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Manufacturing & Installation of Millwork for Schools & Churches

90% commercial clients – schools, churches, hospitals, government buildings, office buildings, etc.!

CASH FLOW
$2,176,616

Specifications

  • Price
    $2,400,000

  • Revenue
    $7,732,381

  • Cash Flow
    $2,176,616

  • Location
    Salt Lake City, UT

  • Service Area
    Western U.S. Region: licensed in UT, CA, ID, NM, & HI

  • Intangible Assets
    Affiliated with all major contractors in Utah, strong recurring client base

  • Employees
    9: 1 Shop Forman + 2 Project Managers, 1 Estimator, 1 Production Manager, 1 Office Manager, 4 Installers + 10-15 Fabricators and subcontracted installers as needed

  • Equipment
    $906,550

  • Reason for Sale
    Approaching retirement

This millwork manufacturing & installation company has 90% commercial clients! Based in a 10,000 sq. ft. facility with 900k+ in equipment and assets, this custom millwork business is affiliated with all major contractors in Utah. Established for 25 years and licensed in Utah, California, Idaho, New Mexico, and Hawaii, their clients include schools, churches, hospitals, corporate offices, universities, and government buildings, along with some residential work in apartment complexes, homes, and condos. Assets include CNC routers, a horizontal boring machine, gliding saw, state-of-the art bander, table saw, chop saws, timesaver sander, a state-of-the-art spray booth for finish work, plus all of the basic equipment & tools needed for each job. The highly skilled team is comprised of the owner, who handles general oversight, 1 Shop Forman, 2 Project Managers, 1 Estimator, 1 Production Manager, 1 Office Manager, 4 Installers, 10-15 Fabricators, and subcontracted installers as needed.

 

The business is licensed in Hawaii, which is a major advantage, as there is very little competition; the company has completed $4M worth of work there.  Their reputation has earned them several contracts with top-name businesses, religious affiliations, and area universities.

 

Booked solid until half-way through 2021, this year is gearing up to be their most profitable year on record. Being considered an essential business, they have not been impacted by COVID. At max capacity in their current facility, expanding their labor force and facility would lead to incredible revenue growth. There is also strong potential to take over the market share in the region, as many smaller businesses will not survive the pandemic.

Business Highlights

  • Year Established: 1995
  • Location:  Salt Lake City, UT
  • Service Area:  Western U.S. Region: licensed in UT, CA, ID, NM, & HI
  • Services: Fabrication, manufacturing, and installation of custom commercial millwork & cabinetry
  • Clients: Primarily commercial (90%): schools, hospitals, churches, universities, government buildings, office buildings, banks
  • Lease: 10,000 sq. ft. facility
  • Reason for Selling: Approaching retirement
  • Personnel: 9: 1 Shop Forman + 2 Project Managers, 1 Estimator, 1 Production Manager, 1 Office Manager, 4 Installers + 10-15 Fabricators and subcontracted installers as needed
  • Seller Training Period: Will stay on 3-4 years
  • Growth Opportunities: Increase the market share, expand facility & labor force to be able to take on more work
  • Current Owner’s Responsibilities: General Oversight

Financial Highlights

  • List Price: $2,400,000
  • Gross Sales:
    • 2020: $7,732,381 Annualized
    • 2019: $3,955,735
    • 2018: $4,049,446
  • Cash Flow:
    • 2020: $2,176,616 Annualized
    • 2019: $516,732
    • 2018: $561,615
  • Assets Included in Purchase*
    • Equipment: $680,000: CNC routers, horizontal boring machine, gliding saw, state-of-the-art bander, table saw, chop saws, timesaver sander, planer, state-of-the-art spray booth for finish work, all of the basic equipment/tools needed
    • Vehicles: $226,550: 2019 Hino 18’ Dry Van, 2017 Hino Truck, 2015 Dodge Ram 2500, 2 trailers
      • Retail value
    • Intangible Assets: Affiliated with all major contractors in Utah, strong recurring client base
  • Debt free
    • A/R is strong, A/P is minor

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

Cash Flow Analysis

Description of Financial StatementP&L Statement
Jan-Sept 2020
Tax ReturnTax ReturnNotes
202020192018
GROSS SALES$5,799,286$3,955,735$4,049,446
Annualized$7,732,381
Net Income Shown on Financial Statement$1,545,863$220,915$192,638
ADDBACKS
Compensation to Owner$86,891$115,457$108,890
11% Tax on total W2 Salaries$9,558$12,700$11,978
Depreciation$0$43,686$113,989
Interest$0$204$980
Simple IRA$5,041$3,464$3,2673% match for owner
Auto Expense$12,411$19,611$17,63150% personal
Cell Phones$2,700$3,600$3,600$300/month for personal lines
Misc.$11,250$15,000$15,000Personal expenses
Meals & Entertainment$7,499$10,000$10,000Personal expenses
Travel$7,499$10,000$10,000Personal expenses
Replacement Salary$-56,250$-75,000$-75,000To replace/retain owner
One-Time Travel Cost$0$137,095$0
Vehicle Upgrade$0$0$37,801
One-Time Insurance Cost$0$0$76,241
TOTAL ADDBACKS$86,599$295,817$334,377
Seller's Cash Flow = Total Addbacks + Net Income$1,632,462$516,732$527,015
Annualized
Profit Margin28.15 %13.06 %13.01 %
  • Profit Margin: 13%
  • In 2017, tax credits were taken advantage of. They were also put in a 180k CNC and another 20-30k program to run the 30k.

Clients

  • Schools
  • Hospitals
  • Banks
  • Office Buildings
  • Universities
  • Government Buildings
  • Churches
    • 750k with churches in the next 6-8 months
    • Bid large projects that would total to 2 million
    • 600k project for a temple in Cape Verde, Africa
    • Bids in Honduras, NZ, Arkansas, and Ohio

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

 

Services

  • Fabrication, manufacturing, and installation of custom commercial millwork & cabinetry

Personnel

  • 1 Owner
    • Manages all oversight, oversees the office manager and estimator, and answers project questions with managers if there are any.
  • 1 Shop Foreman
  • 2 Project Managers
  • 1 Estimator
  • 1 Production Manager
  • 1 Office Manager
  • 4 Installers
  • 10-15 Fabricators
  • Subcontracted Installers as needed

Growth Opportunities

  • Increase market share
  • Expand facility and labor force to be able to take on more work

Funding Example

Purchase Price:                             $2,400,000

12.5%Buyer Down Payment:          $300,000

12.5%Seller Financing:                   $300,000

75%Bank Loan:                             $1,800,000

Seller financing 5-year term at a rate of 4.50% equals a monthly loan payment of $5,593.

Bank loan 10-year term at a rate of 6% equals a monthly loan payment of $19,984.

After business expenses and loan payments, a buyer with a 12.5% down payment of $300,000 would retain a profit of $766,535, which results in a 256% return on investment in the first year.

A lender is required to have a minimum 1.25 coverage ratio for any business loans extended. At a proposed purchase price of $2,400,000 with the terms listed above, the coverage ratio is 3.50.

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:

$2,400,000

$
%
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:
3-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:
3-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: %

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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.