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Midwest Rigging Contractor – Installment, Removal & Relocation

CASH FLOW
$460,477

Specifications

  • Price
    $2,600,000

  • Revenue
    $1,604,946

  • Cash Flow
    $460,477

  • Profit Margin
    28.6%

  • Equipment
    $980,000

  • Intangible Assets
    Presence Previously Established in 5 States: NE, IA, SD, KS, and MO.

  • Location
    Eastern Nebraska

  • Down Payment
    10%

  • Multiplier
    5.65

  • Service Area
    Daily jobs are typically completed within 150 miles of location, jobs have extended to Texas, New York, and California as well as into Canada.

  • Reason for Sale
    Planned transition to other business interests

  • Employees
    1 Office Manager; 2 Crews of 3 to 4 Workers, Crews include 1 Working Superintendent and 2 to 3 Workers. All staff are OSHA 10 Certified and take part in proactive safety training programs.

A heavy lifting company serving manufacturing, utility, and machinery industries. This rigging business provides the lifting power necessary to move manufacturing equipment, turbines, printing presses, and much more! With 7 different lifts, this company is able to take on a wide range of jobs. These projects originate in Nebraska and Iowa, but with the many connections with long-haul trucking companies and expert technicians, this business can help their customers move anywhere in the country.

Each project is assigned to one of two rigging crews. The crews consist of a working superintendent and 2-3 workers. Over 95% of the work is completed indoors, requiring special safety precautions. These crews are OSHA 10 certified to ensure the safety of all involved. They can put new equipment in place or load equipment for transport. When necessary, the business owners use the businesses well-established contacts to provide transportation and other technical services to their clients.

While only serving a limiting area and working on primarily smaller jobs worth $5,000-$8,000, this profit is impressive. Growth opportunities are abundant for this business and include expanding hauling operations and service area, as well as obtaining larger contracts, such as those related to medical equipment. 

Business Highlights

  • Year Established: 2005, At Current Location Since 2008

  • Employees: 1 Office Manager; 2 Crews of 3 to 4 Workers, Crews include 1 Working Superintendent and 2 to 3 Workers. All staff are OSHA 10 Certified and take part in proactive safety training programs

  • Hours: Monday – Friday: 8AM to 4:30PM

  • Current Owner’s Responsibilities: Business Administration, and Project Quoting (Only when needed)

  • Due to high barriers to entry in start-up costs for equipment, there is minimal competition in this industry

Location & Services

Located in Eastern Nebraska the business is servicing daily jobs typically with-in 150 miles of location. Jobs have extended to Texas, New York, and California as well as into Canada.

The business is currently serving markets in Manufacturing, Utilities and Energy, Printing Services, and Machine Tools.

Financial Highlights

  • List Price: $2,600,000
  • 2016 Gross Sales of $1,604,946
    • See chart below for a categorized sales overview for 2015
  • 2016 Cash Flow of $460,477
  • 2016 Profit Margin of 38%
  • $980,000 worth of assets included in the purchase
    • Equipment: $980,000
      • 5 Ford Trucks - $110,000
      • 4 Tractors - $180,000
      • 6 Trailers - $128,000
      • 7 Lifts - $562,000

*amounts may vary

Most projects completed by this business are only $5,000 to $8,000 in value. This means that this business has many clients and are not dependent on large contracts. While smaller business is important, this business currently has 2 bids out for jobs worth over $200,000 each. This shows that the business is able to take on jobs both big and small.

This business wins 65% of all bids placed. Having No Bid Required is to say that clients choose this business without asking for a bid price.

Cash Flow Analysis

Description of Financial StatementP&L Statement
January - December
Tax ReturnTax ReturnTax ReturnNotes
2016201520142013
GROSS SALES$1,604,946$2,189,245$2,418,043$2,211,338
Net Income Shown on Financial Statement$193,462$395,753$487,140$372,081
ADDBACKS
Compensation to Owner$80,000$312,000$242,000$208,000Total owner compensations
Other unrelated Salaries$2,363$2,734$2,735$2,735Wife - non-onward going expense
11% Tax on total W2 Salaries$9,060$34,621$26,921$23,181
Depreciation$168,035$118,043$121,501$110,738Non-cash item
Interest$69,193$68,648$74,993$133,748Non-onward going expense
Amortization$160$160$160$160Non-cash item
Health Insurance$37,575$25,630$25,064$23,2581/2 for owner's personal
Sublet Income$7,800$7,800$7,800$7,800Sublet income of $650/month
Long Term$2,829$0$0$0
Contributions/Donations$-110,000$-110,000$-110,000$-110,0001 owner remaining as consultant
TOTAL ADDBACKS$267,015$459,636$391,174$399,620
Seller's Cash Flow = Total Addbacks + Net Income$460,477$855,389$878,314$771,701
Profit Margin28.69 %39.07 %36.32 %34.90 %

Reasons for decrease in 2016 from 2015:

  • Though October & November 2016 were down months, December of 2016 was actually back on track with all other months. As a caveat to the 4th quarter of 2016 and the election impact (which was felt throughout our industry from speaking with other riggers/crane companies) it started to slow down in October and in November we experienced our worst month since our first 3 months of launching Prime. It bounced back to normal levels in December and the phone activity/inquiries have continued to be steady since then as well which gives us a very positive outlook for 2017.
  • Part of this is the ebb and flow of business
  • Manufacturing was down which is a significant portion of our business, particularly in the Ag sector.
  • As a result of #2 there were not as many what we consider to be large project ($100K range) as there have been in previous years
  • Part of the issue with #2 was also the uncertainty that is always surrounding an election year, however, the extremely contentious nature of this particular election and the impact that would have been realized if the previous administrations attitude toward business in general would have been maintained, I believe caused the last quarter of 2016 especially to be quiet from a project standpoint.
  • With the current administrations pro-business stance we’ve seen a significant upswing in calls for our services and these include a number of the large type projects mentioned in #3.
  • We also provide quotes on projects that get delayed from one year to the next due to budgets etc. (See Control Services project above. This was previously quoted directly to the manufacturing facility in 2015).

Purchase Price:

$2,600,000

$
%
OR
$
%
OR
$
Years
%

Bank Loan Needed: $

Years
%
$
$
$
$
$

Funding Details

Business:

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: $

Loan Payments

Monthly Payment to Bank: $
Yearly Payment to Bank: $
Monthly Payment to Seller: $
Yearly Payment to Seller: $
Total Monthly Debt Service: $
Total Yearly Debt Service: $

Conclusions

Fixed Charge Coverage Ratio

The bank will require a minimum ratio of 1.5 to be lendable.

Cash Flow:
2016 Cash Flow
$
Annual Debt Service: $
RATIO:

Buyer's Net Operating Income (NOI)

The amount of money the Buyer will retain as profit.

Cash Flow:
2016 Cash Flow
$
Annual Debt Service: -$
NOI:

Buyer's Return on Investment (ROI)

The rate of return on the Buyer's down payment.

Down Payment: $
NOI:
ROI: %

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