sf facility with an additional maintenance facility to support its fleet of equipment. The two impressive facilities allow the business to execute a very aggressive preventative maintenance program which keeps the company’s 300 (+) pieces of equipment operating efficiently during its 365-day business cycle. The company is not afraid of investing in machinery and equipment when presented with new business opportunities. The company has a total machinery and equipment investment exceeding $15 million including over $5.0 million invested in 2017 alone. The company has a successful history of negotiating long-term (typically 5-year), nicely profitable contracts for its transportation and construction services. While there is customer concentration in the business, the company’s strong growth trend continues broadening the customer base. Additionally, the large capital commitment required for the work and the typical long-term contracts provide significant barriers for competitors (of which there are few) to enter. The company has some 140 employees with an average age of only 44 years. The management team includes a general manager, five project managers, an HR manager, two full-time safety administrators, a purchasing manager and a CPA. The list price for a contemplated cash-free, debt-free stock sale is $13.25 million which includes (1) $1.0 million of working capital; (2) machinery and equipment with an estimated value in place of nearly $10 million; (3) $500,000 of inventory; and (4) and less than $2.0 million of goodwill which includes (a) 365 day operation run with military-like precision; (b) valuable large, non-bid multi-year customer contracts in place; c) a young, well-paid and loyal work force; (d) accurate financial data prepared by an experienced in house CPA and formally reviewed by an independent CPA firm; and of course, (e) annual EBITDA approaching $3.0 million. The company also has new, solid, significant in-house contracts which point to meaningful growth in 2018 and beyond. Finally, there are three additional points of buyer interest: (1) the sellers anticipate either carrying a meaningful seven figure seller note or retaining a minority interest post-close in the company; (2) the real estate can be purchased in a separate transaction for $2.76 million (debt free) in lieu of the $250,000 annual lease payments; and (3) a 12/17 strategic purchase of a tag-on business which has (a) has an unrelated customer base, (b) $3.0 million in annual revenues, and (c) an average annual pretax profit of $365,000, can be purchased in a separate transaction for $1.8 million (debt free). For more information on this outstanding niche business with favorable buyer options, please contact Mike Greengard at mgreengard@praxisbuinessbrokers.com.

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