• Year Established:  12 years
• Location:  Products manufactured in Nebraska and shipped all over North America
• Service Area:  More than 600 US retailers
• Clients:  Sold direct to feedlots, cattle ranches, zoos, oil fields, hundreds of retail locations, No one customer makes up more than 10% of sales
• Production:  5,000 – 6,000 water tanks per year
• Reason for Selling:  Retirement
• Employees: 11: Office Manager, Logistics Coordinator, Office Clerk, Sales, Tech, Supervisors (2), Laborer (4)
• Seller Training Period: Seller will train and transition for up to 2 years if desired by the buyer
• Growth Opportunities:  Create product diversity, batch at facility to eliminate cement trucks.  The current owners have a 10-year vision that they are willing to share!
• Current Owner’s Responsibilities:  Management, accounting and marketing
• Stock sale ensures the ability for a new owner to maintain import/export rights
• Manufacturing is done in Nebraska

• List Price: $850,000
• Gross Sales:
  • 2017: $1,722,416
  • 2016: $1,250,885
• Cash Flow:
  • 2017: $218,953
  • 2016: $150,220
• Assets Included in Purchase*
  • Equipment: $458,667
    • $343,331 in concrete forms (5 gal. - 210 gal.)
    • $20,435 in office equipment: Computers, scanners, furniture and display equipment
    • $94,901 in tools & equipment: Air compressors, saws, hammer drill, fuel stand, crane & trolley, spreader beam, paint sprayer and more!
  • Vehicles: $63,154: cement trucks, pickups, trailers, and truck box
  • Inventory: $452,280
  • Intangible Assets: Proprietary concrete blend & water agitator
  • A/R: $148,047
  • Trademarks: 2 trademarks; all are trademarked to the company and not the owners

*amounts may vary

We formed this company to create an outlet for our expertise in manufacturing, wholesale sales and retail sales.  Our feeling from the start is that the people in this world that have the most to benefit from the internet are rural people that can’t just jump in a vehicle and go get what they need or shop for it properly.

We have our own product which we have developed over 30 years, and we supply North America’s largest feed yards, dairies, ranch operations, wildlife parks and zoos. 

In addition, we are a very large supplier of wholesale products and have our line in a few hundred ag retail stores in the USA. Our company is the only company that has taken the time to develop a proper retails sales program for replacement parts which go in livestock water tanks, bowls, troughs and any homemade livestock watering system.

• The Grant Interest through the US entity is due to a grant awarded by the Nebraska town that is home to the company’s plant, and was awarded to help increase growth
• Note: In 2016 the entire agriculture industry saw a downturn.
• When reviewing financials from 2017, consider the $1,075,384 in unbilled Work in Progress and Signed Contracts. This is not part of the Gross Sales.

• The majority of the client base is wholesale purchasers
• Orders from these sources are poured, drop-shipped and received by the client within a 2-week period
• Retail locations are net 45 day for accounts receivable
• Stocked in a few hundred retail stores across the US

• Exclusive Distributor for the largest manufacturer of cattle, equine and rodeo equipment in the world!

The remaining client sales are direct to consumer:

• North America’s largest feed yards, dairies and ranch operations (from goats to horses)
• Wildlife parks and zoos (elephants, rhinos, musk ox, hippos, buffalo, etc.)

* These customers are usually supplied directly or through retail distribution centers.

• No one customer makes up more than 10% of sales
• Dealer markup – 40%
• Direct to customer markup – 25%
• Parts account or 33% of business, with 20,000 sold per year
• The company has a universal barcoding license for nearly 10,000 products

Sales Percentages by Customer Type:

• Retail Locations – 50%
• Feedlots – 27%
• Cow/Calf Operations – 14%
• Trade Shows – 5%
• Oilfields – 3%
• Zoos & Wildlife Parks– 1%

Sales:

• Trademarked products: 67%
• Exclusive Rodeo Distributor: 19%
• All else (manure tanks, hog equipment): 14%

Non-Cattle Sales Clients:

• Balzer
• Nuhn
• Hydro
• Koca
• VTI
• Better Air

• Trademarks and Patents
  • 2 trademarks in US
  • 400+ SKU’s
  • The actual product is not patented and does not need to be
  • Employees are not bound by non-compete contracts as they are not privy to the concrete blends and chemical additives
  • Proprietary coating is not patented and doesn’t need to be
    • Pigments, etc. are specific to the customer base
• Water tanks have a 10-year warranty, and only 16 have been replaced in nearly 20 years
• 30+ forms of steel and fiberglass are used in making water bowls
  • 25-30 bowls are made per day 

The manufacturing of these high-quality water tanks includes a special process from the development of precast hulls to a special type of concrete to ensure strong products.  This company also developed a proprietary concrete recipe only known by 3 people (the two current owners and the concrete mixer who is under strict confidentiality).  The business owns 2 concrete trucks which are batched twice a day, and the staff tests every other batch to ensure accuracy.  The process also includes proprietary coatings with a 6-step application process. 

Included in the manufacturing of these products is an auto-flow system designed to keep a continuous flow of water in the system to keep it from freezing.  There are no adjustments to make on this product making it a durable and easy system to use.  Water sensor stirs the water in the bowl to stop channeling to the overflow drains.

• Develop ability to batch at the facility to eliminate the need for cement trucks
  • Increases profitability by eliminating margin used to batch the concrete paid now
• Create product diversity
  • There is no end to items that need to be precast in the Midwest and Canada
  • Tool up to create them
• Erect a building to house pouring, curing and coating
• Current owners have a 10-year vision they are willing to share with a buyer!

Total Employees (11)

• Office Manager
  • All accounting and bookkeeping
    • Oversees Canada’s bookkeeping
  • Central purchasing for both branches
  • US payroll and tax reporting
• Accounts Receivable and Logistics Coordinator
  • All A/R invoicing
  • Arrange incoming and outgoing shipments
• Office Clerk
  • Control and maintain all inventory levels for production
  • Automate purchase orders in accounting system
• Outside Salesman
  • All outside sales to feedlots
• Assembly Technician
  • Assembly and inspection of all waterers
  • Supervise assembly staff
• Plant Supervisor
  • Supervise all manufacturing procedures/yard employees
  • Hire and train staff for pouring, painting and assembly
• Pour Bay Supervisor
  • Prepare & pour forms for pouring water bowls
• Laborer/Painter
  • Prepare & paint cured hulls for painting
  • Maintain paint bay and paint supplies
• Laborer/Cement Pouring
  • Prepare forms for cement pouring
  • Inspect and repair imperfections
• Laborer/Assembly
  • Assemble painted water bowls
• Laborer/CDL Truck Driver
  • Drive cement truck to pick up cement
  • Assist pouring concrete on site

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 3.6.  With this information, the computation is as follows:

$218,953         x          3.9       =          $853,917

The Fair Market Value found above positions the business List Price at $850,000.

Purchase Price:                             $850,000

12.5% Buyer Down Payment:       $106,250

12.5% Seller Financing:                $106,250

75% Bank Loan:                             $637,500

Seller Financing 5-year term at a rate of 4.50% equals a monthly loan payment of $1,981.

Bank Loan 8-year term at a rate of 6% equals a monthly loan payment of $8,378.

After business expenses and loan payments, a buyer with a 12.5% down payment of $106,250 would retain a profit of $94,651, which results in a 89% 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 $850,000 with the terms listed above, the coverage ratio is 1.76. 

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.