Listing ID: 83954
Business Overview
This long-time family-owned plastic extrusion business has been a model of consistent performance over its 45+ years of extruding parts. That lengthy and impressive history is due in part to the business being managed by the same family members for more than the last 40 years. The owners are now at retirement age, and they look forward to retiring after selling the company and overseeing an orderly transition to new ownership.
The business occupies an attractive late model 36,875 square foot located on 7 acres in a desirable community in northeast Indiana. The business boasts easy access to major freeways. The real estate, owned by the sellers, may be leased with a favorable rent structure or purchased in a separate transaction.
The business is a two-shift operation employing an experienced, skilled, non-union 12-person work force. The company extrudes a wide variety of parts and tooling for businesses in virtually every industry segment. Competitive advantages exist in pricing and a multitude of capabilities provided by the wealth and variety of the company’s vast stable of machinery and equipment which have a fair market value in excess of $700,000.
The business has an unparalleled commitment to customer service and to fabricating high quality parts and tooling exactly to specifications and of course shipped defect free and on time. As one would expect, the company enjoys a significant amount of repeat business. The reputation of the business is so strong that a steady flow new customers are generated through referrals from current customers thereby eliminating the need for any meaningful sales and/or marketing efforts.
For a growth minded buyer, there would seem to be obvious growth opportunities by expanding the customer reach beyond the 500 miles radius in which most of the company’s current customers operate.
For the past five years, the business has had average revenues of $2.5 million and a (weighted) average annual SDE (the historical, normalized cash flow to pay an owner-operator and service debt) of $230,000. The business is being aggressively offered for $880,000, a favorable 3.8x multiple of average SDE. The offering price includes the above mentioned $700,000 of machinery and equipment. The sellers contemplate an asset sale with the sellers retaining cash and A/R while retiring all liabilities. For qualified buyers a meaningful seller note will be available. Additionally, the sellers are willing to adjust their post-close tenure to accommodate the transition preferences of the successful buyer.
For more information on this very attractive niche business opportunity, please contact Steve Kandt (steve@praxisbb.com).
Financial
- Asking Price: $880,000
- Cash Flow: $230,000
- Gross Revenue: $2,500,000
- EBITDA: N/A
- FF&E: $700,000
- Inventory: N/A
- Inventory Included: N/A
- Established: 1976
Detailed Information
- Property Owned or Leased:Own
- Property Included:N/A
- Building Square Footage:36,875
- Lot Size:N/A
- Total Number of Employees:12
- Furniture, Fixtures and Equipment:N/A
An attractive late model 36,875 sf facility located on 7 acres in a desirable community in northeast Indiana.
Owners will provide post closing training and transition. A consulting arrangement can be made to extend their post-closing involvement.
Retirement
Additional Info
The company was started in 1976, making the business 46 years old.
The company has 12 employees and is located in a building with disclosed square footage of 36,875 sq ft.
Why is the Current Owner Selling The Business?
There are all sorts of reasons people resolve to sell operating businesses. Nonetheless, the genuine reason and the one they tell you might be 2 absolutely different things. For instance, they may claim "I have a lot of various commitments" or "I am retiring". For numerous sellers, these factors are valid. But also, for some, these might just be reasons to try to conceal the reality of altering demographics, increased competition, current decrease in revenues, or a range of other factors. This is why it is very important that you not depend entirely on a vendor's word, but rather, utilize the seller's solution in conjunction with your general due diligence. This will paint an extra reasonable picture of the business's present circumstance.
Existing Debts and Future Obligations
If the current company is in debt, which many businesses are, then you will have reason to consider this when valuating/preparing your offer. Lots of businesses take out loans with the purpose of covering things like supplies, payroll, accounts payable, and so on. Remember that in some cases this can imply that profit margins are too tight. Numerous companies fall under a revolving door of taking loans as a way to pay back various other loans. In addition to debts, there may likewise be future obligations to consider. There might be an outstanding lease on tools or the structure where the business resides. The business may have existing agreements with vendors that need to be satisfied or may result in fines if terminated early.
Understanding the Customer Base, Competition and Area Demographics
How do operating businesses in the area draw in new clients? Many times, operating businesses have repeat consumers, which create the core of their daily earnings. Certain elements such as new competition sprouting up around the area, roadway building and construction, and also employee turn over can impact repeat customers as well as adversely influence future revenues. One essential point to consider is the location of the business. Is it in a very trafficked shopping center, or is it concealed from the highway? Obviously, the more people that see the business regularly, the better the chance to build a returning client base. A final idea is the general area demographics. Is the business situated in a largely inhabited city, or is it situated on the edge of town? Exactly how might the neighborhood median household income effect future revenue prospects?
