Return To Opportunities List

Opportunities

Environmental Testing & Geotechnical Engineering

Sold

CASH FLOW
$431,778

Specifications

  • Price
    $1,295,000

  • Cash Flow
    $431,778

  • Revenue
    $786,644

  • Profit Margin
    54%

  • Equipment
    $220,700

  • Inventory
    $456,891

  • Valuation
    $1,295,334

  • Multiplier
    3.00

  • Down Payment
    20%

  • Location
    Central Southwestern Nebraska

  • Service Area
    NE, CO, WY, SD, KS

  • Reason for Sale
    Retirement

With licensed staff in place and seller training for up to one year, this geotechnical engineering and environmental testing firm is the perfect size for a new owner to maintain existing clients or pursue growth opportunities.  Located in Central Southwestern Nebraska, this company services a 4-hour radius that encompasses Nebraska and parts of Colorado, Kansas, Wyoming and South Dakota.  The current owner has spent 35+ years in the industry and is looking for something new to do.

There are 8 certified staff in place to help complete the 400+ projects bid each year.  Areas of specialty include wetland management, drilling for wells, construction materials & testing, and direct push technology for soil sampling.  Typical clients are architects and engineers during initial designs, cities and municipalities, power districts, general contractors for quality control, and lending institutions needing environmental assessments for loan purposes.  

Projects can last anywhere from 1 day to a few weeks, or even years depending on the scope.  Service consists of completing physical testing requested by the clients, analyzing the samplings, compiling the findings into professional reports and submitting to the client for further action and compliance. Based on these results, the client is then able to move forward with the next phases of their projects or are able to be directed in a new direction as needed.

The current owner is responsible for proposal writing and drafting, technical writing, project management and oversight as well as field work.  However, all employees are well-trained and have years of experience.  Almost all of the owner’s duties are regularly performed by the staff so that day-to-day management does not require his presence.  

The building is 4,000 sq. ft. leased at $1,300/month with the office only occupying 1/3 of it.  Storage is ample for all equipment.  Business is somewhat seasonal, with an influx of construction projects during spring, summer and fall months.  The winter is hardly a down time, as there are still projects and equipment maintenance to do.

Growth exists in expanding service and territory area, as well as accepting the numerous job bids that the current owner has passed on due to pulling back from the business.  The oil and gas industry is also fairly robust, and the current owner recommends moving into Phase II testing in that industry. 

Mission Statement

We aim to improve the quality of construction, delivering solidly constructed facilities, safely, on time, and on budget. We have the depth of resources to take your project from ground breaking through ribbon cutting. We have been providing cost-conscious, innovative design/build approaches for the design and construction of:


  • Energy projects
  • Vertical structures/buildings
  • Potable water distribution systems
  • Medical facilities
  • Housing and dining facilities
  • Aircraft hangars
  • Runways
  • Utilities
  • Roads
  • Parking lots

Our construction services include vertical and horizontal construction, shoreline construction, and facilities sustainment, restoration and modernization.

We also provide a variety of support services related to construction efforts, including geo-technical drilling, construction management, inspection services, and other technical services. 

Environmental services include sub-surface investigations, remediation services, Phase 1 ESAs, asbestos inspections, mold inspections and other services.

Cash Flow Analysis

Description of Financial StatementP&L StatementTax ReturnTax ReturnTax ReturnNotes
2016201520142013
GROSS SALES$786,644$819,277$1,156,930$1,142,483
% Change Over Prev. Year-3.98 %-29.19 %1.26 %
Net Income Shown on Financial Statement$290,539$266,611$451,264$476,822
ADDBACKS
Compensation to Owner$75,000$75,250$69,615$64,500
Other unrelated Salaries$24,000$24,000$24,000$24,000Wages to children ($13,000 and $11,000)
11% Tax on total W2 Salaries$10,890$10,918$10,298$9,735
Depreciation$0$21,065$18,203$25,960Non-cash item
Interest$0$4,847$0$0Non-onward going expense
Non-Business Telephone$2,758$2,758$2,758$2,7584 cell phones
Insurance Premium for Owners' Health$0$10,547$10,547$10,547
Insurance Premium for Owners' Auto$2,131$1,071$1,071$1,071Vehicle/trailer insurance
Charitable Contributions$1,560$0$0$0
Auto Expense$24,900$0$0$0One-Time Only Expense
TOTAL ADDBACKS$141,239$150,456$136,492$138,571
Seller's Cash Flow = Total Addbacks + Net Income$431,778$417,067$587,756$615,393
Profit Margin54.89 %50.91 %50.80 %53.86 %

 

  • 54% profit margin in 2016
  • Sales dropped in 2015 due to the owner not taking any new bids, but with a return to taking new jobs, sales will easily increase to over $1m

3 Areas of Service

  • Geotechnical Engineering – generally earns $140,158 in services
    • Focuses on preliminary and proactive subsurface testing for new structure construction to take place
    • Usually occurs prior to any construction taking place
    • Typical clients are architects and engineers
  • Construction Material & Inspection – generally earns $784,105 in services
    • Inspection of material specified in Construction Plans throughout entire projects, various inspections at various phases
    • As the project advances new inspections are required
    • Average project is over 3 – 4 months
    • Typical clients are private industry (power suppliers, grain elevators), contractors, schools, hospitals and city governments
  • Environmental Testing – generally earns $181,258 in services
    • Test for mold, radon, air quality and asbestos
      • Typical project is completed within a single visit or a few days
    • Remediation of contaminated soil and water
      • Average project is 1 – 3 years
    • Typical clients are Nebraska Department of Environmental Quality, banks and petroleum outfits

Services Offered

  • Wetland Management
    • Wetland and riparian delineation
    • Landscape-wide wetland and riparian mapping with integration into GIS
    • Wetland restoration
    • Design & construction of treatment wetlands
    • Monitoring & assessment of treatment wetland efficiency
    • Long-term management of treatment wetlands
  • Drilling
    • Technical drilling and well installation for waste management facilities, industrial facilities, civil infrastructure and superabundant remediation projects
    • Drill rig meets the diversity of field terrains through the United States
    • Well monitoring includes:
      • Nested monitoring
      • At-grade installations
      • Piezometers
      • 2” & 4” diameter monitoring
      • Grouting or removal of existing monitoring wells
  • Construction Materials Engineering/Testing
    • Engineering and testing services to confirm quality of construction materials
      • Materials research and assistance with specification writing for materials
      • Pavement design and evaluation
    • Asphalt & concrete observation and testing
    • Batch plant observation
    • Site grading and foundation earthwork observation
  • Direct Push Technology
    • Soil and groundwater sampling through direct push sub-surface sampling
    • Groundwater sampling
    • Soil-gas sampling
    • Deployment of continuous logging equipment

Top 20 Clients

  • University of Nebraska
  • Black Veatch
  • Nebraska Department of Environmental Quality
  • Koss Construction
  • Carrothers Construction
  • Cheever Construction
  • AECOM (NPPD)
  • Tyson Fresh Meats
  • BD Construction
  • City of North Platte
  • Maverik Inc
  • Cardno ATC
  • Hewgley Associates
  • Ag Valley Coop
  • Nebraska Public Power
  • Paulsen
  • Custer County Department of Roads
  • Cement Products
  • Western Engineering
  • Midplains Community College

 ** None of top 20 clients more than 5% of total sales

** Complete over 400 projects each year

 ** Most contracts with clients and projects are made in the late winter and early spring.  This is the typical practice in the industry.

Source of Referrals

  • Concrete Plants
  • Bankers
  • Ag: Grain Bins, Feedlots, etc.
  • Architects & General Contractors
  • Plume
  • Schools 

Recent Projects

Nebraska

  • Medical office building - North Platte
  • Expansion of emergency services - North Platte
  • Airport hangar
  • U-Haul Center
  • Car wash
  • US Highway 83
  • McCook Holiday Inn
  • Platte Valley School
  • Mullen Senior & Assisted Living

Kansas

  • Cheyenne Senior Living

Colorado

  • Holyoke Hospital
  • Paoli Elevator tanks

Owner's Responsibilities

  • Review work performed by staff
  • Proposal writing/drafting
  • Technical report writing
  • Project management and oversight
    • Also does field drilling, inspecting and testing
  • Hiring and supervising
  • Marketing

** Owner has a technical background of 35 years’ experience and an Associate’s Degree in Drafting. 

** All staff is trained and can cover the owner’s duties and routinely do so.  Owner doesn’t need to be present to manage day-to-day responsibilities.

Employees

All technicians are certified by ACI, NICET, ICBO, AWS and other appropriate agencies.

Paid Time Off is earned for those working 40 to 80 hours.  This includes sick time and 6 paid holidays.

Typical winter hours are 40 per week.  During the busy season, this can increase to 50-60 hour per week.

During the spring and summer, seasonal employees are hired to help with the busy season.

Work is seasonal, but employees spend the winter maintaining equipment, calibrating and completing routine projects.

 

  • Environmental Manager – 20+ years
    • $24.36/hour ($66,848/year)
    • Plans, manages and performs Phase I and II environmental site assessments
    • Schedules and coordinates field activities
  • Lab Manager – 3 years
    • $12/hour ($29,953/year)
    • Handles incoming lab work and schedules technicians
    • Experience with the Army Corps of Engineers
  • Geotechnical Engineer – 12 years
    • $22/hour ($13,728/year)
    • Staff engineer – proposal writing, field and subsurface explorations
    • Performs analyses and develops recommendations
  • Senior Technician – 3 years (with 28 years of experience)
    • $17.50/hour ($21,091/year)
    • Concrete field testing
    • Construction oversight/inspection
  • Lab Technician/Driller – 8 years
    • $12.50/hour ($19,867/year)
    • Soil testing – drilling, coring, sampling
    • CMT services – specific gravity analysis, field observation of asphaltic pavement
  • Weld Inspector – 6 years
    • $18.30/hour ($22,313/year)
    • Field and laboratory inspection and CMT
    • Experience in mine engineering
  • Office Manager – 2 years
    • $11/hour ($16,109/year)
    • Handles payables, collections and time entry

Market Outlook and Growth Opportunities

  • There is no immediate competition in the 4-hour service area
    • There are a few competitors outside of this radius, but they don’t generally overlap
  • There will always be a need for the services provided to comply with industry and governmental standards
  • The economy continues to grow, especially in Nebraska
    • Infrastructure improvements will demand the services this company specializes in
    • New construction will need studies before, during and after construction for safety compliance
  • Currently the company’s involvement in oil and gas has been limited to Phase I and petroleum clean-up of subsurface soils and groundwater – this would be an excellent area to expand into Phase II Environmental Site Assessment
    • Phase I consists of reporting potential or existing contamination liabilities
    • Phase II is an investigation involving gathering samples of soul, groundwater or building materials to analyze for various contaminants
  • In 2015, the current owner didn’t take new clients or bid new jobs
    • Bid for more jobs and increase marketing
    • Appoint individuals to take on the marketing and don’t pass on projects
      • By submitting bids, the sales/profit would easily increase

Purchase Structure

The owner of this business experienced incredibly consistent sales for the majority of its ownership. See the following annual sales totals:

  • 2013: $1,142,483
  • 2014: $1,156,930
  • 2015: $819,277
  • 2016: $786,644

2015 & 2016 have been anomalies due to the business owner spending the majority of each year away from the company

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.

With this information, the computation is as follows:

$431,778        x          3          =          $1,295,334

Click to download NDA form

Print, sign and send to:

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

Or fax to:

f 402.939.0857

Thinking of Selling?
The top 5 questions to ask any potential broker:


The Firm Business Brokerage is not a real estate brokerage and therefore the staff will not handle any aspect of the lease, sale or purchase of real estate.