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Large Electrical Contractor in SW States with Immensely Growing Populations

Over $40M in sales with 400+ employees!

CASH FLOW
$4,120,948

Specifications

  • Price
    $23,550,000

  • Revenue
    $41,463,820

  • Cash Flow
    $4,120,948

  • Location
    Headquarters in Phoenix, AZ, with 2 other offices in Arizona, 1 office in New Mexico, and 1 office in Texas

  • Service Area
    Throughout Arizona, New Mexico, and Texas

  • Employees
    400+ FT W2 employees, including 7 Area Managers, Warehouse Manager, Controller, Backhoe Operators, Bidding Department, Admin Officer, Maintenance Departments, plus field workers/electricians

Boasting nearly $41.5M in sales in 2020 this electrical contracting company has over 400 full-time W2 employees with five offices throughout the American Southwest! Headquartered in Phoenix in an office/warehouse that holds $1M worth of inventory, the company also has offices in Tucson, Prescott, El Paso, and  Albuquerque. As the populations in those areas are booming, the demand for this company’s services is through the roof, with no end in sight. They currently wire around 200 homes per week, which comes out to about 10k wiring jobs per year. Their client base primarily consists of big builders in Arizona and smaller builders in New Mexico and Texas, with 10 of the big builders accounting for 80% of revenue. Work is secured years into the future, as builders may purchase land and develop it for 500-1,000 homes; those homes may take 7-10 years to be completed.

 

In addition to a large variety of electrical services, the company also provides backhoe services for trenching used for direct-burial cables. Assets include 5 backhoes, around 350 trucks, and 2 long-haul tractor-trailers. Their inventory is concentrated in the Phoenix warehouse. As jobs are given the go-ahead, the necessary components are packed up and transported to the correct city office, where they are picked up by a field employee and taken to the job site.

 

Priced at $23,550,000 growth potential is tremendous for a new owner. Builders are frequently requesting this company to work in other cities and states due to a massive influx of new residents (Texas and Arizona combined gained 800,000 residents in 2018-19 while Colorado and Oklahoma gained 350,000).* Expanding into these areas undergoing significant population growth would certainly increase revenue for years to come. The solid reputation and strong team are already in place – a new owner could take this company to the next level.

 

*Data taken from US Census Bureau—State-to-State Migration Flows: 2019

Business Highlights

Year Established: 50+ years

Location: Headquarters in Phoenix, AZ, with 2 other offices in Arizona, 1 office in New Mexico, and 1 office in Texas

Service Area: Throughout Arizona, New Mexico, and Texas

Services: Internal electrical wiring for new homes (90%), backhoe services, electrical repair, electrical for remodel projects (10%)

Clients: Homebuilders in AZ, NM, and TX

Lease: Phoenix location ($6k/month) includes warehouse to hold $1M worth of inventory; other 4 offices ($2k-$3k/month each)

Reason for Selling: Approaching retirement

Personnel: 400+ FT W2 employees, including 7 Area Managers, Warehouse Manager, Controller, Backhoe Operators, Bidding Department, Admin Officer, Maintenance Departments, plus field workers/electricians

Seller Training Period: 6-12 months

Growth Opportunities: Expand into other booming cities & states including Colorado and Oklahoma

Current Owners’ Responsibilities: Owner 1: President; Owner 2: Advisor (Board Member)

Financial Highlights

  • List Price: $24,000,000

  • 2020 Cash Flow: $4,120,948
  • 2019 Cash Flow: $2,404,055

Cash Flow Analysis

Description of Financial StatementP&L StatementP&L StatementNotes
20202019
GROSS SALES$41,463,820$36,439,669
Net Income Shown on Financial Statement$2,851,422$1,296,012
ADDBACKS
Compensation to Owner$0$270,000Bonus - not onward going
Bank Interest$198,924$123,449
Depreciation/Amortization$338,722$215,423
Goodwill Amortization$666,807$389,603
Interest - Other$1,300$24
Gifts/Donations$39,508$13,108
Entertainment 50%$24,265$46,436
Legal$0$50,000Not onward going
TOTAL ADDBACKS$1,269,526$1,108,043
Seller's Cash Flow = Total Addbacks + Net Income$4,120,948$2,404,055
Profit Margin9.94 %6.60 %

Valuation

Funding Example

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210 N 78th St. 2nd Floor
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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.