Wireless Communication Installation and Maintenance
As a national contractor for the largest wireless companies in the United States, this experienced and knowledgeable company is a leader in wireless communication installation and maintenance. 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. Maintenance can include repairing facilities, lighting, or controlling pests, while service includes technology fixes, upgrades, installations, and service solutions. Projects include installing and maintaining DAS for stadiums and upgrading LTE so that wireless services work better.
With an efficient, well-trained, and dedicated workforce, this company has its main location in the St. Louis area, as well as a secondary warehouse in the Kansas City area. While able to provide national service, this company currently focuses on projects located in Missouri, Kansas, and Illinois.
This company is well-positioned to grow as large as one’s vision allows for. With wireless technology ever expanding, this company could acquire additional staff to expand current operations or could focus on expanding into new areas such as civil projects. There are two current owners whose duties can be replaced by current staff or one additional resource.
- Year Established: 2005
- Location: St. Louis area with a secondary location in Kansas City
- Service Area: National with a focus on Missouri, Kansas, Illinois
- Clients: Large Telecom Companies i.e. Verizon, AT&T
- Services: Wireless communication installation and maintenance of cell sites, not cell towers
- Building: Co-occupied space: 10,000 sq. ft., 9 offices, break room, meeting room, warehouse (rack and open storage), lease through 4.2022
- Reason for Selling: New ventures
- Employees: 21: Operations Manager (1), DAS Manager (1), Small Cell Specialist (1), Kansas City Specialty Projects Manager (1), Installers (17)
- Seller Training Period: 90 days transition
- Growth Opportunities: Add employees to increase capacity, expand into civil projects
- Current Owner’s Responsibilities: Owner 1: Business development, financial management, HR Owner 2: Project and inventory oversight
- List Price: $9,900,000
- Gross Sales:
- 2017: $6,089,904
- 2016: $3,988,327
- 2015: $4,437,715
- Cash Flow:
- 2017: $2,118,260
- 2016: $644,180
- 2015: $1,814,036
- Assets Included in Purchase*
- Equipment: Pin-testers, tools, forklift
- Vehicles: 4 trucks, 1 van
- Inventory: Ordered per project with little kept on hand
- A/R: $782,332
- Intangible Assets: Highly regarded for quality workmanship, reliable, responsive, long-term relationships with large clients
*amounts may vary
Cash Flow Analysis
|Description of Financial Statement||Tax Return||Tax Return||Tax Return||Tax Return||Notes|
|Net Income Shown on Financial Statement||$1,470,731||$25,109||$1,220,995||$3,237,872|
|Compensation to Owner||$280,678||$265,000||$255,333||$260,000||Owner 1|
|Other unrelated Salaries||$275,431||$264,991||$252,208||$260,000||Owner 2|
|11% Tax on total W2 Salaries||$61,172||$58,299||$55,830||$57,200|
|Meals & Entertainment||$4,317||$4,850||$3,739||$2,080|
|Personal Cell Phone||$2,880||$2,880||$2,880||$2,880||3 lines at $240/month|
|Insurance Premiums for Owners: Life||$300||$300||$300||$300||$25/month|
|Insurance Premiums for Owners: Health & Dental||$22,751||$22,751||$22,751||$22,751||$1,895.92/month|
|Seller's Cash Flow = Total Addbacks + Net Income||$2,118,260||$644,180||$1,814,036||$3,843,083|
|Profit Margin||34.78 %||16.14 %||40.88 %||47.81 %|
Services and Clients
- Large telecommunications companies
- Fixing the physical appearance of cell sites
- Fixing doors, hinges, compartments, covers
- Fixing the facilities
- Lighting, electrical
- Fixing the physical appearance of cell sites
- Installation, repair, and maintenance of technology related to wireless communication
- DAS (Distributive Antenna Solutions)
- LTE servicing
- This company does not do work that includes climbing cell towers.
- Operations Manager (1)
- DAS Manager (1)
- Small Cell Specialist (1)
- Kansas City Specialty Projects Manager (1)
- Installers (17)
- Add employees to increase capacity
- Expand areas of operation
- Increase capacity in Kansas City area
- Expand into civil projects
- Expand into government agencies/projects
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 4.68. With this information, the computation is as follows:
$2,118,260 x 4.68 = $9,913,457
The Fair Market Value found above positions the business List Price at $9,900,000.
Purchase Price: $9,900,000
15% Buyer Down Payment: $1,485,000
20% Seller Financing: $1,980,000
65% Bank Loan: $6,435,000
Seller Financing 6-year term at a rate of 5% equals a monthly loan payment of $31,888.
Bank Loan 8-year term at a rate of 6% equals a monthly loan payment of $84,565.
After business expenses and loan payments, a buyer with a 15% down payment of $1,485,000 would retain a profit of $720,826, which results in a 49% 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 $9,900,000 with the terms listed above, the coverage ratio is 1.52.
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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