Opportunities
Earthwork, Shoreline Protection, Site Prep in Texas – 90+ FT Employees
225 jobs per year – 20+ active projects at one time!
Specifications
This Earthwork & Industrial Site Prep business completes 225 jobs per year, with a minimum of 20 active projects at one time! Located in Victoria, Texas and with 90+ FT employees, their average client tenure is 13 years. Sale size ranges from $10k to $1.5M, with an average of $350k. With $9.4M in WIP and over $3M in their pipeline, work is plentiful for this well-diversified team. They offer a vast array of heavy civil construction services, including building streets, subdivisions, commercial site preparation, and industrial work at petrochemical plants, as well as utility system construction, earthwork, site preparation, coastal erosion control, shoreline protection, and general maintenance. Clients are comprised of private developers, industrial, city, county, and state governments, and GC’s. This versatile offering of services and diverse client base works in this company’s favor, as they don’t rely heavily on one client or sector. Approximately 30% of their work is as the GC, primarily for the county, city, or state. The other 70% involves working for the GC on a project as the sub. While they do have a go-to list of subcontractors when needed, the majority of the time, it’s their own 90+ person team completing the work, which boosts profit margin.
Over $7M in assets includes $5M in heavy equipment, $1.2M in vehicles, $57k worth of trailers, tools valued at $365k, and office furniture & software worth $379k. The team works out of a 6,000 sq. ft. office building located on 5 acres of land; their facilities also include 1 heavy equipment shop, 1 truck shop (2,000 sq. ft. each), and 1 fuel & oil shed (1,200 sq. ft.). The owner of the business owns the facility under a separate entity and leases it back to the business for $9,000/month; this rate would be kept the same under new ownership. With a solid reputation in the area, the business has long-standing relationships with customers and GC’s alike; they are able to keep their service area within a 100-mile radius of the office.
Utilizing top notch ComputerEase, HCSS, AGTEK, and Trimble software, this well-respected team receives invites to bid from GC’s they’ve worked with over the years where they have a 75% win rate; they also subscribe to websites that send notices of upcoming projects that are up for public bidding, with a 25% success rate on those. Priced at $20,250,000, there is ample opportunity for growth. Expanding the service area to other gulf states for high margin erosion control projects and actively pursuing more bids would certainly lead to an increase in revenue. There is currently a very limited sales team and little to no marketing. Working Capital is $2.1M and would transfer to the new owner.
Business Highlights
Year Established: 1959; incorporated in 1971; under current ownership since 1996
Location: Victoria, Texas
Clients: Heavy Civil City, County & State governments, industrial, private developers & GC’s
Services: Coastal erosion control, shoreline protection, utility system contracting, earthwork, site preparation, maintenance, industrial site work
Lease: 5 acres of land, with 1 office building (6k sq. ft.), 1 heavy equipment shop (2k sq. ft.), 1 truck shop (2k sq. ft.), 1 fuel & oil shed (1,200 sq. ft.): $9,000/month
Employees: 90+ FT W2 employees; plus, a go-to list of subcontractors hired as needed
Reason for Selling: Age; Owner is in 60’s and looking to fully retire
Seller Training Period: 1 year; however, seller is passive in business and a new owner will likely not need transition time of a full year
Owner Responsibilities: Very limited; they travel extensively and own several other companies
Growth Opportunities: Expand service area to other gulf states for high margin erosion control projects; there is currently a very limited sales team and little to no marketing
Employees
Board of Directors:
- Owner/CEO
- General Manager
- CFO
- Office Manager
Team of Employees:
- 4 Admin
- Chief Estimator
- 2 Estimators/Project Managers
- 1 Asset Manager
- 1 Trucking Manager
- 3 Mechanics
- 1 Field Engineer
- 1 Safety/Quality Control Manager
- 2 Site Safety Technicians
- 5 Superintendents
- 9 Foremen
- Survey Crew
- Crews & Subcontractors as needed
Assets of Business
- Assets: $7,143,470
- Heavy Equipment, including 10 Excavators, 3 Motor Graders, 6 Backhoes, 8 Dozers, 3 Mack Haul Trucks, 5 Skid Steers, etc.: $5,074,799
- Vehicles, including 50+ Trucks: $1,267,000
- Trailers, including 2 40’ bottom dump trailers & 1 lowboy trailer: $57,250
- Tools: $365,342
- Office Equipment: $302,006
- Software: $77,073
Cash Flow Analysis
| Description of Financial Statement | P&L Statement Jan-August 2021 | P&L Statement | P&L Statement | P&L Statement | Notes |
| 2021 | 2020 | 2019 | 2018 | ||
| GROSS SALES | $15,648,322 | $23,542,002 | $31,372,536 | $23,884,441 | |
| Annualized | $23,472,483 | ||||
| Net Income Shown on Financial Statement | $2,150,847 | $1,945,406 | $2,328,744 | $701,498 | |
| ADDBACKS | |||||
| Compensation to Owner | $266,322 | $1,489,654 | $1,268,930 | $748,124 | Owner & Spouse salary + bonuses |
| 11% Tax on total W2 Salaries | $29,295 | $163,862 | $139,582 | $82,294 | |
| Depreciation | $855,578 | $1,332,907 | $1,658,209 | $1,363,552 | |
| Interest | $0 | $32,966 | $54,087 | $43,137 | |
| Contributions/Donations | $10,078 | $57,578 | $36,897 | $24,176 | |
| Meals | $0 | $8,890 | $9,308 | $6,925 | |
| Insurance | $11,805 | $17,708 | $17,708 | $17,708 | Owner & Spouse - Medical/Dental/Life |
| Marketing | $0 | $5,000 | $0 | $0 | |
| 401k | $13,316 | $74,483 | $63,447 | $37,406 | 5% of owner & spouse salary |
| Auto-Personal Use | $12,000 | $18,000 | $18,000 | $18,000 | |
| Advertising & Public Relations | $14,587 | $6,603 | $12,615 | $5,870 | 50% Personal |
| PPP Loan | $0 | $-1,337,000 | $0 | $0 | |
| Bad Debt | $0 | $22,977 | $0 | $0 | Anomaly: first write-off in 10+ years |
| Credit Offset | $0 | $23,377 | $0 | $0 | |
| Replacement | $-53,333 | $-80,000 | $-80,000 | $-80,000 | 4th Estimator for growth and light replacement of owner |
| TOTAL ADDBACKS | $1,159,648 | $1,837,005 | $3,198,783 | $2,267,192 | |
| Seller's Cash Flow = Total Addbacks + Net Income | $3,310,495 | $3,782,411 | $5,527,527 | $2,968,690 | |
| Annualized | |||||
| Profit Margin | 21.16 % | 16.07 % | 17.62 % | 12.43 % |
Valuation
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