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Telecommunications Service and Installation

CASH FLOW
$2,704,810

Specifications

  • Price
    $12,000,000

  • Revenue
    $9,839,479

  • Account Receivable
    $1,750,000

  • Profit Margin
    27%

  • Location
    St. Louis area and Kansas City area

  • Service Area
    National with a focus on Missouri, Kansas, Illinois

  • Equipment
    $400,000

  • Inventory
    Ordered per project

  • Reason for Sale
    New ventures

  • Lease
    21,000 sq. ft., 9 offices (2,500 sq. ft.), meeting room, warehouse, lease through 4.2022

  • Intangible Assets
    Highly regarded for quality workmanship, reliable, responsive, long-term relationships with clients, knowledgeable staff

  • Employees
    45: Operations Manager (1), DAS Manager (1), Small Cell Specialist (1), Kansas City Specialty Projects Manager (1), Installers (17), Project Manager (2), Foremen (6), field employees (14), Administrative Assistants (2)

Working with all major telecom carries, this experienced and knowledgeable team leads in wireless communication installation and maintenance.  Originally one company, but now two, this combined listing is an opportunity to own a business that offers comprehensive telecommunications services from the ability to work on cell towers from top to bottom, to stadium DAS services.   With a concentration on cell tower facilities, this business offers high-quality maintenance and service for everything from repairing a broken hinge to upgrading technology.  With an additional specialty in cell tower work, these climbers are OSHA certified, well-trained, and very knowledgeable.  Certified electricians are also a part of this dynamic team and are able to address the complex electrical needs surrounding telecommunications work. 

 

Occupying a 21,000 square-foot space in the St. Louis area, the facility has 9 offices, a meeting room, break room, and a large warehouse with rack and open storage.  A secondary warehouse in the Kansas City area is also utilized as a secondary base of operations.  While able to provide national service, work is currently focused on projects located in Missouri, Kansas, and Illinois.

 

Well-positioned to grow as large as one’s vision allows for, and with wireless technology ever expanding, a new owner could expand current operations or focus on branching out into new areas such as civil and government projects.  There are three current owners.  Duties for two can be replaced by current staff or one additional resource.  The owners do not do field work. 

Business Highlights

  • Year Established: 2005
  • Location:  St. Louis area and Kansas City area
  • Service Area: National with a focus on Missouri, Kansas, Illinois
  • Services: Wireless communication installation and maintenance, new construction, modifications, repairs, maintenance, and cell tower work
  • Clients: Large Telecom Companies i.e. Verizon, AT&T
  • Building: 21,000 sq. ft., 9 offices (2,500 sq. ft.), meeting room, warehouse, lease through 4.2022
  • Reason for Selling: New ventures
  • Employees: 45: Operations Manager (1), DAS Manager (1), Small Cell Specialist (1), Kansas City Specialty Projects Manager (1), Installers (17), Project Manager (2), Foremen (6), field employees (14), Administrative Assistants (2)
  • Seller Training Period: 90 days transition
  • Growth Opportunities: Add employees to increase capacity, expand into civil projects
  • Current Owner’s Responsibilities: Owner 1: HR, business and financial management; Owner 2: Project and inventory oversight; Owner 3: Daily operations and project management

Financial Highlights

  • List Price: $12,000,000
  • Gross Sales:
    • 2017: $9,839,479
    • 2016: $6,784,519
    • 2015: $7,714,119
    • 2014: $10,251,174
  • Cash Flow:
    • 2017: $2,704,810
    • 2016: $397,391
    • 2015: $2,555,603
    • 2014: $4,181,043
  • Assets Included in Purchase*
    • Equipment: $150,000: Tools, forklift, hoists, testers
    • Vehicles:  $250,000: 11 vehicles, 6 trailers
    • Inventory: Ordered per project
    • A/R: 1,750,000                                
    • Intangible Assets: Highly regarded for quality workmanship, reliable, responsive, long-term relationships with clients, knowledgeable staff

*amounts may vary

Cash Flow Analysis

  • Fluctuation in sales can be attributed to changing workloads for the carriers as well as reduced RFPs.  There were also lags in available equipment that impacted sales. 
  • 2014 cash flow is in the full Cash Flow Analysis located in the Attachments as well as in the Deal Room

Services and Clients

Clients include:

  • Large telecommunications companies

 

Services include:

  • Installation, repair, and maintenance of technology related to wireless communication
  • DAS (Distributive Antenna Solutions)
    • Arenas
  • LTE servicing
  • This company does not do work that includes climbing cell towers.
  • Maintenance
    • Fixing the physical appearance of cell sites
      • Fixing doors, hinges, compartments, covers
    • Fixing the facilities
      • Lighting, electrical
    • Fixing the health of the area
      • Pest control
  • Antenna and line repair (new and replacement)
  • Work on new build cell towers and facilities (This business does not build cell towers.)
  • Maintain, repair, or replace macro equipment on the ground
  • Power plant batteries
  • Low voltage electrical work
  • Install and upgrade conduits
  • Custom equipment
  • 24-hour trouble shooting and emergency services

Specific information regarding clients is available upon the receipt of a signed Non-Disclosure Agreement.

Employees

Employees: 45

  • Operations Manager (1)
  • DAS Manager (1)
  • Small Cell Specialist (1)
  • Kansas City Specialty Projects Manager (1)
  • Installers (17)
  • Project Manager (2)
  • Foremen (6)
  • Field Employees (14)
  • Administrative Assistants (2)

Growth Opportunities

  • Expand capacity by increasing the team 
  • Expand areas of operation 
  • Increase capacity in Kansas City area 
  • Expand into civil projects 
  • Expand into government agencies/projects 
  • Increase tower crews 
  • Expand into additional electrical work 
  • Expand operations from location in Kansas City to increase work there

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 2017 Cash Flow was used with a prescribed multiple is 4.44.  With this information, the computation is as follows:

$2,704,810      x          4.44     =          $12,009,356

The Fair Market Value found above positions the business List Price at $12,000,000.

Funding Example

Purchase Price:                              $12,000,000

15%Buyer Down Payment:             $1,800,000

15%Seller Financing:                      $1,800,000

70%Bank Loan:                                $8,400,000

Seller Financing 6-year term at a rate of 4.50% equals a monthly loan payment of $28,573.

Bank Loan 10-year term at a rate of 6% equals a monthly loan payment of $93,257.

After business expenses and loan payments, a buyer with a 15% down payment of $1,800,000 would retain a profit of $1,242,844, which results in a 69% 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 $12,000,000 with the terms listed above, the coverage ratio is 1.85. 

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. 

Purchase Price:

$12,000,000

$
%
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:
2017 Cash Flow
$
Annual Debt Service: $
RATIO:

Buyer's Net Operating Income (NOI)

The amount of money the Buyer will retain as profit.

Cash Flow:
2017 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: %

Attachments

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210 N 78th St. 2nd Floor
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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.