Commercial Concrete Company in Phoenix
With $5MM currently in the pipeline, this business only takes on projects from the ground up! With over 30 years of experience in the commercial concrete industry, this business provides 90% commercial services and 10% residential services. This business is always busy receiving several bids a day on top of their twenty current projects. The industry is on fire!! Their main projects include hospitals, storage facilities, gas stations, truck dealerships, truck stops, gyms and more!
Employees working for this company are highly trained and have all qualifications necessary for this type of work. On a daily basis, one of the owner’s roles is to organize new jobs, help with field organization and oversee field work, while the other owner handles office oversight, reads fine print contracts, oversees payroll and maintains a great company culture! Within the 75-mile radius this business serves, there is plenty of growth opportunities including: biding on WBE related contracts, government contracts, adding a division for excavation as well as adding more impeccable employees!
- Year Established: 2011
- Location: Out of home property in Gilbert, AZ. New owner will need to relocate business
- Service Area: Within 75 miles of Gilbert, AZ radius
- Clients: Shopping centers, urgent cares, schools, car dealerships, storage facilities, gas stations, truck stops and gyms. Hired by GC 90% of the time
- Services: Building concrete, site concrete, and off-site concrete. 90% of their work is commercial while 10% is residential
- Reason for Selling: Retirement and to focus on family
- Employees: 26: Estimator (1), Office Manager (1), field crew (20-24)
- Hours: M-F 7:30-3:330
- Seller Training Period: 90-day transition
- Current Owner’s Responsibilities: Owner 1: Field oversight, Owner 2: Office oversight
- List Price: $1,056,000
- Gross Sales:
- 2018: $3,359,931
- 2017: $2,426,146
- 2016: $2,523,399
- 2015: $1,927,296
- Cash Flow:
- 2018: $301,940
- 2017: $242,058
- 2016: $138,687
- 2015: $161,293
- Assets Included in Purchase*
- Pipeline: $5,000,000
- Intangible Assets: Long term relationships with contractors, website, and a knowledgeable team
*amounts may vary
Cash Flow Analysis
|Description of Financial Statement||P&L Statement||Tax Return||Tax Return||Tax Return||Notes|
|Net Income Shown on Financial Statement||$135,084||$51,911||$-22,368||$-2,611|
|Compensation to Owner||$43,980||$64,833||$54,677||$53,227||PhoxZee|
|Other unrelated Salaries||$64,750||$54,999||$54,676||$47,942||Elzia|
|11% Tax on total W2 Salaries||$11,960||$13,182||$12,029||$11,129|
|Meals & Entertainment||$7,201||$5,380||$6,398||$7,082|
|Seller's Cash Flow = Total Addbacks + Net Income||$301,940||$242,058||$138,687||$161,293|
|Profit Margin||8.99 %||9.98 %||5.50 %||8.37 %|
- General contractors
- Business owners
- This business starts all projects from the ground up! They do structural concrete, site concrete and off-site concrete that goes with the project. This company completes projects for hospitals, storage facilities, gas stations, truck dealerships, gas stations, pilot truck stops, gyms, and urgent care hospital centers.
- All estimates are free and flexible according to materials and scheduling.
- Most services are 90% commercial and 10% residential, specializing in structural concrete and decorative finishes.
- They subcontract some projects out like excavation and rebar work.
- Estimator (1)
- Office Manager (1)
- Project Manager (2)
- Field workers (18)
- Adding more WBE contracts
- Increase government contract works
- Adding a division for excavation
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 2018 cash flow was used with a prescribed multiple is 3.5. With this information, the computation is as follows:
$301,940 x 3.5 = $1,056,790
The fair market value found above positions the business list price at $1,056,000.
Purchase Price: $1,056,000
15%Buyer Down Payment: $158,400
15%Seller Financing: $158,400
70%Bank Loan: $739,200
Seller financing 5-year term at a rate of 4.50% equals a monthly loan payment of $2,953.
Bank loan 8-year term at a rate of 6% equals a monthly loan payment of $9,714.
After business expenses and loan payments, a buyer with a 15% down payment of $158,400 would retain a profit of $149,934, which results in a 94% 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 $1,056,000 with the terms listed above, the coverage ratio is 1.99.
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.
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Omaha, NE 68114
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