If you believe the HRM has a bright future ahead for new homes and commercial construction, then we're certain you'll find this top-tier long-standing paving company to be well-positioned to transition to a new owner. A few highlights that make this 20+ year old company an attractive option:
1. Supportive owner transition plan - a new owner coming can be assured the business is well-known and that it is not just about the owner or pricing, it's about reputation of the company name.
2. High quality fleet of equipment with excellent terms and conditions, strong equity value. Little to no need for anything for 10 years.
3. Opportunity to get into commercial snow removal, given the equipment package. None has ever been done previously.
4. Strategic buyers can quickly find economies of scale within operations and equipment usage.
5. Solid staffing complement who are well-trained and capable of handling all aspects of the daily operations.
The company caters to both residential and small commercial projects. It has worked hard to instill quality policies and processes that have helped it earn the trust of its customers. Its reputation has created a sense of loyalty for the work they do.
The ideal new owner is someone who is ready to take the business to the next level, having some knowledge in management and/or construction. Seller will support and train on all aspects, as required.
The sale is structured as a sale of 100% of the authorized and issued share capital of the company. Working Capital shall be adjusted at $0. By completing the NDA and becoming a qualified buyer, we'll be happy to send you a full Offering Memorandum that will answer most, if not all, of your questions.
Annual Revenues and Seller's Discretionary Earnings (Fiscal Year End is Dec. 31):
2022 (as of Nov. 17)
Revenue: $2,130,000
SDE: $418,000
2021
Revenue: $1,825,000
SDE: $340,000
2020
Revenue: $1,580,000
SDE: $205,000
All equipment included with sale, debt to be taken over as well. Cost new was in excess of $1.1M+HST, debt owing is just over $600k. Little to no need for anything for 10 years.
* SDE is calculated with the inclusion of a Fair Market Value rent expense of $15,000. SDE is after $15,000 rent expense. As well, we have included a $110,000 "Sustaining Capital" expense, which is more than sufficient to own and maintain the same quality of equipment in place today.
** Seller's Discretionary Earnings (“SDE”) is a calculation of the total financial benefit that a single full time owner-operator would derive from a business on an annual basis. SDE is the pretax and pre-interest profits, before non-cash expenses, owner's benefits, one time investments, and any non-related income or expenses. SDE may require that expenses be adjusted if a new owner (Purchaser) will necessarily need to take on a new expense. SDE is also referred to as Adjusted Cash Flow, Total Owner's Benefit, Seller's Discretionary Cash Flow, or Recast Earnings.
** Our expectations are for a minimum 40% down payment on the final negotiated purchase price. Feel free to run some of your own calculations here:
https://www.bdc.ca/en/articles-tools/entrepreneur-toolkit/financial-tools/business-loan-calculator
The business requires approximately 7,500 sft - 10,000 sft of yard space for equipment storage, and a shipping container. We expect $15,000 a year would be more than sufficient to cover this cost.
Purchaser will be required to obtain their own storage space prior to closing. Can easily operate from a home office.
