Comm/Res Electrical Contractor. SALES PRICE LOWERED TO 325K FROM 450K!

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Big Work in Progress, Loyal Employees, Developed a Simple Estimating Model
Asking Price:
$325,000

Gross Revenue:
$912,000
Cash Flow:
$264,000
EBITDA:
$264,000
Inventory:
$5,000
included in asking price

FF&E:
$45,000
included in asking price

Real Estate:
 Not Disclosed

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Business Description

13 Year Old Colorado 70% Residential and 30% Commercial Electrical Contractor

The trailing 12 months earnings were 264,496 from revenues of 912,484. The seller is asking for 325K which is now less than 1 1/4 times the trailing 12 months earnings. The time weighted 2 year and 3 years earnings which are the two most common valuation methods both show over 200K in earnings now. That means that this company is priced at less than 2 times the earnings any way you look at it. In addition, he currently has a record amount of contracted future work as proven by almost 450K in work in progress. He likes the work but doesn’t like being an owner. He wants out. This is priced lower than any listing that I have ever represented. It is priced well below the market.

The company provides a full range of electrical services throughout the Denver Metro area. They get plenty of kitchen remodels basements and bathrooms to fill in in between the big projects. They work on both remodels and new construction for high end homes.

The owner is not in the field doing electric work except for very small service calls once in a while. He works out of his house and orders supplies, pulls permits, coordinates inspections, and does the bidding. He has developed a very simple estimating module that can be taught to the new owner relatively quickly. The bidding process is almost entirely “negotiated” work as opposed to competitively bid work based on this companies long term relationship with most of their customers.

He has 4 full time electricians, two journeymen and two apprentices, and two part time. He has 4 full time electricians, two journeymen and two apprentices, and two part time. One employee is ready and capable to be promoted to a foreman and runs his own jobs. The buyer can use the Sellers masters license until they get their own.

The owner believes all of his employees will stay. The employees are very loyal and hard workers and will be a huge asset for the new owner.

The buyer will get approximately 55K in current value assets made up of 3 vans, 1 truck, along with both equipment/tools (and inventory. The company has a great reputation with a long-standing and recurring customer base.

He will help the new owner transition the business for as long as they would like and is confident that it will be a smooth transition. The company has the BBB A+ rating, customers, and reputation. He will sign a non compete and offer full indemnifications.

Location: Denver, CO servicing all of the West Metro Denver Area

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The sales price has been reduced from $450K to $390K and now to $325K which includes all assets debt free. This is priced well below the market. This price is now less than 1 ½ times the trailing 12 month adjusted earnings. The seller will be keeping their cash and accounts receivables and will pay off all debt including the accounts payables so that the business transfers debt free. This is an LLC that files as an S Corp so this can be either a stock or an asset sale.

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Brief Overview and Deal Points:

They specialize in high end electrical contracting of all types. The company has grown historically based on their reputation through a steady long term increase in referrals along with the growth of the population and steady building in their market. They have a normal internet presence with some SEO and website but do not spend a lot on advertising. They have long term relationships with many builders, contractors, business owners, and homeowners.

Growth and Expansion: A new owner can increase advertising, work harder than the current owner, add a full time service electrician, and take on more work. He often turns dow

About the Business

Year Established:
2005
Number of Employees:
10
Facilities:
The business is located in the owners house in Denver. The business has a storage unit that the employees can grab inventory, equipment, etc as needed anytime. He does not believe the new owner will need a location unless they decide to grow this business much larger.
Market Outlook/
Competition:
They specialize in high end electrical contracting of all types. The company has grown historically based on their reputation through a steady long term increase in referrals along with the growth of the population and steady building in their market. They have a normal internet presence with some SEO and website but do not spend a lot on advertising. They have long term relationships with many builders, contractors, business owners, and homeowners.
Growth & Expansion:
A new owner can increase advertising, work harder than the current owner, add a full time service electrician, and take on more work. He often turns down work. The owner could have done a lot more to grow the business but became disillusioned with ownership and customer relations and decided that this was not for him. He believes a new owner with a passion for owning a service industry company that is motivated not just by a salary but also by growing the value of the business will do very well. Their commercial work consists mostly of tenant finishes and service work. There would be plenty of opportunity to hire one service guy just to cover referrals they get from homeowners associations Realtors and past customers.
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About the Sale

Reason For Selling:
Owner wants to pursue other interests.
Training/Support:
Will stay as long as needed.
Seller Financing:
up to 15%

Listing Info

ID:
1516854
Ad Detail Views:
1948

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Business Listed by

Jeff Chapman Eisnaugle

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Sponsoring Broker:

Paul Olsen
Company Brokers
License# ER.040043531

U.S. Census Data for Adams, Arapahoe, Denver and Jefferson Counties, CO
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Source: Decennial Census (2010), United States Census Bureau.

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U.S. Community Survey Data for Adams, Arapahoe, Denver and Jefferson Counties, CO
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Source: American Community Survey (2010-2014), United States Census Bureau.

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