Business Overview

This branded construction product distribution business located in Connecticut operates within an assigned territory using an efficient and proven direct sales network. The business provides a nationally recognized premium quality brand to homeowners, builders, and trade entities on an exclusive basis across a two-state territory of approximately 5 million people through a seasoned sales team with strong management and a support team in place. New Ownership must have an operating partner who will be active in the business and maintain 51% or greater control of the operating entity. Additionally, the new owner (or operating partner) must relocate to and reside in the market territory.

*In addition to the price, the sale of this business will include an appropriate earnout using 2020 as the base.

Financial

  • Asking Price: $12,000,000
  • Cash Flow: $2,936,980
  • Gross Revenue: $18,886,305
  • EBITDA: $2,936,980
  • FF&E: $20,000
  • Inventory: N/A
  • Inventory Included: N/A
  • Established: 2005

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:20
  • Furniture, Fixtures and Equipment:N/A
About The Facility:

The business operates from a 55,000 sq. ft. facility supporting the management, operations and distribution network of the business. The business also maintains a large showroom located in another metro area.

Purpose For Selling:

Retirement

Pros and Cons:

The Direct Distribution Model is a key differentiator in the market sector served by this business, allowing the business to remain solely committed to selling and servicing the brand. This position helps the business to maintain an undisputed position in the market throughout the service area.

Opportunities and Growth:

There is significant growth opportunity since the business actively serves only about 50% of its assigned territory. Additional growth can be achieved through increasing sales representatives in underserved areas as well as through the addition of a showroom in one of the region's largest metropolitan areas. There is also opportunity available to increase sales with new proprietary products offered by the exclusive distribution network.

Additional Info

The venture was started in 2005, making the business 17 years old.

Why is the Current Owner Selling The Business?

There are all sorts of reasons why people decide to sell operating businesses. Nonetheless, the real factor and the one they say to you might be 2 absolutely different things. For instance, they may claim "I have too many other commitments" or "I am retiring". For numerous sellers, these reasons stand. But also, for some, these may just be reasons to try to hide the reality of changing demographics, increased competitors, current decrease in incomes, or a variety of various other reasons. This is why it is really important that you not rely absolutely on a vendor's word, yet instead, make use of the seller's solution together with your general due diligence. This will repaint a more reasonable picture of the business's current situation.

Existing Debts and Future Obligations

If the existing entity is in debt, which numerous businesses are, then you will have reason to consider this when valuating/preparing your offer. Lots of companies take out loans so as to cover points such as supplies, payroll, accounts payable, and so on. Bear in mind that in some cases this can indicate that profit margins are too tight. Numerous businesses fall into a revolving door of taking loans as a way to pay back other loans. In addition to debts, there may also be future commitments to think about. There may be an outstanding lease on equipment or the structure where the business resides. The business may have existing agreements with suppliers that have to be fulfilled or might lead to penalties if terminated early.

Understanding the Customer Base, Competition and Area Demographics

Just how do companies in the area attract new customers? Most times, companies have repeat consumers, which develop the core of their day-to-day revenues. Particular aspects such as brand-new competition growing up around the location, roadway building, as well as employee turn over can affect repeat consumers and adversely influence future earnings. One crucial thing to take into consideration is the location of the business. Is it in a very trafficked shopping center, or is it concealed from the main road? Undoubtedly, the more individuals that see the business on a regular basis, the higher the chance to build a returning customer base. A last idea is the basic area demographics. Is the business located in a largely populated city, or is it located on the outskirts of town? Just how might the neighborhood average household income impact future income potential?