Asphalt Paving & Patching with Poured Concrete Services
If. you are looking for an in-demand asphalt paving business in a town booming with construction, then look no further than this gem. Started in 2010, this business has experienced rapid growth since 2014. Working on commercial and residential projects, the main services provided by this company are asphalt road repair and paving for municipalities, utilities, builders, and schools. Also offering poured concrete work, this business completes projects such as poured wall construction, footings, curbs, gutters, and storm ponds. Other services can include excavation, gravel paving, and parking lot preparation.
This growing company contracts with local municipalities, schools, utilities, and other entities to provide superior and low-cost options for maintenance, remodels, or new projects. With a highly-regarded name in the community and a marketing strategy that is hard to miss, this company is known for quality work, affordable prices, reliability, and an honest approach.
While this company has grown tremendously, there is much room for expansion and further gains. the owners have decidedly maintained a healthy, yet smaller business by choice. With a simple vendor registry process, acquiring new business is hassle-free. A new owner, looking to grow a business by increasing services and/or increasing the team, will be pleasantly surprised by the available work.
- Year Operational: 2010
- Location and Service Area: Tennessee
- Clients: Municipalities, Utilities, Schools, Builders
- Services: Asphalt patching & paving, poured concrete, excavation, gravel paving, and parking lot preparation
- Building: Currently very low overhead, details in BQ
- Reason for Selling: Focus on family
- Employees: (1) COO/Sr. Project Manager, (1) Office Manager, (2) Project Managers, (1) CDL Driver, (2) Leads, (3) Labor
- Seller Training Period: Sellers can stay on up to 1 year to maintain contacts, contracts, and consistency
- Growth Opportunities: Many inquiries about work come in daily, hire additional staff to increase capacity, high working capital will allow increased work potential, expand concrete services
- Current Owner’s Responsibilities: Business development/growth, regulatory compliance, quality control, payroll, vendor registry
- List Price: $2,020,000
- Gross Sales:
- 2017: $1,332,521
- 2016: $402,682
- 2015: $364,468
- Cash Flow:
- 2017: $522,032
- 2016: $40,733
- 2015: $113,914
- Assets Included in Purchase*
- Equipment: $810,365: Excavator, Hotbox, Paver, Tack Truck, Roller, Infrared Recycler, Western Star Truck, Tilt Trailer, Track Loader, Chevy Flatbed, GMC Flatbed, Gooseneck Trailer
- Intangible Assets: Reputable and positive name in the community, dynamic branding, positive word-of-mouth referrals, building boom in the area
*amounts may vary
Cash Flow Analysis
|Description of Financial Statement||P&L Statement|
|Tax Return||Tax Return||Tax Return||Tax Return||Notes|
|Net Income Shown on Financial Statement||$208,221||$70,728||$3,522||$3,114||$2,027|
|Meals & Entertainment||$0||$1,689||$0||$0||$139|
|Seller's Cash Flow = Total Addbacks + Net Income||$209,637||$522,032||$40,733||$113,914||$2,166|
|Profit Margin||71.12 %||39.18 %||10.12 %||31.25 %||4.79 %|
- 38% profit margin in 2017
- 228% growth from 2016-2017
- 263% growth from 2015-2017
- 2,826% growth from 2014-2017
- Subcontracting companies for builders
Specific information regarding clients is available upon the receipt of a signed Non-Disclosure Agreement.
- Prep Work
- Haul away
- Small area milling
- Parking lot preparation
- Asphalt Paving
- City roads
- Neighborhood roads
- Residential Driveways
- Parking lots
- Asphalt and Concrete Patching
- City roads
- Neighborhood roads
- Parking lots
- Concrete Work
- Storm Ponds
- Sewer Installation
- COO/Sr. Project Manager (1)
- Office Manager (1)
- Project Managers (2)
- CDL Driver (1)
- Leads (2)
- Labor (3)
- Many inquiries about work come in daily
- Hire additional staff to increase capacity
- High working capital will allow increased work potential
- Expand concrete services
- Add Line Stripping
- Add concrete curbs and sidewalks
- Add flagging
- Add sweeping
- Add milling
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, a 2017 Cash Flow was used with a prescribed multiple is 4. With this information, the computation is as follows:
$522,032 x 3.9 = $2,035,925
The Fair Market Value found above positions the business List Price at $2,020,000.
Purchase Price: $2,020,000
12.5%Buyer Down Payment: $252,500
12.5%Seller Financing: $252,500
75%Bank Loan: $1,515,000
Seller Financing 5-year term at a rate of 4.50% equals a monthly loan payment of $4,707.
Bank Loan 7-year term at a rate of 6% equals a monthly loan payment of $22,132.
After business expenses and loan payments, a buyer with a 12.5% down payment of $252,500 would retain a profit of $199,960, which results in a 79% return on investment in the first year.
A lender is required to have a minimum 1.5 coverage ratio for any business loans extended. At a proposed Purchase Price of $2,020,000 with the terms listed above, the coverage ratio is 1.62.
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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Omaha, NE 68114
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