Mechanical Engineering for Government Projects
Owner does employee oversight with no billable hours and will stay on for 1-2 years!
Owner does employee oversight with no billable hours and will stay on for 1-2 years! Serving municipal, governmental, institutional, commercial, and industrial clients, this business provides expertise in the areas of facility maintenance, alternative energy contracting, commissioning, and engineering. This business provides professional services to municipal, governmental, institutional, commercial, and industrial clients. With existing multi-year projects and an average sale size of $2.5MM, this company has over $1MM in progress and over $1MM in the pipeline. A 12% down payment of $156,000 returns $184,518 in the first year after debt payments! Specializing in the overall planning, coordinating, and controlling of a project from beginning to completion, licensed professional engineers offer solutions to clients’ specific building requirements. Their facility maintenance specialists are capable of HVAC & electrical work, landscaping & grounds maintenance, safety inspections, and more. As an alternative energy contractor, they can provide properties with efficient and effective energy solutions.
The team of six includes two engineers, three project managers, and one office manager. The firm’s owner and senior staff are recognized professional leaders in their respective areas of expertise and have extensive experience with national and local organizations.
Growth opportunities include the addition of staff dedicated to writing and responding to proposals as well as pursuing policy writing with the federal government.
- Year Established: 2012
- Location: San Diego County California
- Service Area: 20% California, 80% National
- Clients: Municipal, governmental, institutional, commercial, and industrial clients
- Services: Engineering services, commissioning, construction management and alternative energy contracting (50%); Facility maintenance (50%)
- Lease: 3,000 sq. ft. universal office space including 9 workstations
- Reason for Selling: Retirement planning
- Employees: 6: 2 Engineers, 3 Project Managers, 1 Office Manager
- Seller Training Period: 1-2 years
- Growth Opportunities: Adding additional staff dedicated to writing and responding to proposals as well as policy writing with the federal government
- Current Owner’s Responsibilities: Employee oversight with no billable hours
- List Price: $1,300,000
- Gross Sales:
- 2019: $1,716,877
- 2018: $1,773,520
- 2017: $1,409,909
- Cash Flow:
- 2019: $511,893
- 2018: $237,569
- 2017: $358,095
- Assets Included in Purchase*
- Equipment: Furniture, Fixtures & Equipment
- WIP: $1MM
- Pipeline: $1MM
- Intangible Assets: Experienced professional team with high level knowledge and qualifications
*amounts may vary
Cash Flow Analysis
|Description of Financial Statement||P&L Statement||Tax Return||Tax Return||P&L Statement||Notes|
|Net Income Shown on Financial Statement||$183,957||$121,344||$82,255||$91,320|
|Compensation to Owner||$0||$165,000||$120,000||$115,000|
|11% Tax on total W2 Salaries||$0||$18,150||$13,200||$12,650|
|Utilities||$5,472||$6,014||$7,418||$8,407||Only electric ($150/month) and internet ($100/month) will carry over|
|Seller's Cash Flow = Total Addbacks + Net Income||$511,893||$237,569||$358,095||$176,083|
|Profit Margin||29.82 %||13.40 %||25.40 %||11.29 %|
Specific information regarding clients is available upon the receipt of a signed Non-Disclosure Agreement.
- Engineering Services
Provides Licensed Professional Engineers (PE) who are experienced and well-versed in the architectural, civil engineering, electrical, mechanical, and structural fields. Offers solutions to building requirements that assist local and state organizations with the design, installation, commissioning, and maintenance of utility systems. Projects are managed by experienced personnel who monitor the quality of services provided by onsite technicians. They also provide complete owner representation and serve as the commissioning agent on systems designed and installed to meet LEED requirements. With the experience to identify multiple engineering issues with the facility, they are able to accurately make recommendations for effective resolution. Engineering services can be utilized for construction projects in the pre-design, design, construction, acceptance, and past occupancy phase.
- Commissioning Services
As an Owner’s Rep or third-party entity, these trained professionals that are familiar with all aspects of the commissioning process can maintain our independence and perform our duties with an unbiased approach from the Pre-Design Phase through the Warranty and Post Occupancy Phase. Commissioning services include: Whole Building Commissioning (Cx), Re-Commissioning (RCx) and Retro Commissioning.
- Construction Management Services
This team has over 75 combined years of Construction Management experience that specializes in the overall planning, coordinating, and controlling of a project from the beginning to completion. With a focus on meeting each client’s requirements in order to develop a functionally and financially viable project, their teams are committed to ensuring that the project is completed on time and within budget while complying with approved plans and specifications.
- Alternative Energy Services
Provide municipal, commercial, industrial, and institutional properties with efficient and effective energy solutions.
- Facility Maintenance
Provides multifaceted turn-key solutions for total facility operations. Their professionals provide more than just maintenance service, they build strong, lasting, working relationships with their clients so they know their facility is a top priority. Servicing and maintaining all systems for local, state, and federal customers, service technicians are experienced in troubleshooting, maintenance, and repair of building systems. Services Include:
- HVAC & Electric
- Landscaping & Ground Maintenance Services
- Fire & Life Safety Services
- Janitorial Services
- Tenant Improvements
- 2 Engineers
- 3 Project Managers
- 1 Office Manager
- Addition of staff dedicated to writing and responding to proposals
- Pursuing policy writing with the federal government
The Firm used a cash flow valuation methodology to determine the purchase price of the business.
The formula used is as follows:
Cash Flow x Prescribed Multiple = Fair Market Value
Cash flow is the sum of business net income plus any owner perks and any non-onward going expenses.
A multiple is prescribed by a 20 question, 100-point parameter ranking system that is used to analyze the current business health. Each question is based on a scale from 1 to 5: 1 being low, 2 below average, 3 average, 4 above average, 5 high. The average of the responses sum is the business’ prescribed multiple.
For this business, a 3-year average cash flow was used with a prescribed multiple of 3.5. With this information, the computation is as follows:
$369,186 x 3.5 = $1,292,151
The fair market value found above positions the business list price at $1,300,000.
Purchase Price: $1,300,000
12%Buyer Down Payment: $156,000
10%Seller Financing: $130,000
78%Bank Loan: $1,014,000
Seller financing 6-year term at a rate of 4.50% equals a monthly loan payment of $2,064.
Bank loan 8-year term at a rate of 6% equals a monthly loan payment of $13,325.
After business expenses and loan payments, a buyer with a 12% down payment of $156,000 would retain a profit of $184,518 which results in a 118% return on investment in the first year.
A lender is required to have a minimum 1.5 coverage ratio for any business loans extended. At a proposed purchase price of $1,300,000 with the terms listed above, the coverage ratio is 2.00.
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 Business Brokerage is not a real estate brokerage and therefore the staff will not handle any aspect of the lease, sale or purchase of real estate.
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: $
|Monthly Payment to Bank:||$|
|Yearly Payment to Bank:||$|
|Monthly Payment to Seller:||$|
|Yearly Payment to Seller:||$|
|Total Monthly Debt Service:||$|
|Total Yearly Debt Service:||$|
Fixed Charge Coverage Ratio
The bank will require a minimum ratio of 1.5 to be lendable.
3 Yr. Ave. Cash Flow
|Annual Debt Service:||$|
Buyer's Net Operating Income (NOI)
The amount of money the Buyer will retain as profit.
3 Yr. Ave. Cash Flow
|Annual Debt Service:||-$|
Buyer's Return on Investment (ROI)
The rate of return on the Buyer's down payment.
|Document Title / Description|
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