Business Overview

Pipe (“Pipe” or the “Company”) is a leading plumbing service provider. The Company’s revenue comes from 60% service and 40% new construction. The Company’s customer mix is 65% residential and 35% commercial plumbing services. Services include Emergency Plumbing, New Construction, Service Plumbing, Water Heater, Sewer Line, and Water Line.

The Company offers services 24 hours per day, 7 days per week, and 365 days per year. A team member is typically deployed within two hours of a phone call, even if received after hours.

The Company works with clients in end markets including Property Management, Education, Parks, Restaurants, and New Construction. The Company has more than 14 years of experience working with many blue-chip clients. The Company serves a regional customer base and has worked to further penetrate additional markets by hiring two new technicians and purchasing two new vans. The Company projects each technician will generate $330K in incremental revenue and $180K in additional net income.

Through Covid-19, the Company showed resilience with both revenue and SDE increasing YOY for the past three years. Pipe’s 2021 revenue and adjusted SDE is $4.24 million and $0.65 million, respectively.

Financial

  • Asking Price: $2,400,000
  • Cash Flow: $650,000
  • Gross Revenue: $4,245,400
  • EBITDA: N/A
  • FF&E: N/A
  • Inventory: N/A
  • Inventory Included: Yes
  • Established: 1996

Detailed Information

  • Property Owned or Leased:N/A
  • Property Included:N/A
  • Building Square Footage:N/A
  • Lot Size:N/A
  • Total Number of Employees:37
  • Furniture, Fixtures and Equipment:N/A
About The Facility:

Two total locations in the Southeast.

Is Support & Training Included:

The seller will provide training and transition support for a negotiated period of time, relevant to the buyer's industry experience.

Purpose For Selling:

Retirement

Pros and Cons:

Demand for the installation of plumbing appliances and pipe-fitting services has historically been dependent on growth in the US construction market, which is generally linked to broader economic health. Over the past several years, new nonresidential construction declined due to COVID-19 (coronavirus) related business closures, which stagnated operations in the commercial sector, the industry's primary market. However, this decline was offset by strong growth in residential construction, the industry's secondary market, where lower lending rates bolstered growth in this sector.

Opportunities and Growth:

Demand for the plumbing industry's services is expected to accelerate over the next five years, after the unexpected outbreak of the COVID-19 pandemic. The re-opening of the economy has led to commercial construction activity and is expected to increase demand for new installation services.

Additional Info

The business was started in 1996, making the business 26 years old.

Why is the Current Owner Selling The Business?

There are all types of reasons why people decide to sell operating businesses. Nevertheless, the genuine factor and the one they say to you may be 2 entirely different things. As an example, they may claim "I have way too many various responsibilities" or "I am retiring". For lots of sellers, these reasons stand. But, for some, these might simply be reasons to try to conceal the reality of transforming demographics, increased competition, current decrease in profits, or a range of other reasons. This is why it is really important that you not depend totally on a vendor's word, however rather, utilize the vendor's answer in conjunction with your overall due diligence. This will paint a much more reasonable image of the business's existing situation.

Existing Debts and Future Obligations

If the current entity is in debt, which lots of businesses are, then you will need to consider this when valuating/preparing your offer. Lots of operating businesses borrow money so as to cover things such as supplies, payroll, accounts payable, etc. Bear in mind that in some cases this can suggest that earnings margins are too small. Numerous organisations fall into a revolving door of taking on debt as a way to pay back other loans. In addition to debts, there may additionally be future commitments to consider. There might be an outstanding lease on equipment or the structure where the business resides. The business might have existing contracts with suppliers that should be fulfilled or may cause charges if terminated early.

Understanding the Customer Base, Competition and Area Demographics

How do businesses in the area draw in new clients? Often times, businesses have repeat consumers, which create the core of their everyday earnings. Certain factors such as new competitors sprouting up around the location, road construction, as well as employee turnover can affect repeat customers and also adversely influence future revenues. One crucial point to take into consideration is the location of the business. Is it in a highly trafficked shopping center, or is it concealed from the main road? Clearly, the more individuals that see the business often, the higher the possibility to construct a returning consumer base. A last idea is the general location demographics. Is the business placed in a largely populated city, or is it situated on the outside border of town? How might the local typical house earnings influence future income potential?