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Premium Pet Food & Treats

CASH FLOW
$125,160

Specifications

  • Price
    $395,000

  • Revenue
    $501,735

  • Profit Margin
    34%

  • Location
    Boston, MA - Relocatable

  • Service Area
    88% National, 12% International

  • Inventory
    $280,000

  • Employees
    2 FT, 1 PT: all shared with other business

  • Lease
    2 Locations: MA: 5,000 sq./ft. warehouse. CA: 5,000 sq. ft. warehouse

  • Intangible Assets
    Great customer interest in the products, unique offerings with less competition, all products are sourced and in production, unique customer base

With a premium protein line-up featuring canned & jerked products, this company is intent on manufacturing high-quality and healthy food for dogs and cats. With two warehouse locations on opposite coasts, this business sells directly to 109 individual retailers and works with 9 distributors (who sell to 5,000+ independent retailers across the US and Canada). Specializing in filler-free and exotic pet foods, products include dry and wet food as well as jerky and freeze-dried treats. Unique offerings position this business on the up-and-coming demands of the pet food industry.

With ingredient sourcing from around the globe, manufacturers located in Canada, Australia, New Zealand, and the United States have access to high-quality proteins and carefully designed recipes offering high nutritional value.  

Employees are currently shared with the owner’s non-competing business. Who remains with the company is negotiable but considering that sales and manufacturing are done outside of the premises, minor operational staff should be easy to acquire.  The owner currently spends an estimated 15% of working time on this company, demonstrating that growth could be exponential if a buyer were to dedicate further time to the business.  Additional growth can be found in bringing a sales and marketing staff in house to reduce costs paid to the representation firm.   

Business Highlights

  • Years in Business: 4
  • Service Area: 88% National, 12% International
  • Distributors:  9
  • Number of Direct Accounts: 109
  • Products: Cat food (wet), dog food (dry and wet), and cat and dog treats (jerky and freeze dried)
  • Lease Information: 2 Locations: MA: 5,000 sq./ft. warehouse. CA: 5,000 sq. ft. warehouse
  • Average Sale: $3,000 to distributors; $1,000 to stores
  • Employees: 2 FT, 1 PT: all shared with other business
  • Hours: CA: 8-4:30, MA: 9-5
  • Seller Training Period: 90 Days
  • Growth Opportunities: Create additional product lines, work with more distributors, reach out to additional retailers, consider big box retail
  • Current Owner’s Responsibilities: Passively Owned; about 15% of time spent on this business

Financial Highlights

  • List Price: $395,000
  • Gross Sales:
    • 2018: $501,735
  • Cash Flow:
    • 2017-18 Average: $125,160
  • Assets Included in Purchase*
    • A/R: $112,000
    • Backlog:  $26,000
    • Inventory: $280,000
    • Pipeline: $125,000-$350,000
    • Intangible Assets: Great customer interest in the products, unique offerings with less competition, all products are sourced and in production, unique customer base

*amounts may vary

Products

Cat

  • Wet food
  • Freeze-dried treats

Dog

  • Dry food
  • Wet food
  • Freeze-dried treats
  • Jerky treats

Employees

Total Employees: 3

  • 2 FT
  • 1 PT
  • All shared with the owner’s non-competing other business

Growth Opportunities

  • Create additional product lines 
  • Work with more distributors 
  • Reach out to additional retailers 
  • Consider big box retail

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 2-year average cash flow was used with a prescribed multiple is 3.16.  With this information, the computation is as follows:

$125,160         x          3.16     =          $395,506

The fair market value found above positions the business list price at $395,000.

Funding Example

Purchase Price:                             $395,000

Buyer Down Payment:                  $250,000

Earn Out:                                        $145,000

Seller earn-out is over three years.

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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