Return To Opportunities List

Opportunities

Construction Management w/ 25 Staff

Well-established for over 40 years!

CASH FLOW
$829,964

Specifications

  • Price
    $3,300,000

  • Revenue
    $9,548,634

  • Cash Flow
    $829,964

  • Location
    Southeast Pennsylvania

  • Service Area
    Primarily within 50-mile radius of Reading, PA

  • Intangible Assets
    Large number of repeat customers and word-of-mouth referrals

  • Equipment
    Equipment: 1 skid loader: $18,550 Vehicles: 18 trucks: $538,869; 4 passenger vehicles: $202,889

  • Employees
    24 FT + 2 PT: 2 Owners, 5 Project Managers, 17 FT office staff, field employees, & carpenters, 1 PT admin, 1 PT summer staff

  • Reason for Sale
    Approaching retirement

This general contracting & construction management company has been well-established for over 40 years in Southeastern Pennsylvania! Serving primarily within a 50-mile radius of Reading, the highly skilled team of 26 people offers a vast array of services to their loyal clientele and are known for exceeding customer expectations. They offer pre-construction services (site analysis/selection, project budget development, project planning & scheduling, land development coordination, etc.), along with complete construction management services, and post-occupancy follow-up and maintenance contracts, making sure each project is guided from beginning to end.  Their clientele is comprised of municipal, industrial, educational, healthcare, and general commercial.

 

The company’s staff works out of a leased 26,000 sq. foot industrial building, which includes 18,500 sq. ft. of warehouse, storage, and woodshop area. Along with the 2 owners, who oversee daily operations, office management, and accounting, the team consists of 5 Project Managers and 17 full-time office staff, field employees, and carpenters. One owner is a registered architect, and 3 on staff are certified healthcare constructors.  18 trucks, 4 passenger vehicles, and a skid loader make up $760k in assets.

 

With sizable number of repeat customers and a solid reputation in place, this business is in a prime position for growth. Increasing advertising would capture more market share and would expand this company’s footprint far and wide.

Business Highlights

  • Year Established: 1977
  • Location:  Reading, Pennsylvania
  • Service Area:  Primarily within 50-mile radius of Reading, PA
  • Services: General contracting, construction management, post-construction services
  • Clients: Municipal, Industrial, Educational, Healthcare, General Commercial 
  • Certifications: 1 owner is a registered architect, 3 on staff are certified healthcare constructors
  • Lease: 26,000 sq. ft. industrial building; 7,500 sq. ft. area for offices, 18,500 sq. ft. for warehouse, storage, woodshop
  • Reason for Selling: Approaching retirement
  • Personnel: 24 FT + 2 PT: 2 Owners, 5 Project Managers, 17 FT office staff, field employees, & carpenters, 1 PT admin, 1 PT summer staff
  • Seller Training Period: 3-5 years if desired
  • Growth Opportunities: Expand advertising efforts to increase market share
    • Current Owners’ Responsibilities: Owner 1: President, oversees daily operations; Owner 2: Office Manager, Accounting:

    Financial Highlights

    • List Price: $3,300,000
    • Gross Sales:
      • 2020: $9,548,634 Annualized
      • 2019: $8,156,258
    • Cash Flow:
      • 2020: $829,964 Annualized
      • 2019: $746,525
    • Assets Included in Purchase*
    • Equipment: 1 skid loader: $18,550
    • Vehicles: 18 trucks: $538,869; 4 passenger vehicles: $202,889
    • Secured Work: $12.7M in signed contracts
    • Average Sale Size: $47,721
    • Intangible Assets:  Large number of repeat customers and word-of-mouth referrals

    *amounts may vary, assets may be depreciated, replacement cost, or fair market value 

    Cash Flow Analysis

    Description of Financial StatementP&L Statement
    August 2019-March 2020
    P&L Statement
    August 2018-March 2019
    Tax Return
    Accrual
    Tax Return
    Accrual
    Tax Return
    Accrual
    Notes
    20202019201920182017
    GROSS SALES$6,365,756$4,702,476$8,156,258$20,153,290$12,874,050
    Net Income Shown on Financial Statement$137,677$46,583$161,553$20,153,290$194,303
    ADDBACKS
    Compensation to Owner$149,942$149,942$224,913$396,715$342,940Owner 1
    Other Unrelated Salaries$187,662$187,662$281,494$447,715$294,940Owner 2
    11% Tax on total W2 Salaries$37,136$37,136$55,705$92,887$70,167
    Depreciation$89,113$74,057$99,600$104,368$134,817
    Interest$1,005$1,239$2,054$1,578$1,220
    Contributions$15,270$21,100$17,950$6,628$23,724
    Replacement 1$-73,333$-73,333$-110,000$-110,000$-110,000Owner 2
    Replacement 2$-43,333$-43,333$-65,000$-65,000$-65,000Owner 1
    Owner's Life Insurance$20,000$20,000$30,000$30,000$30,000$15k per owner
    Owner's Auto Lease$18,666$18,666$28,000$28,000$28,000$14k per owner
    401k - Owner 1$5,998$5,998$8,997$15,869$13,7184% Owner 1
    401k - Owner 2$7,506$7,506$11,260$17,909$11,7984% Owner 2
    TOTAL ADDBACKS$415,632$406,640$584,973$966,669$776,324
    Seller's Cash Flow = Total Addbacks + Net Income$553,309$453,223$746,526$21,119,959$970,627
    Profit Margin8.68 %9.64 %9.15 %104.80 %7.54 %
    • Profit Margin: 9%

    Services

    • General Contractor
    • Construction Management
    • Post-Construction Services

    Personnel

    • 2 Owners
      • Owner 1: President, oversees daily operations of the business
      • Owner 2: Office Manager, Accounting Management
    • 5 Project Managers
    • 17 Office Staff, Field Employees, Carpenters
    • 1 PT Admin Staff
    • 1 PT Summer Staff

    Growth Opportunities

    • Expand advertising efforts to increase market share

    Funding Example

    Purchase Price:                          $3,300,000

       12.5%Buyer Down Payment:      $412,500

       12.5%Seller Financing:               $412,500

    75%Bank Loan:                      $2,475,000

    Seller financing 5-year term at a rate of 4.50% equals a monthly loan payment of $7,690.

    Bank loan 10-year term at a rate of 6% equals a monthly loan payment of $27,478.

    After business expenses and loan payments, a buyer with a 12.5% down payment of $412,500 would retain a profit of $366,231, which results in a 88% return on investment in the first year.

    A lender is required to have a minimum 1.25 coverage ratio for any business loans extended. At a proposed purchase price of $3,300,000 with the terms listed above, the coverage ratio is 1.87.

    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. 

    *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.

    Attachments

    Document Title / Description

    This folder is empty.

    Access to this Deal Room is restricted

    Would you like to access the deal room?

    Yes, please

    Interested in
    this business?

    Complete the following information to sign an NDA and see more details!

    Already have an account? Log in here.

    Click to download NDA form

    Print, sign and send to:

    210 N 78th St. 2nd Floor
    Omaha, NE 68114

    Or fax to:

    f 402.939.0857

    Thinking of Selling?
    When selecting an M&A firm, please use the following Scorecard: click here for our M&A Scorecard


    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.