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Asbestos Removal with 1.6MM in Upcoming Projects

CASH FLOW
$526,044

Specifications

  • Price
    $1,225,000

  • Revenue
    $3,044,345

  • Cash Flow
    $526,044

  • Equipment
    $1,113,609

  • Inventory
    $81,119

  • Multiplier
    3.52

  • Location
    Omaha, Nebraska

  • Account Receivable
    $750,094

  • Lease
    $4,200

  • Reason for Sale
    Retirement

  • Profit Margin
    17%

  • Employees
    20 Abatement technicians, 3.5 Office

 

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.

Business Highlights

  • 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
    • Hospitals
    • Schools
    • Universities
  • 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

Financial Highlights

  • 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
  • Upcoming Work: $8-10M

*amounts may vary

Recasted Cashflow Analysis

Description of Financial StatementP&L Statement
Jan-May 15
P&L StatementTax ReturnNotes
201820172016
GROSS SALES$1,117,650$3,324,817$4,474,549
Annualized$3,044,345
Net Income Shown on Financial Statement$167,362$215,800$114,192
ADDBACKS
Compensation to Owner$33,400$84,475$130,830
11% Tax on total W2 Salaries$2,664$9,292$14,391
Depreciation$0$0$10,586
Interest$530$1,327$3,724
Meals & Entertainment$1,666$500$500Personal Expense
Contributions/Donations$7,487$31,787$0
Subscriptions$2,846$5,078$4,227Creighton & NE football tickets
Non-Business Telephone$991$2,700$2,700Personal Expense
Insurance Premiums for Owners: Life$188$1,287$429Personal Expense
Professional Fee$26,989$44,000$0One-time legal expense
Rent Adjustment$-1,000$2,400$2,400Onward-going rent $4,000/month
Owner fee$-50,000$-50,000$0For staying on after sale
TOTAL ADDBACKS$25,761$132,846$169,787
Seller's Cash Flow = Total Addbacks + Net Income$193,123$348,646$283,979
Annualized
Profit Margin17.28 %10.49 %6.35 %
  • 17% profit margin
  • $50,000 negative addback for owner to stay after sale

Typical Clients

  • Hospitals
  • Large industrial buildings
  • K-12 Schools
  • Universities

Specific information regarding clients is available upon the receipt of a signed Non-Disclosure Agreement.

Services

  • Asbestos Abatement
  • Insulation
  • 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

Employees

  • 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

Growth Opportunities

  • Expand Team
  • Expand Lead Remediation Services
  • Expand Insulation Services
  • Expand Fireproofing Services

Valuation Details

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.

Funding Example

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. 

 

Purchase Price:

$1,225,000

$
%
OR
$
%
OR
$
Years
%

Bank Loan Needed: $

Years
%
$
$
$
$
$

Funding Details

Business:

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: $

Loan Payments

Monthly Payment to Bank: $
Yearly Payment to Bank: $
Monthly Payment to Seller: $
Yearly Payment to Seller: $
Total Monthly Debt Service: $
Total Yearly Debt Service: $

Conclusions

Fixed Charge Coverage Ratio

The bank will require a minimum ratio of 1.5 to be lendable.

Cash Flow:
2017 Cash Flow
$
Annual Debt Service: $
RATIO:

Buyer's Net Operating Income (NOI)

The amount of money the Buyer will retain as profit.

Cash Flow:
2017 Cash Flow
$
Annual Debt Service: -$
NOI:

Buyer's Return on Investment (ROI)

The rate of return on the Buyer's down payment.

Down Payment: $
NOI:
ROI: %

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210 N 78th St. 2nd Floor
Omaha, NE 68114

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