Industrial Concrete Services
With 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.
- 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 1-3 years
- Growth Opportunities: Increase school contracts, invest in additional pumps, expand industrial projects
- Current Owner’s Responsibilities: Daily Oversight - No Labor
- List Price: $4,980,000
- Gross Sales:
- 2018: $8,526,506 Annualized
- 2017: $7,419,751
- 2016: $7,295,689
- 2015: $5,800,551
- Cash Flow:
- 2017: $1,090,165
- 2016: $1,108,330
- 2015: $605,608
- 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 Statement||P&L Statement|
|Tax Return||Tax Return||Tax Return||Notes|
|Net Income Shown on Financial Statement||$378,298||$569,804||$602,397||$190,358|
|Compensation to Owner||$85,634||$101,442||$97,104||$96,831|
|Other unrelated Salaries||$161,880||$9,500||$9,500||$9,500||Owner's wife's salary - not active in business|
|11% Tax on total W2 Salaries||$27,227||$12,204||$11,726||$11,696|
|401K for Owner||$7,000||$3,043||$2,913||$2,905||3% match for personal 401K|
|Dues & Subscriptions||$1,500||$3,795||$5,458||$2,523||50% is personal|
|Travel||$4,385||$6,625||$8,062||$6,179||75% is personal|
|Vehicle/Truck||$15,611||$90,095||$67,688||$73,696||75% is personal|
|Auto Insurance||$4,500||$6,000||$6,000||$6,000||Personal expense|
|Meals & Entertainment||$181||$1,053||$0||$258||60% on Bus 1 & 70% on Bus 2 is personal|
|Cell Phone||$5,200||$6,000||$6,000||$6,000||$500/month for personal lines|
|Fuel Expenses||$6,500||$7,200||$7,200||$7,200||$600/month is personal|
|Rent||$10,800||$10,800||$10,800||$10,800||Ongoing rent would be $3,600/month|
|Life & Medical Insurance||$34,050||$0||$0||$0|
|Seller's Cash Flow = Total Addbacks + Net Income||$820,121||$1,090,165||$1,108,330||$605,608|
|Profit Margin||11.53 %||14.69 %||15.19 %||10.43 %|
Typical Clients and Services
- Medical facilities
- Residential builders
- Multi-family housing
- Storage facilities
- Assisted living facilities
- And more!
- Flat slab
- Concrete pumping
- Laser screeding
- Specialized color and texture
- And more!
Specific information regarding clients is available upon the receipt of a signed Non-Disclosure Agreement.
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)
- Increase school contracts
- Invest in additional pumps
- Expand industrial projects
- Increase concrete pumping equipment acquisitions to expand pumping revenue from outside customers
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 4.57. With this information, the computation is as follows:
$1,090,165 x 4.57 = $4,982,054
The fair market value found above positions the business list price at $4,982,054.
Purchase Price: $4,980,000
12.5% Buyer Down Payment: $622,500
12.5% Seller Financing: $622,500
75% Bank Loan: $3,735,000
Seller financing 5-year term at a rate of 4.50% equals a monthly loan payment of $11,605.
Bank loan 10-year term at a rate of 6% equals a monthly loan payment of $41,466.
After business expenses and loan payments, a buyer with a 12.5% down payment of $622,500 would retain a profit of $453,308, which results in a 73% 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 $4,980,000 with the terms listed above, the coverage ratio is 1.71.
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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