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Opportunities

Electrical, HVAC, Security, & Traffic Signals Design & Installation

With an 80% recurring client base & a versatile team of employees!

CASH FLOW
$1,472,747

Specifications

  • Price
    $5,950,000

  • Revenue
    $4,756,828

  • Location
    Charleston, South Carolina

  • Cash Flow
    $1,472,747

  • Employees
    22 full time office & field employees

  • Profit Margin
    33%

With an 80% recurring client base, this multi-service business has an incredibly versatile team of employees in place!  Self-performing 90% of their work, this company has an average WIP worth $2M. They offer complete mechanical, electrical, and automation design, installation, and maintenance, as well as steel erection, concrete foundations, design build, and heavy equipment installation. The team of employees is incredibly versatile, with the ability to transition from trade to trade very easily. Less than 20% of business is new construction and they have 25+ recurring clients that span different industries. They have existing government contracts with the city and department of transportation.  The company started performing more mechanical services a few years ago, resulting in higher net income and profit margins. As they continue to do more on the mechanical side in the coming years, a new owner can expect to see profit margins and net income continue to increase, as profit margins from mechanical work is 35%, compared to 15% from general contracting services.

 

Located near Charleston, South Carolina, the company operates from a two-acre property including four buildings. They are well-known all over the Carolinas. Work is typically steady throughout the year and most projects are completed within a 100-mile radius of the office.

 

Priced at $5,950,000, this is a business that is in a position to grow in the construction industry. There is tremendous room for expansion into the mechanical side, which currently accounts for only 9% of the business, but has a higher profit margin than the other services they provide.  A 12.5% down payment of $743,750 returns $711,843 in the first year after debt payments – a 96% return on investment. 

Business Highlights

Year Established: 2005

Location: Charleston, South Carolina

Service Area: Within 100-mile radius

Number of Clients: 25+ active recurring clients

Services: General contracting services (50%) – Structural and Steel Erection, Traffic Signals; Electrical (41%) – Security; Mechanical (9%) – HVAC

Building: Four buildings on two acres includes offices, meeting rooms, warehouse, shop and storage space

Lease: $3,000 per month – low overhead

Reason for Selling: Industry Consolidation

Employees: 14-24 field & office employees

Seller Training Period: 2 years; willing to stay on as President or GM

Growth Opportunities: Expansion into structural and steel erection projects

Current Owner’s Responsibilities: Oversees office roles - team is fully capable of running without owner

Financial Highlights

  • List Price: $5,950,000

 

  • 2020 Cash Flow $1,215,987
  • 2019 Cash Flow: $1,729,506
  • A/R: $400,000
  • A/P: $200,000
  • Work in Progress: Average $2,000,000
  • Backlog: $2,00,000

*amounts may vary

 

Cash Flow Analysis

Description of Financial StatementTax ReturnTax ReturnTax ReturnTax ReturnNotes
2020201920182017
GROSS SALES$4,756,828$5,478,368$4,384,111$3,571,594
Net Income Shown on Financial Statement$1,251,892$1,760,804$1,888,366$448,536
ADDBACKS
Depreciation$0$2,408$6,543$8,751
Interest$0$0$862$2,947
Meals & Entertainment$3,540$4,526$5,121$7,631
Cell Telephone$1,800$1,800$1,800$1,800
IRA$8,963$10,176$12,116$12,279
Life Insurance$3,592$3,592$3,592$3,592
Compensation to Owner$78,000$78,000$57,000$42,000
Rent$-16,800$-16,800$-14,700$-14,700$42k/year onward going
Retain Owner$-115,000$-115,000$-115,000$-115,000
TOTAL ADDBACKS$-35,905$-31,298$-42,666$-50,700
Seller's Cash Flow = Total Addbacks + Net Income$1,215,987$1,729,506$1,845,700$397,836
Profit Margin25.56 %31.57 %42.10 %11.14 %
  • 2020 numbers down slightly due to COVID.
  • 3-year average profit margin: 33%

Services

  • Design Build
  • Concrete foundations
  • Steel Erection
  • Electrical design, installation and maintenance
  • Automation design, installation and maintenance
  • Fiber Optics design, installation and maintenance
  • Mechanical design, installation and maintenance
  • Heavy equipment installation
  • Fabrication
  • HVAC design, installation and maintenance

Assets Included in the Purchase

  • Assets Included in Purchase: $1,130,000

 

  • Heavy Equipment: $126,500 (6) forklift, excavator, scissor lift, etc.
  • Vehicles: $808,720 (22) trucks, digger, crane, etc.
  • Trailers: $101,350 (16) 

Other Assets

  • Included Working Capital: $200,000
  • Intangibles: Stellar reputation the Carolinas with 25+ recurring clients

 

*See additional asset information in the attachments

Valuation Details

Growth Opportunities

Growth opportunities include pursuing more projects in the mechanical side and especially general contracting, structural and steel erection, which currently accounts for only 9% of the business. There are also opportunities to scale business through marketing and advertising as less than 20% of their current business is new work.

Funding Example

Purchase Price:

$5,950,000

$
%
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 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:
2-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

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210 N 78th St. 2nd Floor
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