Return To Opportunities List

Opportunities

Technology Solutions & Lifecycle Management – 450+ Clients

With $240k in recurring monthly revenue – average sale size is $1.7M!

CASH FLOW
$2,017,487

Specifications

  • Price
    $4,150,000

  • Revenue
    $16,611,484

  • Cash Flow
    $2,017,487

  • Location
    Twin Cities

  • Service Area
    Local (75%), regional (10%), and national (15%)

  • Reason for Sale
    Looking to grow the company by leveraging areas out of the owner’s expertise

  • Employees
    39 FT W2 employees; 4 Admin, 6 in Operations, 10 in Sales, 19 in Service

  • Intangible Assets
    Strong recurring client base, word-of-mouth referrals, well-established in the industry & region

  • Equipment
    $161,000

With $240k in recurring monthly revenue and an average sale size of nearly $1.7M, this IT management company has been established in the Twin Cities area for nearly 30 years! Serving clients locally (75%), regionally (10%), and nationwide (15%), this business offers a variety of technology services & products. Services include technology lifecycle management, IT staffing, cloud solutions, data storage, data security & remote access, and web services; they also provide new & re-certified equipment from leading manufacturers, as well as sales, repair, maintenance, and installation of windows desktops and servers. A highly-skilled team of 39 employees consists of 6 in Operations, 4 in Admin, 10 in sales, and 19 in the service department. They cater to each customer’s specific needs for their company and implement customized IT solutions and services. Clients are in a variety of industries such as education, financial, healthcare, insurance, and manufacturing; of their 450+ clients, 288 of them purchase $1k or more per year, 122 of them purchase $10k or more, and 24 purchase $100k or more annually. 2021 is on track to be a record year for this business, as the remote workforce is now entrenched in the workplace – this business will see double digit growth for the foreseeable future.  

 

Based out of an 18k sq. ft. building, 9,000 sq. ft. is used for warehouse/production space, while 4,500 sq. ft. is office space; the remainder is rented by tenants. Assets include $161k of equipment – PC’s, notebooks, servers, SAN’s, network gear, warehouse equipment, and office furniture & fixtures. The current owner handles HR, Finance, AP, AR, policies & procedures, and contracts, and is willing to stay on board for 1-5 years to help grow the company.

 

Priced at $4,150,000, this business already has a strong recurring client base, word-of-mouth referrals, and an extremely well-established name in the industry and the region. Marketing is the key to organizational growth; better SEO, email campaigns, lunch & learns, etc. would generate more client interest and boost revenue.

Business Highlights

Year Established: 1992

Location: Twin Cities

Service Area: Local (75%), regional (10%), and national (15%)

Services: Managed IT services, lifecycle management, IT staffing, cloud solutions, data storage, data security & remote access, web services, assistive & adaptive technology, providing hardware & software, sales, repair, maintenance, &  installation of windows desktops & servers

Clients: Companies in a variety of industries: Education, Financial, Healthcare, Insurance, & Manufacturing

Lease: 18k sq. ft. building; 9k is warehouse/production space, 4.5k is office space (7 offices, 2 meeting rooms); the remainder is rented by tenants – Rent is $12k/month

Reason for Selling: Looking to grow the company by leveraging areas out of the owner’s expertise

Personnel: 39 FT W2 employees; 4 Admin, 6 in Operations, 10 in Sales, 19 in Service

Seller Training Period: 1-5 years

Growth Opportunities: Generate more client interest through better SEO, email campaigns, lunch & learns, etc.

Current Owner’s Responsibilities: HR, Finance, AP, AR, policies & procedures, contracts

Financial Highlights

  • List Price: $4,150,000
  •  

    • 2-Year Average Cash Flow (2020-2021): $1,076,517
    • Estimated Working Capital: $500k

Business Assets

Assets: $161,000

Equipment: $161,000: PC’s ($40k) Notebooks ($18k), Servers ($45k), SAN ($18k), Warehouse Equipment ($15k), Furniture & Fixtures ($25k)

Software: ConnectWise, Kaseya, QuickBooks, Enterprise, VarStreet

Backlog: $2,550,000

Pipeline: $1M

Intangible Assets: Strong recurring client base, word-of-mouth referrals, well-established in the industry & region

Cash Flow Analysis

Description of Financial StatementP&L Statement
Jan-Aug 2021
P&L Statement
Accrual
Tax Return
Accrual
Tax Return
Accrual
Notes
2021202020192018
GROSS SALES$11,074,323$13,084,939$13,683,103$9,150,654
Annualized$16,611,484
Net Income Shown on Financial Statement$1,101,426$179,478$167,706$112,726
ADDBACKS
Compensation to Owner$102,816$108,354$108,304$124,510Owner
Other unrelated Salaries$71,100$116,282$100,000$100,000Owner's Spouse
11% Tax on total W2 Salaries$19,131$24,710$22,913$24,696
Depreciation$0$0$5,000$0
Amortization$0$0$8,401$0
Meals & Entertainment$5,308$13,281$14,154$10,558
Meals$0$0$0$556
Contributions/Donations$0$5,000$0$0
Owner's Insurance$13,333$20,000$20,000$20,000$10k/year - Health, $10k/year - Life
Cell Phone$3,200$4,800$4,800$4,800$400/month
Owner's Travel$2,666$4,000$4,000$4,000$4k/year - personal
Pension/Profit Sharing$0$0$29,897$0Line Item 17 - To Owners
Replacement$-53,333$-80,000$-80,000$-80,000
Owner's Pest Control$0$1,000$1,000$1,000
Owner's Cash$0$24,000$24,000$24,000
Management Bonus$0$100,000$82,762$50,000
Owner's Personal Supplies$0$3,352$945$1,177
Owner's Professional Fees$49,970$127,000$22,845$2,100
Owner's Repair & Maintenance$25,363$23,920$23,790$14,100
Travel$4,011$7,865$5,232$1,938
COGS Write-off$0$125,000$0$0One-time expense
TOTAL ADDBACKS$243,565$628,564$398,043$303,435
Seller's Cash Flow = Total Addbacks + Net Income$1,344,991$808,042$565,749$416,161
Annualized
Profit Margin12.15 %6.18 %4.12 %4.55 %
  • Covid resulted in a small dip in 2020, less than 5%. 2021 is on track to be a record year.

Valuation

Funding Example

Purchase Price:

$4,150,000

$
%
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:
2-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:
2-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: %

Attachments

Document Title / Description

This folder is empty.

Access to this Deal Room is restricted

Would you like to access the deal room?

Yes, please

Interested in
this business?

Complete the following information to sign an NDA and see more details!

Already have an account? Log in here.

Click to download NDA form

Print, sign and send to:

210 N 78th St. 2nd Floor
Omaha, NE 68114

Or fax to:

f 402.939.0857

Thinking of Selling?
When selecting an M&A firm, please use the following Scorecard: click here for our M&A Scorecard


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.