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Third Party Logistics, Order, Fulfillment & Manufacturing Support

Foreign Trade Zone on premises!

CASH FLOW
$4,773,570

Specifications

  • Price
    $23,850,000

  • Revenue
    $27,102,334

  • Cash Flow
    $4,773,570

  • Location
    Northern California

  • Service Area
    Nationwide

  • Employees
    125+: Includes CEO, COO, VP, Director of Business Development, HR Director, Accounting Director, plus Project Managers, General Managers, forklift operators, packers, material handlers, warehouse managers

  • Intangible Assets

  • Reason for Sale
    Retired out of state 2 years ago

  • Profit Margin
    17%

 

Foreign Trade Zone on premises! This third-party logistics business has been well-established in Northern California for over 35 years at eight different locations. Providing manufacturing support, warehousing, order fulfillment, transportation management, and customized supply chain solutions, this company has a solid foundation and relationships with government and industry organizations. The team of over 125 highly qualified and experienced personnel includes the leadership team, plus project managers, general managers, forklift operators, packers, material handlers, and warehouse managers. The current owner is retired and lives out of state. The owner is willing to carry a 15% promissory note or equity roll to show invested interested in the business.

 

Manufacturing support includes raw material kitting, lean production line manufacturing, sequencing, build & test process, and vendor managed inventory. Warehousing capabilities are comprised of customized storage options, customized receiving, digital tracking, and temperature stability. The company prides itself on quality order fulfillment by providing product handling expertise, branded packaging, accurate documentation, and they use EDI (Electronic Data Interchange) software to ensure accurate order processing and fulfillment. They have extensive knowledge of packing, crating, and shipment requirements for different countries. Handling transportation needs, whether local, regional, statewide, national, or global, has been one of many ways this business has built a solid reputation. The company meets the needs of well-known high-tech clients and is in the process of expanding business into Pharma programs and specialized designated warehousing for clients.

 

A few growth opportunities would be to expand pharmaceutical accounts, more fully utilize the foreign trade zone on premises, cover more needs of current clients, and develop more dedicated specific warehousing for specific clients.

 

Business Highlights

  • Year Established: 2004
  • Location: 8 locations in Northern California with nationwide service area
  • Services: Manufacturing support, warehousing, order fulfillment, transportation management, supply chain solutions
  • Clients: Domestic and international clients ranging from manufacturing to technology to pharmaceutical
  • Typical Contract Length: 3-5 years; two major contracts overs 15 years, several over 10 years
  • Certifications: Foreign Trade Zone (FTZ), 3PL Provider – Pharam, Western Regional Minority Supplier Development Council – Minority Business Status, Supplier Clearing House—Minority Business Enterprise, ISO 9001:2015 and TSA Certified
  • Reason for Selling: Retired out of state 2 years ago
  • Personnel: 125+: Includes CEO, COO, VP, Director of Business Development, HR Director, Accounting Director, plus Project Managers, General Managers, forklift operators, packers, material handlers, warehouse managers
  • Seller Training Period: 12-18 months, if desired
  • Growth Opportunities: Expand pharmaceutical accounts, more fully utilize the foreign trade zone on premises, cover more needs of current clients, and develop more dedicated specific warehousing for specific clients
  • Current Owner’s Responsibilities: Retired, lives out of state

Financial Highlights

  • List Price: $23,850,000
  • Gross Sales:
    • 2020: $27,102,334 Annualized
    • TTM: $26,471,307
  • Cash Flow:
    • TTM: $4,773,570
  • Assets Included in Purchase*
  • Equipment: ~$3.3M Office equipment, furniture, fixtures, computers, medical equipment, trade shows equipment, tractors & trailers, forklift & generator A/R: $3.5M on average

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

Cash Flow Analysis

Description of Financial StatementP&L Statement
August 2019-July 2020
P&L Statement
2019
Tax ReturnTax ReturnTax ReturnNotes
TTM (excluding December)Statement 201820172016
GROSS SALES$27,753,003$40,175,397$68,544,313$60,625,391$49,788,992
Net Income Shown on Financial Statement$4,059,093$4,774,639$7,415,590$3,107,320$2,342,983
ADDBACKS
Compensation to Owner$0$150,000$151,040$250,771$157,572Lives out of state; no replacement needed; President in place
Depreciation$27,822$0$599,994$1,823,061$2,108,317
Interest$0$38,229$160,860$171,511$64,848
Depreciation & Amortization$0$704,353$0$0$0
11% Tax on total W2 Salaries$0$16,500$16,614$27,585$17,333
One-Time Income$-229,000$-229,000$0$0$0One-time favorable income as a result of discontinued operations - due to recaptured depreciation and reserve accounts being closed
COVID Expense$200,000$0$0$0$0April & May contain approximately $100,000 each in one-time COVID related expenses that were not reimbursed by customers
Commission $715,655$753,499$0$0$0
TOTAL ADDBACKS$714,477$1,433,581$928,508$2,272,928$2,348,070
Seller's Cash Flow = Total Addbacks + Net Income$4,773,570$6,208,220$8,344,098$5,380,248$4,691,053
Profit Margin17.20 %15.45 %12.17 %8.86 %9.42 %
  • Sellers Cash Flow Analysis: 2018 was an abnormally high revenue year. During the last 2 quarters of 2017 and all of 2018, the company supported one customer’s requirements for a project during a huge ramp-up that required the company to 1. Add 400 employees 2. Add an additional 3rd shifts 3. Purchase and operate 4 VLM (vertical life machines systems) and 2 mobile robots. That project has moved to another providers. The company continues to support the customer.

Clients

  • Large international clients ranging from pharmaceutical to manufacturing

 

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

Services

  • Manufacturing Support
  • Warehousing
  • Order Fulfillment
  • Transportation Management
  • Customized supply chain solutions

Personnel

  • 125+: includes CEO, COO, Vice President, Director of Business Development, HR Director, Accounting Director, plus Project Managers, General Managers, forklift operators, packers, material handlers, warehouse managers, etc.

Growth Opportunities

  • Expand to low-tech industries that don’t require special certifications

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, the TTM cash flow was used with a prescribed multiple of 5.  With this information, the computation is as follows:

$4,773,570    x          5       =          $23,867,850

The fair market value found above positions the business list price at $23,850,000.

Funding Example

Purchase Price:                           $23,850,000

 

Seller is willing to carry a 5% Promissory Note or Equity Roll

*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 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.