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Opportunities

Concrete Biz w/62 Employees & $2M+ in Assets

CASH FLOW
$700,076

Specifications

  • Price
    $4,106,000

  • Revenue
    $8,570,346

  • Profit Margin
    15%

  • Equipment
    $2,000,000

  • Location
    Indianapolis

  • Service Area
    Central Indiana

  • Employees
    62: Controller (1), Director (1), Project Manager (1), Assistant PM (1), Dispatch (1), Administrative (1), Superintendent (1), Field Superintendent (1), Foreman (1), Field Personnel (50), Pump Operators (3)

  • Intangible Assets
    Diversified clients and services, well-trained team, mindful growth over the years, risk averse practices, location was less susceptible to the impact of the recession

  • Lease
    4,500 sq. ft.: Office and shop; 2,500 Shop; large yard with covered storage

 

The owner will stay on for 3-5 years post close for this concrete business that boasts over $2M in vehicles and equipment and over $2MM in secured work. This full-service commercial concrete installer is fit for growth. With an owner that completes no labor, this company capitalizes on the team’s expertise in the full spectrum of concrete services. Projects include flat slabs, tilt walls, structural walls and slabs, foundations, curbs, walkways, driveways, walls, and basements.  Specialized services include laser screening, stamping, staining, added texture, and concrete pumping.    With over $2MM in assets, this company owns the equipment and pumps necessary to complete high-quality projects without the additional overhead of renting. 

 

Working within an 80-mile radius of their headquarters, no overnight travel is required.  Capitalizing on the growing amount of work in Central Indiana, the 62-member team tackles projects for schools, multi-family housing contractors, hotels, medical facilities, and storage facilities, to name a few.  Working on public and private contracts, this company has a very diversified customer base and works consistently throughout the year.  About 70% of concrete pumping income comes from outside customers.

 

Potential growth could be found in increasing school and industrial projects as there are several located near this business.  Additional pumps could be acquired to increase capacity, if desired.   There is also a lot of room to grow the pumping business to outside customers with additional equipment acquisitions.  Currently managed by an owner/operator, this seller has general oversight of daily operations, bids, and will assist in project management when assistance is needed.  This owner does not do any field work other than occasional site visits.   

 

Business Highlights

  • Year Established: 1995
  • Location and Service Area: Indianapolis
  • Services: Full service commercial concrete contracting: Flat slab, concrete pumping, foundations, curbs, walkways and driveways, etc.
  • Clients: Commercial clients
  • Building: 4,500 sq. ft.: Office and shop; 2,500 Shop; large yard with covered storage
  • Reason for Selling: Exit strategy
  • Employees: 62: Controller (1), Director (1), Project Manager (1), Assistant PM (1), Dispatch (1), Administrative (1), Superintendent (1), Field Superintendent (1), Foreman (1), Field Personnel (50), Pump Operators (3)
  • Hours: M-F 8-5
  • Seller Training Period:  Owner is willing to stay on 3-5 years
  • Growth Opportunities: Increase school contracts, invest in additional pumps, expand industrial projects
  • Current Owner’s Responsibilities: Daily Oversight - No Labor

Financial Highlights

  • List Price: $4,106,000
  • Gross Sales:
    • 2018: $8,570,346
    • 2017: $7,419,751
    • 2016: $7,295,689
  • Cash Flow:
    • 2018: $700,076
    • 2017: $1,090,165
    • 2016: $1,108,330
  • Assets Included in Purchase*
    • Secured POs: $2MM
    • Equipment: $625,000
    • Vehicles: $1,394,000
    • Intangible Assets: Diversified clients and services, well-trained team, mindful growth over the years, risk averse practices, location was less susceptible to the impact of the recession

*amounts may vary

Cash Flow Analysis

Description of Financial StatementP&L StatementTax ReturnTax ReturnTax ReturnNotes
2018201720162015
GROSS SALES$8,570,346$7,419,751$7,295,689$5,800,551
Net Income Shown on Financial Statement$172,236$569,804$602,397$190,358
ADDBACKS
Compensation to Owner$93,661$101,442$97,104$96,831
Other unrelated Salaries$177,030$9,500$9,500$9,500Owner's wife's salary - not active in business
11% Tax on total W2 Salaries$29,776$12,204$11,726$11,696
Depreciation$0$194,450$53,931$73,331
Interest$89,906$68,154$219,551$108,331
Property Taxes$5,862$0$0$0
401K for Owner$0$3,043$2,913$2,9053% match for personal 401K
Dues & Subscriptions$3,743$3,795$5,458$2,52350% is personal
Travel$5,055$6,625$8,062$6,17975% is personal
Vehicle/Truck$46,541$90,095$67,688$73,69675% is personal
Auto Insurance$6,000$6,000$6,000$6,000Personal expense
Meals & Entertainment$181$1,053$0$25860% on Bus 1 & 70% on Bus 2 is personal
Cell Phone$6,000$6,000$6,000$6,000$500/month for personal lines
Fuel Expenses$72,000$7,200$7,200$7,200$600/month is personal
Rent$12,974$10,800$10,800$10,800Ongoing rent would be $3,600/month
Life & Medical Insurance$43,911$0$0$0
TOTAL ADDBACKS$592,640$520,361$505,933$415,250
Seller's Cash Flow = Total Addbacks + Net Income$764,876$1,090,165$1,108,330$605,608
Profit Margin8.92 %14.69 %15.19 %10.43 %
.

Typical Clients and Services

Commercial Clients:

  • Schools
  • Medical facilities
  • Hotels
  • Residential builders
  • Multi-family housing
  • Hotels
  • Storage facilities
  • Assisted living facilities
  • And more!

Services:

  • Flat slab
  • Concrete pumping
  • Foundations
  • Curbs
  • Walkways
  • Driveways
  • Laser screeding
  • Stamping
  • Waterproofing
  • Specialized color and texture
  • And more!

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

Employees

Total Employees 62

  • Controller (1)
  • Director (1)
  • Project Manager (1)
  • Assistant PM (1)
  • Dispatch (1)
  • Administrative (1)
  • Superintendent (1)
  • Field Superintendent (1)
  • Foreman (1)
  • Pump Operators (3)
  • Field Personnel (50)

Growth Opportunities

  • Increase school contracts 
  • Invest in additional pumps 
  • Expand industrial projects 
  • Increase concrete pumping equipment acquisitions to expand pumping revenue from outside customers

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, a 3-year average cash flow was used with a prescribed multiple is 4.25.  With this information, the computation is as follows:

$966,190         x          4.25     =          $4,106,308

The fair market value found above positions the business list price at $4,106,000.

Funding Example

Purchase Price:                          $4,106,000

12.5%Buyer Down Payment:   $513,250

12.5%Seller Financing:            $513,250

75%Bank Loan:                      $3,079,500

Seller financing 5-year term at a rate of 4.50% equals a monthly loan payment of $9,569.

Bank loan 10-year term at a rate of 6% equals a monthly loan payment of $34,189.

After business expenses and loan payments, a buyer with a 12.5% down payment of $513,250 would retain a profit of $441,102, which results in a 86% 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 $4,106,000 with the terms listed above, the coverage ratio is 1.84.  

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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