Commercial Piping Contractor – Non-Union

Summary: Piping contractor installs pipe systems and does plumbing work in commercial buildings. Typical work is installing sanitary drains, water supply, process piping and similar jobs.  The company does not install fire sprinkler systems.  It works on small- to medium-size jobs with a typical job size of $50,000 to $100,000.  Therefore, this minimizes risk and helps smooth cash flow for the owner.

Organization: The company is well organized with 40 full-time employees.   There are experienced pipe fitters and job superintendents, estimator, purchasing agent, billing and paying clerks, and admin people.  The owner does business development, sales, walks the jobs, guards the profit margins and oversees the company. He is not a pipe fitter or plumber, but considers his primary skill to be business development.  The company is a California C corporation with two shareholders:  the president and a silent partner.

Facilities:  The company leases a centrally located office/warehouse property. Office workers use the front offices; small tools and equipment are stored in the back. It is located in the Silicon Valley area of the San Francisco Bay Area. Commercial real estate construction is booming.  It has a fleet of trucks which mostly go home with employees.

Business Development:  The company maintains relationships with general contractors who subcontract work to the company.  There are many more available if a new owner chooses to grow the business. Direct customers for new construction, remodeling and maintenance work include hotels and commercial property management companies.  the owner founded the company 20 years and has an excellent reputation.

Financial Summary:  Revenues for 2016 were $6,861,941 with Sellers Discretionary Earnings of $1,097,517.  The owner is selling to gradually move out of the area for a more relaxed pace of life. He is willing to stay on as operations manager for 1 or more years.  He will do most of the work he presently does for a year for the industry standard compensation.  He is also willing to be Responsible Managing Employee if the buyer does not have a contractor’s license.  The owners are asking $1.8 million excluding cash, receivables, deposits and liabilities.  Business will be delivered free and clear to facilitate financing. Owners may carry a note for a portion of the purchase price but won’t be the primary source of financing.

Down Payment: $450,000

Total Sales: $6,861,941

Cash Flow: $1,091,517

EBIT: $658,631

EBITDA: $891,517

Accounts Receivable: $1,000,000

FFE: $200,000 (Included in Price)

Inventory: $10,000

Terms and Conditions?:

25% down, SBA + Seller Note

Reason For Sale:

Retiring

Training & Support:

4 weeks 20 hours a week. Also willing to work as Operations Manager for up to one year and be Responsible Managing Employee for the contractor's license.

Year Established: 1997

Year of Last Acquisition: 1997

Days & Hours of Operation: Monday-Friday 7:00 AM to 3:30 PM

Owner Hours Per Week: 40

Non-Owner Payroll: $3,200,000

Employees: 40 Full-time

Managers: 2

Security on Lease: 2758

Monthly Rent: 2758

Type of Location: Leased

Square Footage: 2450

Relocatable?: Yes

Facilities Information:

Leased office warehouse near intersection of two major freeways in the heart of Silicon Valley.

Historical Summary:

Owner founded in 1997.

Owner Qualifications:

Business management, marketing & sales, estimating, contracting, supervision of employees, understand financial statements, cash management.

Competition:

Only a few similar companies in the area.

Potential Growth:

The market is large and the metro area has 90 cities & 7 million population.  The company only covers a fraction of the San Francisco Bay Area presently, so there is room to grow.

Financing/Terms:

25% down, SBA 65%, Seller Note 10%