Opportunities
Solar Panel Install for Agriculture & Commercial Markets
Well-known throughout the Midwest since 1977!
Specifications
This Southeast Iowa company has been well-known throughout the Midwest region since 1977! Specializing in solar installation, sign installation, and electrical construction for farmers, commercial & residential clients, and the industrial sector, the business has $3M worth of secured work to take them through the rest of 2020 and into 2021. The exceptionally highly skilled team includes 2 owners, one of which is an Electrical Engineer – the other is a Master Electrician and superintendent, along with a CFO, 1 accountant, 4 solar crew leaders, 6 electrical crew leaders, 2 sign installers, 1 FT mechanic, 2 assistant project managers, 2 solar sales reps, and 15-20 electrical apprentices to assist as needed. Their facilities are comprised of a 2,000 sq. ft. office/crew space, a 2,400 sq. ft. mechanic shop, 9,000 sq. ft. trailer parking space, and a combined total of 34,200 sq. ft. in equipment/material storage and truck parking.
The business has a considerable amount of assets, including several cube vans, trucks, trailers, generators, electric benders, welders, trenchers, backhoes, and an extensive amount of other equipment and tools. They use Foundation, which is a construction specific software designed for remote use, as well as PVsyst and Helioscope for solar design, and ConEst for estimating services.
With a solid team and an outstanding reputation in place, this company’s services are sought out by solar developers in the region. Substantial growth opportunities are on the horizon, as important strategic partnerships are developing, and the solar industry is soaring.
Business Highlights
- Year Established: 1977
- Location: Southeast Iowa
- Service Area: Throughout the Midwest
- Services: Solar panel installation, sign installation, electrical work
- Clients: Solar developers, farmers, commercial/residential, industrial
- Certifications: NABCAP Certified Master Electricians
- Facilities: 2,000 sq. ft. office/crew area, 34,200 sq. ft. equipment/material storage & truck parking, 2,400 sq. ft. mechanic shop, 9,000 sq. ft. trailer parking
- Reason for Selling: New opportunities
- Personnel: 30-40: 2 owners, 1 CFO, 1 accountant, 4 solar crew leaders + 8-15 installers/apprentices as needed, 6 electrical crew leaders + 4 electrical apprentices, 2 Assistant Project Managers, 2 solar sales reps, 2 sign installers, 1 mechanic
- Seller Training Period: 6-12 months
- Growth Opportunities: Develop more partnerships with solar developers, complete Tesla Solar Roof certification
- Current Owner’s Responsibilities: General management & oversight
Financial Highlights
- List Price: $6,550,000
- Gross Sales:
- 2019: $9,493,385
- 2018: $6,886,469
- Cash Flow:
- TTM: $1,190,378
- 2019: $1,345,934
- 2018: $841,225
- Replacement Cost of Assets*: $3,739,230
- Automobile/ Trans. Equipment: $2,173,586
- Furniture & Fixtures: $114,997
- Machinery & Equipment: $1,450,647
- Secured Work: $3M in signed contracts for 2020/2021
- Intangible Assets: Well-known in the industry, sought out by solar developers, solid team in place
*amounts may vary, assets may be depreciated, replacement cost, or fair market value
Cash Flow Analysis
| Description of Financial Statement | P&L Statement Nov '19 - Oct '20 | Tax Return | Tax Return | P&L Statement | Notes |
| TTM | 2019 | 2018 | 2017 | ||
| GROSS SALES | $7,685,797 | $9,493,385 | $6,866,469 | $7,004,070 | |
| Net Income Shown on Financial Statement | $574,610 | $237,522 | $276,880 | $1,519,517 | |
| ADDBACKS | |||||
| Compensation to Owner | $275,000 | $273,127 | $240,191 | $248,198 | |
| 11% Tax on total W2 Salaries | $175,290 | $30,044 | $26,421 | $27,302 | |
| Depreciation | $81,162 | $419,840 | $250,892 | $42,755 | |
| Interest | $0 | $95,556 | $83,701 | $35,926 | |
| Contributions/Donations | $825 | $0 | $0 | $5,087 | |
| Simple IRA | $19,916 | $19,916 | $19,786 | $22,477 | |
| Auto Expense | $24,000 | $24,482 | $18,355 | $16,673 | |
| Insurance | $65,568 | $65,568 | $65,568 | $65,568 | |
| Travel | $120,000 | $304,045 | $0 | $0 | |
| Cell Phone | $7,200 | $7,200 | $7,200 | $7,200 | |
| Replacement | $-80,000 | $-80,000 | $-80,000 | $-80,000 | Master Electrician |
| Replacement | $-90,000 | $-90,000 | $-90,000 | $-90,000 | Master Electrician |
| Rent | $-13,443 | $38,643 | $22,231 | $-8,750 | $80k/year onward going |
| Other unrelated Salaries | $30,250 | $0 | $0 | $0 | |
| TOTAL ADDBACKS | $615,768 | $1,108,421 | $564,345 | $292,436 | |
| Seller's Cash Flow = Total Addbacks + Net Income | $1,190,378 | $1,345,943 | $841,225 | $1,811,953 | |
| Profit Margin | 15.49 % | 14.18 % | 12.25 % | 25.87 % |
- Profit Margin TTM: 15%
Clients
- Solar Developers
- Farmers
- Commercial/Residential
- Industrial
Specific information regarding clients is available upon the receipt of a signed Non-Disclosure Agreement.
Services
- Solar panel installation
- Sign installation
- Electrical work
Personnel
- 2 Owners
- Owner 1: Electrical Engineer – general management/oversight
- Owner 2: Master Electrician/Superintendent – sales & project support
- 1 CFO
- 1 Accountant
- 4 Solar Crew Leaders
- 6 Electrical Crew Leaders
- 2 Sign Installers
- 1 Mechanic
- 2 Assistant Project Managers
- 2 Solar Sales Reps
- 15-20 Electrical Apprentices to assist projects as needed
Growth Opportunities
- Develop more partnerships with solar developers
- Strategic Casey’s General Stores relationship
- Tesla strategic relationship; Solar Roof has tremendous potential
Valuation Details
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 3 Year Average (2017-2019) Cash Flow was used with a prescribed multiple of 4.95. With this information, the computation is as follows:
$1,333,037 x 4.95 = $6,598,533
The fair market value found above positions the business list price at $6,550,000.
Funding Example
Purchase Price: $6,550,000
10%Buyer Down Payment: $650,000
5% Seller Promissory Note or 15% Equity Roll
70%Bank Loan: $4,585,000
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.
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210 N 78th St. 2nd FloorOmaha, NE 68114
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