Opportunities
Commercial Roofing in PA – 90 Employees
Over $14.3M in sales in 2020!
Specifications
With over $14.3M in sales in 2020, this commercial roofing company has 90 W2 employees in place! Established for over 20 years and with 100% commercial clients, their focus is on larger industrial and institutional projects; project size ranges from $75k to $3.75M. Offering reroofing (50% of their revenue) new construction (40%) and repair & maintenance (10%) within a 75-mile radius of Pittsburgh, this team of 90 employees is comprised of 75 craftsmen and sheet metal workers, along with 15 salaried support staff. The company subs out only as needed based on project size and ancillary services in the contract. Their clientele is a diverse assortment of consultants, general contractors, and private owners; this business is highly sought after in the greater Pittsburgh region. Revenue reached over $14.3M in 2020, and 2021 is looking highly profitable, with over $16M already in their backlog. With over $9M in assets, the bank loan is over 70% collateralized.
The company is a mixture of union and non-union, with the union side making up 80% of their total sales and 60% of their current projects. Generally, they are the largest employer on a month-to-month basis in the union, they employ an average of 44 roofers and 15 sheet metal workers per day with a fairly even split of new construction vs. renovation, and mostly in the public sector. There are a large number of institutions in the area that require union members to perform their projects. The non-union side is more in the private sector, with 80% of their revenue comprised of new construction.
Priced at $12,250,000, this business is in a prime position for growth. Pursuing more maintenance work and roofing-related sheet metal projects would certainly increase revenue. With already long-standing client relationships in place, organic growth is inevitable if services are expanded.
Business Highlights
Year Established: 1999
Location: Pittsburgh, Pennsylvania
Service Area: Within 75-mile radius of Pittsburgh
Services: 50% reroofing, 40% new construction, 10% repair & maintenance
Clients: 100% commercial: Consultants, General Contractors, private owners
Building: 12,500 sq. ft. building, 5,800 of which is office space, all on 3.4 acres
Reason for Selling: Other endeavors
Personnel: 90 W2 Employees: 15 salaried support staff + 75 hourly craftsmen & sheet metal workers; subcontractors used as needed for ancillary work (95% is self-performed)
Seller Training Period: 6-12 months
Growth Opportunities: Pursue more roof maintenance projects as well roofing-related sheet metal projects (coping, gutters, downspouts, etc.)
Current Owners’ Responsibilities: Owner 1: Operations Management, Estimating, Accounting; Owner 2: day-to-day operations; Owner 3: Absentee
Cash Flow Analysis
| Description of Financial Statement | P&L Statement Combined Income Statement | P&L Statement Combined Income Statement | P&L Statement Combined Financial Statements | Notes |
| 2020 | 2019 | 2018 | ||
| GROSS SALES | $14,328,705 | $18,610,635 | $14,762,162 | |
| Net Income Shown on Financial Statement | $1,888,473 | $2,308,425 | $572,373 | |
| ADDBACKS | ||||
| Depreciation | $70,019 | $49,964 | $45,282 | |
| Interest | $215 | $9,643 | $41,724 | |
| Auto Expense | $60,000 | $60,000 | $60,000 | $5,000/month |
| Pension | $43,238 | $54,719 | $49,840 | 401k matching at $17,238/year and bonus of $26k/year |
| Dues | $19,937 | $23,439 | $22,401 | $2,500/month - golf |
| Life Insurance | $15,900 | $15,900 | $15,900 | $5,300/year for 3 Life & Disability policies |
| Meals & Entertainment | $64,465 | $96,078 | $109,258 | |
| Rent | $-1,527 | $3,152 | $1,133 | $13,500/month onward going - owns real estate |
| Donations | $1,300 | $910 | $1,473 | |
| Owners' Wages | $431,000 | $431,000 | $431,000 | |
| 11% Tax on Owners' Wages | $47,410 | $47,410 | $47,410 | |
| Retirement Savings Plan | $53,633 | $54,719 | $0 | |
| Retain/Replace | $-80,000 | $-80,000 | $-80,000 | |
| TOTAL ADDBACKS | $725,590 | $766,934 | $745,421 | |
| Seller's Cash Flow = Total Addbacks + Net Income | $2,614,063 | $3,075,359 | $1,317,794 | |
| Profit Margin | 18.23 % | 16.51 % | 8.93 % |
- 2020 Profit Margin: 18%
Financial Highlights
- List Price: $12,250,000
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 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 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
| Document Title / Description |
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