Opportunities
B2B Sales of Industrial Automotive Equipment
Sold
Lifts, compressors & fluid inventory controls are some of the industry specific product lines
Specifications
The 12,000 square feet of space contains a large, 2,000 square foot office, with the remainder (10,000 sq. ft.) being warehouse. The warehouse has open and rack storage, a loading dock as well as two large overhead garage doors. This space will be available for continued lease from the current owners.
In a continuation of successes, further diversification of clients can be found in expanding the enthusiast or trucking customer base as well as cross-industry companies that rely on the technology sold by this business. Companies include manufacturers or distributors that utilize compressors or who need lubrication systems to run their equipment.
Business Highlights
- Year Established: 1985
- Location: Columbus, Ohio
- Service Area: Ohio
- Clients: Auto shops, government agencies, and military
- Services: Sales, installation, service, repair
- Building: 12,000 sq. ft.: Office, warehouse with open and rack storage, two overhead garage doors, loading dock, available for continued lease
- Reason for Selling: Retirement planning/ moving to Florida
- Employees: 10: 5.5 technicians, 1.5 sales representatives, FT administrative coordinator, PT bookkeeper, PT office manager
- Seller Training Period: 6 months
- Growth Opportunities: Focus on marketing efforts, break into the enthusiast market or body shops, consider cross-over business revenue, build service contracts, add equipment lines i.e. paint booths
- Current Owner’s Responsibilities: Employee Management
Financial Highlights
- List Price: $1,630,000
- Gross Sales:
- 2019: $6,534,644 Annualized
- 2018: $3,736,929
- 2017: $3,124,766
- 2016: $3,244,888
- Cash Flow:
- 2019: $1,056,013 Annualized
- 2018: $261,126
- Assets Included in Purchase
- Equipment: $275,000: Vehicles, furniture, fixtures, and equipment
- Average Inventory: $190,000
- Average A/R: $300,000
- Current Contracts: $2,000,000
- Intangible Assets: Very diversified customer base, positive reputation, many long-term customers, good GC relationships, reputation for completing projects their competitors cannot
*amounts may vary
Cash Flow Analysis
| Description of Financial Statement | P&L Statement Jan -June | Tax Return | Tax Return | Tax Return | Notes |
| 2019 | 2018 | 2017 | 2016 | ||
| GROSS SALES | $0 | $3,736,929 | $3,124,766 | $3,244,888 | |
| Net Income Shown on Financial Statement | $550,047 | $62,592 | $200,216 | $470,223 | |
| ADDBACKS | |||||
| Compensation to Owner | $49,900 | $0 | $146,070 | $19,235 | New owner to take over roles of seller 1 |
| 11% Tax on total W2 Salaries | $5,489 | $0 | $16,068 | $2,116 | |
| Depreciation | $0 | $38,599 | $4,543 | $3,413 | |
| Interest | $15,628 | $28,969 | $16,684 | $11,487 | |
| Amortization | $0 | $4,000 | $4,000 | $4,000 | |
| Contributions/Donations | $1,980 | $0 | $0 | $0 | |
| 401K for Owner | $13,272 | $12,618 | $12,500 | $12,500 | Personal expense |
| Insurance Premiums for Owners: Health | $9,141 | $28,853 | $0 | $0 | Personal expense |
| Meals & Entertainment | $3,524 | $2,142 | $3,034 | $2,998 | 50% personal |
| Rent Adjustment | $-8,000 | $-19,398 | $2,855 | $-6,000 | Ongoing rent is $5,000/month |
| Replacement | $-29,000 | $-50,000 | $-50,000 | $-50,000 | To take on general admin roles of seller 2 |
| Cell Phones | $600 | $600 | $600 | $600 | |
| Computer Support | $0 | $0 | $21,001 | $0 | One-time cost |
| Consulting | $0 | $0 | $10,215 | $0 | One-time cost |
| Leased car | $3,427 | $0 | $0 | $0 | |
| Partner payment | $0 | $152,151 | $0 | $0 | |
| TOTAL ADDBACKS | $65,961 | $198,534 | $187,570 | $349 | |
| Seller's Cash Flow = Total Addbacks + Net Income | $616,008 | $261,126 | $387,786 | $470,572 | |
| Profit Margin | 0.00 % | 6.99 % | 12.41 % | 14.50 % |
Typical Clients
- Dealerships
- Municipalities
- Career schools
- Freight companies
- State of Ohio
- Transit and bus systems
- Local automotive care businesses
- National chain lube stations
- Military
Specific information regarding clients is available upon the receipt of a signed Non-Disclosure Agreement.
Services
- Equipment sales
- Installation
- Service
- Inspections
- Preventative maintenance
- Repairs
- Large projects
- Design
- Equipment sales
- One-stop services
- Efficient project management
Employees
Total employees: 10
- 5.5 Technicians
- One team member splits their time between sales and technician duties
- 1.5 Sales representatives
- 1 Administrative coordinator
- 1 PT accountant/bookkeeper
- 1 PT office manager
Growth Opportunities
- Focus on marketing efforts
- Break into the enthusiast market as well as body shops
- Consider cross-over business revenue
- Build service contracts
- Add new equipment lines i.e. paint booths
Valuation Details
The Firm 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 4 year avg. cash flow was used with a prescribed multiple is 3. With this information, the computation is as follows:
$543,874 x 3 = $1,631,622
The fair market value found above positions the business list price at $1,630,000.
Funding Example
Purchase Price: $1,630,000
12.5% Buyer Down Payment: $203,750
12.5% Seller Financing: $203,750
75% Bank Loan: $1,222,500
Seller financing 5-year term at a rate of 4.50% equals a monthly loan payment of $3,799.
Bank loan 8-year term at a rate of 6% equals a monthly loan payment of $16,065.
After business expenses and loan payments, a buyer with a 12.5% down payment of $203,750 would retain a profit of $305,507, which results in a 149% 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 $1,630,000 with the terms listed above, the coverage ratio is 2.28.
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.
Print, sign and send to:
210 N 78th St. 2nd FloorOmaha, NE 68114
Or fax to:
f 402.939.0857