44% Profit Margin - Scaffolding Equipment Rental Company
Recurring customer base of 500 customers and over $13M in assets!
With only $1M in capex, this business has over $13M in assets and over $3.5M in work-in-progress and backlog! With a three-year average cash flow of $5,457,808, this company offers top-of-the-line scaffolding equipment to a diverse customer base of 500 customers in the Twin Cities metro area. They currently have 15 recurring clients that include general contractors, concrete & masonry, demolition, and repair and installation contractors. They install, dismantle, rent and sell frame scaffolding, system scaffolding, shoring scaffolding and hydro mobile platforms with 59% of their revenue coming from rentals.
They are on average 70% utilized with about $9.9M in inventory out for rentals on a monthly basis. With $3.9M in hydro mobile inventory (70 – 75 units) they are far ahead of their competitors who only have 1-3 units of a competing brand. They also offer 3D drawings on more complex projects which differentiates them in the market. This company does little to no marketing or advertising because they have recurring clients due to their top-notch customer service, delivery options and the quality of indoor and outdoor scaffolding. This business has a sister company (23% of revenue) that is Union based. Their current building space is 50,000 square feet with 3,000 square feet being the office building and 47,000 square feet of warehouse. There is also 1.2 acres yard for outside storage.
In any given month, they have around 150 work orders and their large projects that go for longer than on year are greater than $1M in value. Assets include almost $11M in scaffolding inventory and $1.6M in vehicles like trucks (5), 27-foot straight trucks, one-ton truck (1), pickups (20). Their current backlog of projects is about $3.5M and they are over $13M sales for 2020. At any given time, they have anywhere from 45 – 60 employees with 21 of them being office workers like sales representatives, office managers and the rest being laborers and contractors. Two of the owners focus primarily on sales and the third owner manages day to day business but they are currently transitioning responsibilities to other employees.Priced at $23,250,000, this is a business that is positioned to grow in the scaffolding space through acquisition of more inventory and expansion into different cities.
- Year Established: 2007
- Location: Minneapolis Metro area
- Service Area: Twin cities metro and upper Midwest
- Services: Install, dismantle, rent, sell frame scaffolding, system scaffolding, Shoring Scaffolding and Hydro mobile platforms
- Revenue Break Down: 59% Rentals and 41% Install, dismantle and sales
- Clients: 500 clients customer base with 15 recurring clients. Ex: General contractors, concrete & masonry, demolition, repair and installation contractors
- Buildings:50,000 square feet space – 3,000 square feet is office building; 47,000 square feet is warehouse and 1.2 acres yard for outside storage.
- Reason for Selling:Retirement
- Personnel: 45 to 60 employees depending on the season. 21 employees who work in office and yard and ~ 25 - 40 laborers/contractors throughout the year.
- Seller Training Period: 1 – 4 years
- Growth Opportunities: Expansion into other cities
- Current Owners’ Responsibilities: Owners primarily work in sales and oversight of day-to-day business. Currently transitioning roles to other employees
List Price: $23,250,000
- 3-yr. Ave. Cashflow (’18 –’20): $5,457,808
- Profit Margin: 44%
- Machinery & Equipment: $634,741 - Ladders
- Vehicles: $1,578,432 - Flatbed trucks (5), 27-foot straight trucks, one-ton truck (1), pickups (20)
- Furniture & Fixtures: $41,090
- Inventory / Rental Equipment: ~$11,000,000
- Buildings: $2,215,416 - 50,000 square feet warehouse
- Land: $371,328
- Capital Expenditure: ~ $1,000,000
*amounts may vary, assets may be depreciated, replacement cost, or fair market value
|Description of Financial Statement||P&L Statement|
|Net Income Shown on Financial Statement||$1,657,297||$1,861,398|
|Compensation to Owner||$973,600||$1,608,339|
|11% Tax on total W2 Salaries||$107,096||$176,917|
|Seller's Cash Flow = Total Addbacks + Net Income||$4,626,810||$6,759,560|
|Profit Margin||33.33 %||44.32 %|
- Gross sales in 2020 is $13,883,263, down 9% from 2019 due to COVID-19. In spite of that they still have a current backlog of $3.5M of projects.
This company has anywhere from 45 to 60 employees depending on the season.
They have 21 employees who work in office and yard and ~ 25 0 40 laborers/contractors during the year.
- Owners (3)
- 21 employees; 12 in office 9 in yard/ shop
- Sales representatives (4)
- Draftsman (draws scaffolding)
- Office Manager
- 11 in shop
- Drivers, mechanics, (11)
- Laborers and contractors
- 25 in the Winter
- 40 in the Summer
This company has a customer base of ~500 customers.
They provide services to office buildings, schools, churches, power plants, municipal buildings and theaters.
- Existing customers call them for rentals
- They have contracts only on installations and dismantles
- The concrete and masonry firms just call them for projects
This business installs, dismantles, rents and sells frame scaffolding, system scaffolding, shoring scaffolding and hydro mobile platforms.
|Service||% of Projects||% of Revenue|
|Rentals of the different scaffolding and Hydro Mobile platforms||77%||59%|
|Erection, dismantle, sales||23%||41%|
This company can can grow by expanding their work out of the twin cities metro area as well as increasing their inventory and employees.
The areas below are opportunities for growth;
- Swing stage rental
- Sales and installation
- Construction equipment rentals
- Sales e.g. Grout hog, mixers, The Mule robotic block laying tool etc.
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: $
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Total Business Assets, Inventory, and A/R: $
Total Undercollateralized Loan: $
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Fixed Charge Coverage Ratio
The bank will require a minimum ratio of 1.5 to be lendable.
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Buyer's Net Operating Income (NOI)
The amount of money the Buyer will retain as profit.
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