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Underground Drill & Trenching for Cell Carriers

Crisis/recession proof as wireless carriers are essential!



  • Price

  • Revenue

  • Profit Margin

  • Location
    Phoenix, AZ area

  • Service Area
    50-mile radius of the Phoenix area

  • Reason for Sale
    Focus on family

  • Equipment

  • Account Receivable

  • Valuation

  • Lease
    Mobile office, water/power/ telephone, storage for equipment

  • Employees
    8: 1 Supervisor, 1 drill operator, 1 drill locator, 1 excavator, 1 CDL, 1 office, laborers

  • Intangible Assets
    Long-term clients, positive relationships with primary contractors within wide radius of location, low overhead, many potential paths for growth

This dynamic underground trenching company is crisis/recession proof, as wireless carriers are essential! With a consistently high profit margin of 39%, the business provides directional drilling for long-term utility companies and communication carriers. The current owner does no labor and provides bids and oversight. He is willing to stay on for 6-8 months. Nearly 90% of the current work is from drilling for and installing fiber optic cables.  They can also remove existing wiring and complete associated concrete and asphalt restoration projects when able.    Work is typically steady throughout the year and most projects are completed within a 50-mile radius of the Phoenix area. The owner does not do the labor, only oversight and bidding.


The business operates from a leased quarter-acre property that has plenty of room for the mobile office as well as storing equipment.  Eight skilled team members are already in place, including a supervisor, drill operator, drill locater, mini excavator operator, and CDL driver. 


Potential for growth can be found in a few areas.  First, a new owner could capitalize on current resources that allow the team to take on larger or additional contracts throughout the year.  Second, increased focus could be paid to building upon current work for gas utilities as this company receives many inquiries about availability for this specialization.  A third area would be to expand the restoration of concrete and asphalt associated with the current drilling contracts.  With a reasonable investment, this could be a large area for potential growth. 

Business Highlights

  • Year Established: 2013
  • Location: Phoenix, AZ area
  • Service Area: 50-mile radius of the Phoenix area
  • Services: Directional drilling and trenching for underground dry and wet utilities, restoration
  • Clients: Major communications carriers and their primary contractors
  • Lease: Mobile office, water/power/ telephone, storage for equipment
  • Reason for Selling: Focus on family
  • Employees: 8: 1 Supervisor, 1 drill operator, 1 drill locator, 1 excavator, 1 CDL, 1 office, laborers
  • Seller Training Period: 6-8 months
  • Growth Opportunities: Expand resources to take on additional gas work, contracts, or restoration work
  • Current Owner’s Responsibilities: Oversight, bidding, no labor

Financial Highlights

  • List Price: $1,750,000
  • Gross Sales:
    • 2019: $1,404,601
    • 2018: $1,091,921
  • Cash Flow:
    • 2019: $547,458
    • 2018: $427,829
    • 2017: $416,768
  • Assets Included in Purchase*
    • Equipment: $486,000:  Drills, tools, field equipment, vehicles (5), trailers and truck bed (4), excavator (1), ditch witch (2), office equipment and furniture
    • A/R: $55,000
    • Intangible Assets: Long-term clients, positive relationships with primary contractors within wide radius of location, low overhead, many potential paths for growth

*amounts may vary

Cash Flow Analysis

Description of Financial StatementP&L Statement
Tax ReturnTax ReturnTax ReturnNotes
GROSS SALES$1,404,601$1,091,921$1,488,434$1,565,085
Net Income Shown on Financial Statement$495,160$158,348$265,891$346,386
Cell Phone$4,800$4,800$4,800$4,800$400/month
Auto$35,706$50,218$42,914$40,28950% Personal
Travel$1,592$5,582$2,174$5,56050% Personal
Meals & Entertainment$8,430$5,152$6,283$6,311
TOTAL ADDBACKS$52,298$269,511$150,877$141,425
Seller's Cash Flow = Total Addbacks + Net Income$547,458$427,859$416,768$487,811
Profit Margin38.98 %39.18 %28.00 %31.17 %
  • Profit margin 2019: 39%

Typical Clients and Services


  • Major communications carriers
  • Primary contractors
  • Long-term clients


  • Directional drilling
  • Trenching
    • Fiber optic cables (905)
    • Underground utilities
    • Dry utilities
    • Wet utilities
  • Restoration: concrete and asphalt


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


Total Employees: 8

  • 1 Supervisor
  • 1 Drill operator
  • 1 Drill locator
  • 1 Excavator
  • 1 CDL
  • 1 Office (PT)
  • 2+ Laborers as needed

Growth Opportunities

  • Expand resources to
    • Take on additional gas work
    • Additional contracts
    • Additional restoration work

Valuation Details

The Firm Business Brokerage 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 multiple is prescribed 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 multiple.

For this business, the 2019 cash flow was used with a prescribed multiple of 3.2.  With this information, the computation is as follows:

$547,458         x          3.2       =          $1,751,866

The fair market value found above positions the business list price at $1,750,000.

Funding Example

Purchase Price:                          $1,750,000

12.5%Buyer Down Payment:   $218,750

12.5%Seller Financing:            $218,750

75%Bank Loan:                      $1,312,500

Seller financing 5-year term at a rate of 4.50% equals a monthly loan payment of $4,078.

Bank loan 8-year term at a rate of 6% equals a monthly loan payment of $17,248.

After business expenses and loan payments, a buyer with a 12.5% down payment of $218,750 would retain a profit of $291,543, which results in a 133% return on investment in the first year.

A lender is required to have a minimum 1.5 coverage ratio for any business loans extended. At a proposed purchase price of $1,750,000 with the terms listed above, the coverage ratio is 2.14. 

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. 

Purchase Price:



Bank Loan Needed: $


Funding Details


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: $


Fixed Charge Coverage Ratio

The bank will require a minimum ratio of 1.5 to be lendable.

Cash Flow:
2019 Cash Flow
Annual Debt Service: $

Buyer's Net Operating Income (NOI)

The amount of money the Buyer will retain as profit.

Cash Flow:
2019 Cash Flow
Annual Debt Service: -$

Buyer's Return on Investment (ROI)

The rate of return on the Buyer's down payment.

Down Payment: $
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.