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Below Ground Sampling for Environmental Consultants

Soil and groundwater services & well installation and abandonment!

CASH FLOW
$375,167

Specifications

  • Price
    $1,475,000

  • Revenue
    $1,232,005

  • Profit Margin
    32%

  • Location
    Chicagoland, with satellite in Cincinnati

  • Employees
    7: 5 FT, 1 PT, 1 FT 1099

  • Reason for Sale
    Retirement

  • Equipment
    $614,694

  • Lease
    3,000 sq. ft.: 60x70 steel frame building with office & shop, 3 overhead doors with indoor parking

  • Service Area
    Work is mainly completed in Illinois and Indiana

Providing environmental services in groundwater, soil, soil vapor, well installation and abandonment, and being principally located in the Chicagoland area, this professional environmental drilling company has been providing expert soil and water evaluation services since 1996.  The owner spends less than 15% of his time in the field and this can be easily absorbed by current employees. They have completed projects in 27 states, but typically focus their efforts on acquiring work in the Heartland, specifically Illinois and Indiana. When an environmental consultant needs subsurface samples, this team of seven drives to the site (7 trucks & 5 trailers included), drills the sample, and provides a workspace for an outside consultant to do their testing. 

Currently, this company does not do any in-house sample testing, they simply collect the sample and provide it to the environmental consultant.  Adding an analyst, however, is an area for growth that could potentially bring in additional projects.  Additional areas of growth can be found in geotechnical drilling as well as maximizing utilization and assets.

  • No professional license or industry expertise required to operate this business.
  • Current space is perfectly suited for the business and leaves plenty of room for expansion.
  • Purchase includes $841,489worth of equipment such as specialty drilling rigs and geoprobe tools
  • Great potential for growth without increasing overhead.

 

Business Highlights

  • Revenue: $1,232,005
  • Cash Flow: $375,167
  • Year Established: 1996
  • Headquarters:  Chicagoland, with satellite in Cincinnati
  • Service Area:  Work is mostly completed in Illinois and Indiana
  • Clients: Environmental consultants, commercial property owners, realtors and bankers
  • Services: Subsurface sampling for environmental testing: groundwater, soil, soil vapor, well installation and abandonment
  • Building: 3,000 sq. ft.: Steel frame building with office & shop, 3 overhead doors with indoor parking
  • Reason for Selling: Retirement
  • Employees: 7:  5 FT, 1 PT, 1 FT 1099
  • Seller Training Period: 1 year
  • Growth Opportunities: Build in-house analytics, maximize utilization, add geotechnical services, quarterly ground water monitoring, NPDES sampling
  • Current Owner’s Responsibilities: Owner spends less than 15% of his time in the field- this can be easily absorbed

Employees

Total Employees: 7

  • 5 Full-time
    • Operators
    • Maintenance
    • Bidding
    • HR
    • Marketing
  • 1 - FT 1099 Contractor
    • Operators
    • Maintenance
    • Bidding
    • HR
    • Marketing
  • 1 Part-time
    • Bookkeeping
    • As needed assistance

None of the employees need specialized degrees to do their work. The company provides extensive on-the-job training, and the field works have between 2-15 years of experience.

Prior experience is not necessary because this company prides itself on being able to train anyone.

Service Area

This company has completed work in 27 states.  They can work in most mainland states where they can obtain the required licensing or where there are no requirements.  This team will travel wherever the client pays them to go!  Historically, most projects are completed in the following states:

  • Illinois
  • Indiana
  • Iowa
  • Kentucky
  • Michigan
  • Missouri
  • Ohio
  • Pennsylvania
  • Tennessee
  • Wisconsin
  • West Virginia

Operations

Services:

  • Subsurface sampling for environmental testing
    • Groundwater
    • Soil
    • Soil vapor
  • Shallow and small diameter monitoring well installation and abandonment services
  • On-Site Analytical:
    • EPA Method 8260 (VOCs, VPH, and GRO)
    • EPA Method 8270 (PNAs, BNAs, EPH, and DRO)
    • EPA Method 8082 (PCBs)
    • EPA Method 8081 (Pesticides)
    • EPA Method 8095 (Explosives)
    • EPA Method 7473 (Mercury)
    • EPA Method 6020/6010 (Metals)

The largest project was $70,000.

Clients

Typical clientele includes:

  1. Environmental consultants
  2. Commercial property owners

The company's main clients are environmental consultants who are doing work for property owner or a prospective property owner. With new regulatory and compliance issues, many banks will not loan or foreclose on a property without performing an environmental test. Tests are also required before new construction or erecting cell-phone towers. Those owners hire environmental consultants, and the consultants hire this company to drill out the samples for analysis.

This company has a wide customer base and most of it is repeat business. They worked with over 150 different customers in 2019, and they are all diverse. The company’s largest customer only generates about 8% of the company’s work.

Financial Highlights

  • List Price: $1,475,000
  • Avg. Revenue per Job: $20,000 - $30,000
  • Cash Flow: $339,145

Assets

  • Assets: $841,489
  • Vehicles:  $435,756
  • Furniture & Fixtures: $11,527
  • Equipment: $178,938
  • Website: $13,976
  • A/R: $201,292

* 57% Collateralized *

 

*See additional asset information in the attachments

Cash Flow Analysis

Description of Financial StatementP&L Statement
Jan-Sept
Tax ReturnTax ReturnNotes
202020192018
GROSS SALES$821,337$1,169,620$1,094,010
Net Income Shown on Financial Statement$145,652$178,871$32,471
ADDBACKS
Compensation to Owner with Tax$44,473$46,584$41,070
Depreciation$12,321$37,886$98,318
Interest$13,691$20,881$18,645
Meals & Entertainment & Travel$384$18,506$18,571Personal expense
Contributions/Donations and Gifts$200$150$4,804Non-onward going expense
Health and Life Insurance$26,337$33,231$29,863Personal expense
Cell Phone$659$3,589$2,245Personal expense
Vehicle/Auto, Fuel, Insurance$10,719$19,291$20,737Personal expense
Condo$8,348$14,395$4,644Personal expense
Retirement Contribution$0$1,110$1,110Paid to owner
Rent to Owner$26,337$29,771$38,695Personal expense
GM to Replace$-46,666$-70,000$-70,000
Building Repairs$1,353$4,313$0
Dues$0$715$0
Home Office $366$13,396$0
Back Returns $0$6,061$0
2019 Buildout $185$12,478$0
Generator for Truck $0$3,952$0
Engine in Geoprobes $10,000$0$0
TOTAL ADDBACKS$108,707$196,309$208,702
Seller's Cash Flow = Total Addbacks + Net Income$254,359$375,180$241,173
Profit Margin30.97 %32.08 %22.03 %
  • 32% profit margin in 2019
  • Seller is currently running personal expenses through the company. Those expenses, along with one-time expenses have been added back to show true profitability
  • Once personal expenses are accounted for, this company has consistently seen over 20% profit margins

Valuation

Funding Example

Purchase Price:

$1,475,000

$
%
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:
2 year avg Cash Flow
$
Annual Debt Service: $
RATIO:

Buyer's Net Operating Income (NOI)

The amount of money the Buyer will retain as profit.

Cash Flow:
2 year avg 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 is not a real estate brokerage and therefore the staff will not handle any aspect of the lease, sale or purchase of real estate.