Asbestos Removal with 1.6MM in Upcoming Projects
With 20 asbestos specialists in place, only approximately 85% is completed for commercial or industrial buildings, while 15% of the work is done on residential structures. Upcoming work will include the renovations of major hospitals and universities in the Omaha area, accounting for $15M in potential future income for a new owner.
In Omaha since the late 80s, this asbestos removal and fireproofing company has been a consistent provider of services for builders and remodelers. This company has a prominent and trusted name in the Omaha area and can benefit from family name recognition. Servicing industrial, commercial and multi-family residential customers, this company can also provide fiberglass insulation, mold remediation and lead paint remediation.
Each of this company’s supervisors is certified with a state-issued asbestos card. The 20 asbestos specialists average a combined 1,100 man hours per week.
Currently located in a 13,000-sq. ft. warehouse, this company can operate within a 4,000 sq. ft. space. There is potential for a reduction of costs by downsizing warehouse space. Additional growth opportunities include expanding the team and services including lead remediation, insulation and fireproofing.
- Year Established: 1989
- Location: Omaha, Nebraska
- Service Area: Nebraska and Iowa: 90% of work is within 1 hour of Omaha
- Clients: 85% Commercial/Industrial, 15% Residential
- Services: Asbestos abatement and removal, fireproofing, fiberglass insulation, mold remediation, lead remediation
- Building: 14,500 total square feet: 13,000 square feet warehouse / 1,500 square feet office space
- Reason for Selling: Retirement
- Employees: Office Support: 3.5 employees, 20 abatement specialists
- Seller Training Period: 1-3 Years, if desired
- Growth Opportunities: Expand Team, Expand Lead Remediation Services, Expand Insulation Services, Expand Fireproofing Services
- Current Owner’s Responsibilities: Financial and employee oversight; hiring
- List Price: $1,225,000
- Gross Sales:
- 2018: 3,044,345 (annualized)
- 2017: $3,324,817
- Cash Flow:
- 2018: $526,044 (annualized)
- 2017: $348,646
- 2016: $313,979
- Assets Included in Purchase
- Vehicles: $539,737
- 8 pickups, 7 trailers
- Equipment: $573,872
- Intangible Assets: Established name for over 50 years, close relationships with companies for referrals
- Inventory: $81,119
- Vehicles: $539,737
- Upcoming Work: $8-10M
*amounts may vary
Recasted Cashflow Analysis
|Description of Financial Statement||P&L Statement|
|P&L Statement||Tax Return||Notes|
|Net Income Shown on Financial Statement||$167,362||$215,800||$114,192|
|Compensation to Owner||$33,400||$84,475||$130,830|
|11% Tax on total W2 Salaries||$2,664||$9,292||$14,391|
|Meals & Entertainment||$1,666||$500||$500||Personal Expense|
|Subscriptions||$2,846||$5,078||$4,227||Creighton & NE football tickets|
|Non-Business Telephone||$991||$2,700||$2,700||Personal Expense|
|Insurance Premiums for Owners: Life||$188||$1,287||$429||Personal Expense|
|Professional Fee||$26,989||$44,000||$0||One-time legal expense|
|Rent Adjustment||$-1,000||$2,400||$2,400||Onward-going rent $4,000/month|
|Owner fee||$-50,000||$-50,000||$0||For staying on after sale|
|Seller's Cash Flow = Total Addbacks + Net Income||$193,123||$348,646||$283,979|
|Profit Margin||17.28 %||10.49 %||6.35 %|
- 17% profit margin
- $50,000 negative addback for owner to stay after sale
- Large industrial buildings
- K-12 Schools
Specific information regarding clients is available upon the receipt of a signed Non-Disclosure Agreement.
- Asbestos Abatement
- Spray-Applied Fireproofing
- Mold Remediation
- Lead Paint Remediation
A majority of this company’s work is in the asbestos abatement and fireproofing categories. Mold and lead paint combined make up less than 10% of revenue
- 20 FT Abatement Specialists, 10 of whom have been with the company for 20 years or longer
- 1 FT Payroll Specialist
- 1 PT Accounts Payable and Accounts Receivable Associate
- 2 Office Support Staff
- Expand Team
- Expand Lead Remediation Services
- Expand Insulation Services
- Expand Fireproofing Services
The Firm Business Brokerage used a Cash Flow Valuation methodology to determine the Purchase Price of the business.
The formula used is as follows:
Cash Flow x Prescribed Multiple = Fair Market Value
Cash Flow is the sum of business net income plus any owner perks and any non-onward going expenses.
A multiple is prescribed by a 20 question, 100-point parameter ranking system that is used to analyze the current business health. Each question is based on a scale from 1 to 5: 1 being low, 2 below average, 3 average, 4 above average, 5 high. The average of the responses sum is the business’ prescribed multiple.
For this business, the 2017 Cash Flow was used with a prescribed multiple of 3.52. With this information, the computation is as follows:
$348,646 x 3.52 = $1,227,234
The Fair Market Value found above positions the business List Price at $1,225,000.
Purchase Price: $1,225,000
10% Buyer Down Payment: $122,500
15% Seller Financing: $183,750
75% Bank Loan: $918,750
Seller Financing 6-year term at a rate of 4% equals a monthly loan payment of $2,875.
Bank Loan 8-year term at a rate of 6% equals a monthly loan payment of $12,074.
After business expenses and loan payments, a buyer with a 10% down payment of $122,500 would retain a profit of $169,264.
A lender is required to have a minimum 1.5 coverage ratio for any business loans extended. At a proposed Purchase Price of $1,225,000 with the terms listed above, the coverage ratio is 1.94.
Please note that the decision of whether to extend a loan on any sale belongs to the bank, and this document does not guarantee specific terms or verify that financing is available.
Offer Price: $
% Buyer Cash Down at Closing: $
% Seller Carry Back via Promissory Note: $
year term at a rate of %
% of Purchase Price secured by Buyer and Seller
Total Bank Loan Need: $
% of Purchase Price
Desired Loan Type:
Desired Bank Terms: year term at a rate of %
Total Business Assets, Inventory, and A/R: $
Total Undercollateralized Loan: $
|Monthly Payment to Bank:||$|
|Yearly Payment to Bank:||$|
|Monthly Payment to Seller:||$|
|Yearly Payment to Seller:||$|
|Total Monthly Debt Service:||$|
|Total Yearly Debt Service:||$|
Fixed Charge Coverage Ratio
The bank will require a minimum ratio of 1.5 to be lendable.
2017 Cash Flow
|Annual Debt Service:||$|
Buyer's Net Operating Income (NOI)
The amount of money the Buyer will retain as profit.
2017 Cash Flow
|Annual Debt Service:||-$|
Buyer's Return on Investment (ROI)
The rate of return on the Buyer's down payment.
|Document Title / Description|
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