Return To Opportunities List

Opportunities

Design & Construction Support for Civil Infrastructure Projects

Well-known in the region with strong recurring client base!

CASH FLOW
$478,488

Specifications

  • Price
    $1,540,000

  • Revenue
    $1,602,106

  • Cash Flow
    $478,488

  • Location
    Seattle, Washington

  • Service Area
    Primarily throughout Washington & Alaska

  • Reason for Sale
    Exploring options

  • Employees
    11: 1 Owner (Project Engineer), 1 PT Professional Land Surveyor. 1 Engineer-in-Training, 4 Surveyors, 2 CAD Technicians, 1 PT Structural Engineer, 1 Office Manager

  • Intangible Assets
    Strong recurring client base, well-known in the industry, long-standing reputation

  • Profit Margin
    34%

This Washington engineering firm is well-known in the region with a strong recurring client base! Established almost 15 years ago in the Seattle area, this firm is licensed in Washington, Oregon, and Alaska, as well as having DBE, SBE, and MBE certification. Services include civil engineering, surveying, planning, design, permitting, and construction management in the public and private sector. Along with providing all civil aspects of design and construction, the company also conducts value engineering studies, involving a team of multiple disciplines that dissect a project and provide input on how to improve the function and cost; this service has proven to be indispensable in the industry. 

 

The highly skilled team of 11 is based out of a 1,600 sq. ft. office building and includes the owner, who is a Project Engineer, 1 PT Professional Land Surveyor, 1 Engineer-in-Training, 4 Surveyors, 2 CAD Technicians, 1 PT Structural Engineer, and 1 Office Manager. Assets are comprised of survey equipment, digital levels, total stations, scanners, high-end computers, and a multitude of top-notch engineering software including MicroStation, InRoads, Civil 3D, and Leica Geosystems.

 

This firm has a long-standing reputation in the area with substantial connections with several important projects. Continuing to build these relationships and engage in large projects will certainly lead to an increased client base and growth in revenue.

Business Highlights

  • Year Established: 2006
  • Location:  Seattle, Washington
  • Service Area:  Primarily throughout Washington & Alaska
  • Services: Civil engineering, surveying, planning, design, permitting, and construction management
  • Clients: Residential, commercial, educational, institutional, large engineering & design firms
  • Certifications: DBE / SBE / MBE certified
  • Lease: 1,600 sq. ft. office building
  • Reason for Selling: Exploring options
  • Personnel: 11: 1 Owner (Project Engineer), 1 PT Professional Land Surveyor. 1 Engineer-in-Training, 4 Surveyors, 2 CAD Technicians, 1 PT Structural Engineer, 1 Office Manager
  • Seller Training Period: 1-2 years, if desired
  • Growth Opportunities: Continue to connect and engage in important projects in the area
  • Current Owner’s Responsibilities: Overall firm management, public relations, design elements, marketing

Financial Highlights

  • List Price: $1,540,000
  • Gross Sales:
    • 2020: $1,602,106 Annualized
    • 2019: $1,330,905
    • 2018: $1,352,918
  • Cash Flow:
    • 2020: $478,488 Annualized
    • 2019: $452,632
    • 2018: $394,683
    • 2017: $606,202
    • 2016: $216,024
    • 2015: $381,699
  • Assets Included in Purchase*
    • Equipment: Survey equipment, digital levels, total stations, scanners, high-end computers, multitude of software
    • Vehicles: 2 vehicles - 2020 Toyota Truck, 2013 Toyota
    • Intangible Assets: Strong recurring client base, well-known in the industry, long-standing reputation

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

Cash Flow Analysis

Description of Financial StatementP&L Statement
January-June 2020
Tax ReturnTax ReturnTax ReturnTax ReturnTax ReturnNotes
202020192018201720162015
GROSS SALES$801,053$1,330,905$1,352,918$1,801,820$1,315,511$1,344,933
Annualized$1,602,106
Net Income Shown on Financial Statement$225,125$285,007$267,471$519,342$216,850$364,010
ADDBACKS
Compensation to Owner$0$225,009$171,902$102,431$75,000$86,639
11% Tax on total W2 Salaries$0$24,751$18,909$11,267$8,250$9,530
Depreciation$0$1,633$20,002$59,202$1,369$2,122
Interest$0$29$0$0$595$2,718
Meals & Entertainment$2,139$2,243$2,439$0$0$2,720
Cell Phone$480$960$960$960$960$960$80/month
Owner's 401k$10,000$20,000$20,000$20,000$20,000$20,000$20,000/year
Replacement$0$-110,000$-110,000$-110,000$-110,000$-110,000
Owner's Disability Insurance$1,500$3,000$3,000$3,000$3,000$3,000$3,000/year
TOTAL ADDBACKS$14,119$167,625$127,212$86,860$-826$17,689
Seller's Cash Flow = Total Addbacks + Net Income$239,244$452,632$394,683$606,202$216,024$381,699
Annualized
Profit Margin29.87 %34.01 %29.17 %33.64 %16.42 %28.38 %
  • Profit Margin 2019: 34%

Clients

  • Residential
  • Commercial
  • Educational
  • Institutional
  • Transportation & Roadway
  • Large Engineering & Design Firms

Specific information regarding clients is available upon the receipt of a signed Non-Disclosure Agreement.

Services

  • Civil Engineering
  • Surveying
  • Planning
  • Design
  • Permitting
  • Construction Management

Personnel

  • 1 Owner
    • Project Engineer – overall firm management, public relations, design elements, marketing
  • 1 PT Professional Land Surveyor
  • 1 Engineer-in Training
  • 4 Surveyors
  • 2 CAD Technicians
  • 1 PT Structural Engineer
  • 1 Office Manager

Growth Opportunities

  • Continue to build connections/relationships in the area

Valuation Details

The Firm used a cash flow valuation methodology to determine the purchase price of the business. 

The formula used is as follows:

Cash Flow       x          Prescribed Multiple     =          Fair Market Value

Cash flow is the sum of business net income plus any owner perks and any non-onward going expenses.

A prescribed multiple is determined by a 20 question, 100-point parameter ranking system that is used to analyze the current business health. Each question is based on a scale from 1 to 5: 1 being low, 2 below average, 3 average, 4 above average, 5 high. The average of the responses sum is the business’ prescribed multiplier.

For this business, a 6-year average cash flow was used with a prescribed multiple of 3.65.  With this information, the computation is as follows:

$421,621         x          3.65     =          $1,538,918

The fair market value found above positions the business list price at $1,540,000.

Funding Example

Purchase Price:                             $1,540,000

12.5%Buyer Down Payment:          $192,500

12.5%Seller Financing:                   $192,500

75%Bank Loan:                             $1,155,000

Seller financing 5-year term at a rate of 4.50% equals a monthly loan payment of $3,589.

Bank loan 8-year term at a rate of 6% equals a monthly loan payment of $15,178.

After business expenses and loan payments, a buyer with a 12.5% down payment of $192,500 would retain a profit of $196,415, which results in a 102% return on investment in the first year.

A lender is required to have a minimum 1.5 coverage ratio for any business loans extended. At a proposed purchase price of $1,540,000 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.

Purchase Price:

$1,540,000

$
%
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:
6-year 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:
6-year 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

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.