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Tank Cleaning & Disposal of Drilling Waste

Clients include oil, gas and utility companies!

CASH FLOW
$857,429

Specifications

  • Price
    $3,300,000

  • Revenue
    $5,145,236

  • Cash Flow
    $857,429

  • Location
    Alberta, Canada

  • Service Area
    Alberta Region

  • Intangible Assets
    Solid reputation in the region, recurring client base

  • Profit Margin
    15%

  • Employees
    24-31: 2 owners, 1 regional manager, 1 dispatcher, 1 safety officer, 1 mechanic, 2 junior mechanics, 1 shop hand/assistant + 15-22 operators/assistants

  • Equipment
    $1,780,985

This oil field service company specializes in turnaround and industrial cleaning services for oil, gas and utility companies!  Handling all aspects for the disposal of drilling waste in the oil and gas sector, this business currently has 250 clients, 50 of those recurring. 70% of their revenue comes from turnaround and industrial cleaning services; the other 30% is a mixture of maintenance, water delivery, vegetation control, water truck services, mobile steaming and equipment rentals. Personnel includes 1 Regional Manager, 1 Dispatcher, 1 Safety Officer, 1 Mechanic, 2 Junior Mechanics, 1 Shop Hand/Assistant, and15-22 Operators/Assistants. The 2 owners work remotely doing general business oversight and accounting & payroll management. Their vast array of high-quality equipment is comprised of hydro vacs, combo vacs, tank trucks, straight vacs, water trucks, mobile steamers, pressure trucks, and maintenance units. The business is COR Certified, Comply Works Certified, and belongs to ISNetworld.

 

The company’s leased space consists of an 11-acre industrial fully fenced yard site, a 750 sq. ft. office with 4 maintenance bays, and a 5-bedroom crew house. A 18% down payment of $594,000 returns $258,170 in the first year after debt payments with the bank loan being 100% collateralized.

 

Tremendous signage, word-of-mouth referrals, and a rock-solid reputation gives this company a firm grasp on the area. Promoting their one-stop-shop service, hiring a salesperson, increasing truck utilization, and expanding into neighboring communities would undoubtedly grow the business and increase revenue.

Business Highlights

  • Year Established: 1999
  • Location:  30 km from Edmonton, CAN
  • Service Area: Alberta Region
  • Services: Disposal of drilling waste in oil and gas sector, turnaround and industrial cleaning services
  • Clients: Alberta-based oil and gas companies, local utility companies, municipal and rentals
  • Certifications: COR Certified, Comply Works Certified, ISNetworld Member
  • Lease: 11-acre industrial fully fenced yard site, 750 sq. ft. office w/ 4 maintenance bays + 5-bedroom crew house
  • Reason for Selling: Strategic exit planning
  • Personnel: 24-31: 2 owners, 1 regional manager, 1 dispatcher, 1 safety officer, 1 mechanic, 2 junior mechanics, 1 shop hand/assistant + 15-22 operators/assistants 
  • Seller Training Period: 6-12 months
  • Growth Opportunities: Promote one-stop-shop services, increase truck utilization, expansion into neighboring communities
  • Current Owners’ Responsibilities: Owner 1: general oversight of business; Owner 2: accounting

Financial Highlights

  • List Price: $3,300,000 CAD
  • Gross Sales:
    • 2020: $5,145,236 Annualized
    • 2019: $5,645,066
    • 2018: $4,613,028
    • 2017: $3,524,145
  • Cash Flow:
    • 2019: $857,429
    • 2018: $818,665
  • Assets Included in Purchase*
    • Equipment/Vehicles: $1,780,985: Hydro vacs, combo vacs, tank trucks, straight vacs, water trucks, mobile steamers, pressure trucks, maintenance units
    • A/R: $800,000
    • AP: $300,000
    • Working Capital Included: ~$500,000
    • Intangible Assets: Solid reputation in the region, recurring client base

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

Cash Flow Analysis

Description of Financial StatementP&L Statement
Oct 1, 2019-Aug 31, 2020
P&L Statement
FYE Sept 30, 2019
P&L Statement
FYE Sept 30, 2018
P&L Statement
FYE Sept 30, 2017
Notes
2020201920182017
GROSS SALES$4,716,466$5,645,066$4,613,028$3,524,145
Annualized$5,145,236
Net Income Shown on Financial Statement$583,988$204,072$250,442$241,804
ADDBACKS
Management Salaries$0$0$44,000$21,000
Meals & Entertainment$0$0$0$293
Interest$8,628$20,988$13,067$0
Amortization$0$656,664$487,801$259,064
Interest on Long Term Debt$0$2,885$50,535$26,715
Replacement$-55,000$-60,000$-60,000$-60,000
Personal Fuel$6,600$7,200$7,200$7,200$600/month
Personal Travel$16,500$18,000$18,000$18,000$1,500/month
Owners Employee Benefit Program$2,585$2,820$2,820$2,820$235/month
Cell Phone$4,400$4,800$4,800$4,800$400/month
Dividends$119,500$0$0$0
Health Spending$6,852$0$0$0
TOTAL ADDBACKS$110,065$653,357$568,223$279,892
Seller's Cash Flow = Total Addbacks + Net Income$694,053$857,429$818,665$521,696
Annualized
Profit Margin14.72 %15.19 %17.75 %14.80 %
  • Profit Margin: 15%

Clients

  • Alberta-based oil and gas companies
  • Local utility companies
  • Municipalities

 

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

Services

  • Disposal of drilling waste
  • Turnaround and Industrial Cleaning Services
  • Dust Suppression
  • Culvert Thawing & Flushing
  • Heavy Equipment Washing
  • Rig Cleaning
  • Vegetation Control
  • Hydro Testing
  • Earthmoving & Snow Removal

Personnel

  • 2 Owners
    • General oversight & management
    • Accounting: bookkeeping, accounts payable, payroll
  • 1 Regional Manager
  • 1 Dispatcher
  • 1 Safety Officer
  • 1 Mechanic
  • 2 Junior Mechanics
  • 1 Shop Hand/Assistant (Swamper)
  • 15-22 Operators/Assistants (Swampers)

Growth Opportunities

  • Promote one-stop-shop service offerings
  • Increase truck utilization
  • Hire sales staff
  • Expand into neighboring communities

Funding Example

 

Purchase Price:                $3,300,000 CAD

    18%Buyer Down Payment:        $594,000

    18%Seller Financing:                 $594,000

64%Bank Loan:                      $2,112,000

Seller financing 5-year term at a rate of 4.50% equals a monthly loan payment of $11,074.

Bank loan 6-year term at a rate of 6% equals a monthly loan payment of $35,002.

After business expenses and loan payments, a buyer with a 18% down payment of $594,000 would retain a profit of $258,170, which results in a 43% 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 $3,300,000 with the terms listed above, the coverage ratio is 1.47.

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:

$3,300,000

$
%
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.