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HVAC & Plumbing in Northern California--Year-Over-Year Growth

With nearly $13M in sales!

CASH FLOW
$1,915,783

Specifications

  • Price
    $6,850,000

  • Revenue
    $12,956,733

  • Profit Margin
    15%

  • Location
    Sacramento Valley California

  • Service Area
    Northern California

  • Reason for Sale
    Strategic roll up/industry consolidation

  • Lease
    14,000 sq. ft.: 2,000 sq. ft. office, remaining is warehouse and storage, large roll-up doors

  • Employees
    70: Controllers, foremen, project managers, assistant, field and shop workforce

  • Equipment
    $685,000

This HVAC and plumbing company in Northern California has seen year-over-year sales growth since 2017 with nearly $13M in sales in 2020!  Serving the Sacramento area since 2003, they complete HVAC (70%) and plumbing services (30%). With an on-site fully automated sheet metal fabrication shop, the company is capable of manufacturing ductwork up to 14 gauge, plumbing and piping, as well as architectural sheet metal and flashings. There are 70 employees on staff, including controllers, foremen, project managers, assistants, and a field/shop work force.  The owner has built a solid customer base with a focus on serving schools, government institutions, and commercial office buildings, and many customers have been with this company for over fifteen years.  The owner currently focuses on lead generation, some estimations, bonding, and general oversight of the business.

 

Operations are managed from a large 14,000 square foot location in the Sacramento Valley area.  The office has 2,000 square feet of space with a reception area, private offices, and staff spaces.  The remaining 12,000 square feet is dedicated to warehouse, storage, and the fabrication shop. 

 

Priced at $6,850,000, there is huge potential for continued growth and success. The industry in Northern California always has room for expansion and the company could take on additional available work in the region.  Another area for development could be found in adding a service department and considering the implementation of maintenance and inspection contracts.

Business Highlights

  • Year Established: 2003
  • Location:  Sacramento Valley, California
  • Service Area:  Northern California
  • Services: HVAC (70%) and plumbing (30%)
  • Clients: Educational institutions, government institutions, commercial office buildings
  • Lease: 14,000 sq. ft.: 2,000 sq. ft. office, remaining is warehouse and storage, large roll-up doors
  • Reason for Selling: Strategic roll up/ industry consolidation
  • Personnel: 70: Controllers, foremen, project managers, assistant, field, and shop workforce
  • Seller Training Period: Two years
  • Growth Opportunities: Consider maintenance and inspections contracts, expand service area
  • Current Owner’s Responsibilities: Oversight, no labor

Financial Highlights

List Price: $6,850,000


  • Cash Flow:
    • 2020: $1,915,783
  • Assets Included in Purchase:
    • Equipment: $187,000: Tools, equipment, furniture, fixtures, storage racking, workshop
    • Vehicles: 18:$498,537 
    • A/R: $2,600,000
    • Secured Work: $5,000,000 with profit over $2M       
    • Pipeline: $5,500,000

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

Cash Flow Analysis

Description of Financial StatementP&L StatementTax ReturnTax ReturnTax ReturnTax ReturnNotes
20202019201820172016
GROSS SALES$12,956,733$11,892,976$8,564,656$7,328,072$6,361,133
Net Income Shown on Financial Statement$1,830,520$224,756$512,536$824,829$341,519
ADDBACKS
Depreciation$0$12,400$8,767$5,032$7,203
Interest$2,513$33,289$16,864$-402$2,520
Meals & Entertainment$25,270$27,762$16,804$22,649$12,152
Non-Business Telephone$480$480$480$480$480$40/month
Auto-Personal Use$3,000$3,000$3,000$3,000$3,000$3,000/year
Insurance Premiums for Owners: Health, Life, Auto$24,000$24,000$24,000$24,000$24,000$2,000/month
Other$0$0$8,553$0$0One time investment expense
Rent$30,000$30,000$30,000$30,000$30,000
Contributions/Donations$0$500$0$0$0
TOTAL ADDBACKS$85,263$131,431$108,468$84,759$79,355
Seller's Cash Flow = Total Addbacks + Net Income$1,915,783$356,187$621,004$909,588$420,874
Profit Margin14.79 %2.99 %7.25 %12.41 %6.62 %
  • Profit margin: 15%

Clients

  • Educational institutions
  • Government institutions
  • Commercial office buildings

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

Services


Personnel

Total Personnel: 70

  • Controllers
  • Foremen
  • Project managers
  • Assistant
  • Field workforce
  • Shop workforce

Growth Opportunities

  • Add service department
  • Consider maintenance and inspections contracts
  • Expand service area
  • Take on additional available work

Valuation Details

Funding Example

Purchase Price:

$6,850,000

$
%
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:
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: %

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

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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.