Opportunities
$1.5M in Assets at Design, Engineering, and Manufacturing Company
Based in Chicago with a loyal national client base!
Specifications
There are over $1.5M in assets at this design, engineering, and manufacturing company! They are well established in the Chicago area but have loyal customers nationwide. With $1.5M in sales and a 36% profit margin, the company specializes in the design, engineering, and manufacturing of hot runner systems and components for mold making and thermoplastic processing plants. After designing and engineering the custom hot runner system to fit their customers’ plastic injection molding system, they manufacture the system on-site, assuring quality control and reduced cost to their clients. They also have the capability to retrofit existing molds; they can repair or re-configure a system, replace heaters, nozzles, and other components, and they can troubleshoot leaks, heating issues, and flow problems. All of these services contribute to their long-standing client relationships and solid reputation in the market for over 35 years. Their diverse client base consists of mold makers and processing plants for consumer goods in categories such as medical, automotive, cosmetics, caps & closures, consumer electronics, and pet products. Their customers design the product, manufacture it through 3D printing, and gives them the specs; this team then designs the custom hot runner system needed to fit their needs and requirements.
The highly skilled and experienced team includes the Owner (President/Treasurer), as well as a Design Engineer/Project Manager, 3 Machine Operators, 1 in Assembly, 1 Office Manager, and 1 Financial Officer. The owner currently handles general oversight of the business and team as well as some of the engineering; the Design Engineer/Project Manager handles all design engineering for the hot runner systems and manages each project from beginning to end.
Priced at $2,050,000, this company certainly has the potential to go global! An existing hot runner system company could take this business to the next level by using the 25 patented products, the team’s experience, and the customers already in place and expanding. A mold maker could also expand their business by purchasing this company, which would complement their services and products.
Business Highlights
Year Established: 1984
Location: Chicago, Illinois
Service Area: Nationwide
Services: Design, engineering, and manufacturing of precision hot runner systems and components
Clients: Mold making and thermoplastic processing companies
Lease: 12k sq. ft. facility: 3k is office space, the rest is manufacturing and warehouse space; $11k/month
Reason for Selling: Retirement planning
Personnel: 8: 1 Owner (President/Treasurer), 1 Design Engineer/Project Manager, 3 Machine Operators , 1 in Assembly, 1 Office Manager, 1 Financial Officer/HR
Seller Training Period: 2 years
Growth Opportunities: Great opportunity for an existing hot runner system company to expand by using this company’s experience and customers; a mold maker could also expand their business by purchasing this company, which would complement their services & products
Current Owner’s Responsibilities: General Oversight of the business, occasionally assists the other engineer on staff.Financial Highlights
- List Price: $2,050,000
- 2020-2021 Average Cash Flow: $547,161
- A/R: $200,972
*amounts may vary
Assets
- Assets: $1,524,700
- Machinery & Equipment: $1,426,779
- Vehicles: $9,795
- Furniture, Fixtures, Software: Inventory: $88,126
- Intangible: Solid reputation in the market, long-standing client relationships
* Over 65% Collateralized *
Cash Flow Analysis
| Description of Financial Statement | Notes |
| GROSS SALES | |
| Annualized | |
| Net Income Shown on Financial Statement | 2021 adjusted for PPP |
| ADDBACKS | |
| Compensation to Owner | |
| 11% Tax on total W2 Salaries | |
| Depreciation | |
| Interest | |
| Health Insurance | For personal health insurance |
| Simple IRA | Personal expense |
| Gifts | Non-onward going expense |
| Replacement | To replace owner's spouse as HR/Payroll |
| Donations | |
| TOTAL ADDBACKS | |
| Seller's Cash Flow = Total Addbacks + Net Income | |
| Annualized | |
| Profit Margin |
.
Valuation
Funding Example
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: 2020-2021 Average Cash Flow |
$ |
| Annual Debt Service: | $ |
| RATIO: |
Buyer's Net Operating Income (NOI)
The amount of money the Buyer will retain as profit.
|
Cash Flow: 2020-2021 Average 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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