NYS Certified MBE - Environmental Remediation Services and Fire Proofing
95% of all work is completed in-house by a team of 5-25 floating laborers!
Providing expert environmental remediation services, including asbestos removal, demolition and fireproofing is the specialty of this certified minority business enterprise located in the Lower Hudson Valley of New York. Services in addition to asbestos removal (60%) include lead remediation, interior and structural demolition (20%), and spray-on fireproofing (20%). Most business is accomplished in Upstate New York (85%), with the remaining work completed in the New York City area. Customers include government organizations, state agencies, general contractors, construction managers, property managers, and property owners. Project timelines are from a few weeks to a several months long and most contract (85%) are earned through a request for proposal process. Opportunities are plentiful for growth in the New York City Area as well as widening the service area to include New Jersey, Pennsylvania, or additional regions of New York.
The company operates from a small office and warehouse space. Purchasing and storing large amounts of equipment is not necessary as this business rents any large items needed to complete projects and houses very few assets on site. All inventory and materials are ordered by project and may be briefly stored by this business or drop-shipped to the work site.
Nearly 95% of all work is completed in-house by a team of five to twenty-five floating laborers. Rarely subcontractors are utilized for large projects or those at long distances. Supporting this team are two supervisors, one accountant, and one team assistant.
- Year Established: 2012
- Location: New York
- Service Area: Upstate New York, five boroughs, and Long Island
- Services: Asbestos removal (60%), interior demolition (20%), fireproofing (20%)
- Clients: Government, state agencies, general contractors, construction managers, property managers, property owners
- Lease: Operations will soon be condensed into one location with an office space and large warehouse
- Reason for Selling: Divestment
- Personnel: 2 Supervisors, 1 accounting, 1 assistant, 5-25 floating laborers
- Seller Training Period: 6 months
- Growth Opportunities: Focus on driving new sales in New York City, expand the service area beyond upstate New York
- Current Owner’s Responsibilities: Sales, financial and project management, general oversight
- List Price: $610,000
- Gross Sales:
- 2019: $3,690,970
- 2018: $4,067,096
- 2017: $2,023,288
- Cash Flow:
- 2019: $211,396
- Assets Included in Purchase*
- Equipment: $15,000: Office equipment, tools, furniture, fixtures; All equipment is rented, so there is little long-term investment in equipment overhead
- A/R: $1.2 Million and averages $750-$1M
- Average Backlog: $1.5-$1.9M
- Intangible Assets: Knowledgeable and well-trained team who work independent of owner supervision
Cash Flow Analysis
|Description of Financial Statement||P&L Statement||Tax Return||Tax Return||Tax Return||Tax Return||Tax Return||Notes|
|Net Income Shown on Financial Statement||$234,459||$31,125||$51,880||$-55,070||$-2,793||$6,009|
|Compensation to Owner||$38,181||$74,360||$142,020||$75,790||$62,920||$62,920|
|11% Tax on total W2 Salaries||$4,200||$8,180||$15,622||$8,337||$6,921||$6,921|
|Auto-Personal Use||$35||$272||$715||$1,232||$1,269||$2,377||10% is personal|
|Cell Phone||$960||$1,920||$1,920||$1,920||$1,920||$1,920||$160/month for personal lines|
|Rent Adjustment||$4,950||$15,022||$14,940||$8,450||$7,720||$16,851||Ongoing rent about $7k/year|
|Per diem||$8,243||$17,000||$17,000||$17,000||$17,000||$17,000||For owner|
|Seller's Cash Flow = Total Addbacks + Net Income||$265,962||$211,396||$196,019||$61,436||$96,034||$115,794|
|Profit Margin||11.37 %||5.73 %||4.82 %||3.04 %||6.68 %||8.90 %|
- State agencies
- General contractors
- Construction managers
- Property managers
- Property owners
- Due to the political climate, the union is prevalent in the work they do. The union will also reach out to them when there is a private client that needs a project done.
- Asbestos removal/general environmental remediation (60%)
- Demolition (20%)
- Fireproofing (20%)
- Project management
- 2 Supervisors
- 1 Accounting
- 1 Assistant
- 5-25 Floating laborers
All company license and crews have their handlers license
- Focus on driving new sales in New York City
- Tap into more federal funds and programs
- Expand the service area beyond upstate New York
- New Jersey
- The remainder of New York State
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 prescribed multiple is determined 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 multiplier.
For this business, a 2019 cash flow was used with a prescribed multiple is 3. With this information, the computation is as follows:
$211,396 x 3 = $634,188
The fair market value found above positions the business list price at $610,000.
Purchase Price: $610,000
12.5%Buyer Down Payment: $76,250
12.5%Seller Financing: $76,250
75%Bank Loan: $457,500
Seller financing 5-year term at a rate of 4.50% equals a monthly loan payment of $1,422.
Bank loan 10-year term at a rate of 6% equals a monthly loan payment of $5,079.
After business expenses and loan payments, a buyer with a 12.5% down payment of $76,250 would retain a profit of $133,387, which results in a 174% 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 $610,000 with the terms listed above, the coverage ratio is 2.71.
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.
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.
2019 Cash Flow
|Annual Debt Service:||$|
Buyer's Net Operating Income (NOI)
The amount of money the Buyer will retain as profit.
2019 Cash Flow
|Annual Debt Service:||-$|
Buyer's Return on Investment (ROI)
The rate of return on the Buyer's down payment.
|Document Title / Description|
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