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28 Yr Old Comm HVAC & Added Plumbing, BBB A+, Long Term Employees

Denver, CO (Adams County)

Seller Financing Available
28 Yr Old Comm HVAC & Added Plumbing, BBB A+, Long Term Employees
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Asking Price: $890,000

Cash Flow: $393,000

Gross Revenue: $4,900,000

EBITDA: $393,000

FF&E: $135,000

Inventory: $25,000*

Rent: $5,000 /Month

Established: 1991

*not included in asking price.

28 Yr Old Comm HVAC & Added Plumbing, BBB A+, Long Term Employees

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Business Description

Great Reputation for Safety, Quality & Reliability, Many Ways to Grow

28 Year Old Denver Commercial HVAC Company with 70% Recurring Revenues

The trailing 12 months earnings through September 30 2019 were 393K from 4.9M in revenues. The 2018 earnings were 394K from revenues of 2.9M. The sales price has been set at 890K which makes the sales price just over two times the earnings which is very low for a company with this much in long term recurring revenue.

The buyer will get approximately 135K in hard assets made up of 8 vehicles customized for their industry, a trailer, and a lot of tools and equipment.

They have a long-standing, diversified, and mostly recurring customer base. Their customer base includes very large household local names of both businesses, Cities, and Government entities. They have no outgoing advertising or sales people and rely on their reputation, referrals, and current customers. He believes that it should be easy for a new owner to grow substantially.

This is a business that needs an owner with new energy who wants to grow the business again. The new owner does not need any licenses. The current owner didn’t have any and his employees already have all of the necessary licenses which the new owner can use also. It is recommended that the new owner obtains the basic local licenses including a construction license from the City of Denver which will take 6 months or less. For a Buyer with the right aptitude and/or experience, this business has the location, employees, equipment, reputation, and customers to grow significantly in the future.

The current owner charges 98 dollars per hour for labor and 150 dollarsper hour for emergence services which is exactly the same rate he inherited 4 ½ years ago. In other words, in a time of rising employee and material cost while all other similar companies have raised their rates, he hasn’t. This is an easy way to increase profits. Most of the companies that I have analyzed or represented are currently charging 20 percent or more than they are.

The seller is asking for 890K plus inventory estimated to be 25K with 90% down at the closing. He will be keeping his cash and accounts receivables and will pay off all debt including the accounts payables so that the business transfers debt free. It is an C Corp so this can be either a stock or an asset sale.

Location: They are located just off near Santa Fe and I25 allowing them to cover all of Denver Metro including Boulder and Castle Rock

Brief Overview and Deal Points:

This company has long term maintenance contracts which are highly profitable and predictable. The company has 4 full time technicians that now service these full time. This is also a easy area to grow because it is an easy cold call: They are 5 star Google rating, lower rates than most of the industry, long term experienced technicians, etc. They also do new construction, remodels, normal service calls including emergency calls 24/7 at a much higher billing rate, and commercial hydronics. The emergency calls go directly to his managers and not to the owner. They have also started doing plumbing through an independent contractor and are considering hiring a master plumber. The buyer will step into a solid pipeline of recurring revenue proven by the fact that the owner doesn’t spend money on advertising. It is a referral based business. They are about 95% commercial and 5% residential with 70% of their revenues coming from previous customers. They have many long term customers that continually expand, add locations, or require service. They just answer the phone. Their unparalleled experience, competitive pricing, and overall value set them apart from their competitors. Their technicians are dedicated to installing reliable systems and improving air quality.

They are paperless with every employee using an iPad though Verizon which has improved customer service, the tracking of previous work done for a customer, and billing. The hard assets are made up of 135K in equipment including 8 trucks and a trailer Plus, they have an estimated 25K in inventory which is extra.

Growth and Expansion: The company could grow by adding a salesperson, advertising, or by just taking more jobs. They do virtually no advertising; the P & L though September of this year shows 4K in advertising which is less than 1 percent of revenues and don’t even have the name of the company on the side of their trucks. There are many ways a new owner can improve this business. The current owner has 2 other businesses and through the growth of all 3, he was forced to make a choice. A new owner can dedicate 100 percent of their time to take advantage of their reputation and grow this much larger quickly.

The owner will sign a non-compete. He is willing to transition the business and can teach the new owner how to run the business and how to grow it. In fact, the business will not change on bit the day after the closing. Industry experience is recommended. There are no required specific licenses, the owner just pulls permits in each municipality which he can teach the new owner how to do.

The business has very loyal and long term employees. There is a service manager,estimator and 15 employees. Many of the employees have been there a very long time. The employees are all hourly ranging from 32 per hour to 35 per hour plus benefits which includes a 6 percent 401K match and the company pays for their health insurance premiums. This creates loyalty and is part of the reason the employees are trustworthy, competent, and reliable.

Their location is located close to the middle of Denver just off of two of Colorado’s busiest highways for easy access to the entire city. Their space is being offered for lease at 5,000 per month triple net. The building is owned by the owner of the business and will offer a long term lease with extensions. Their space is just over 6,000 square feet and has plenty of parking.

They have a great reputation for safety, quality, and reliability. The seller will agree to full Reps and Warranties to a solid legal and business standing. They have a great record for safety (OSHA) as proven by their low workman’s comp MOD rate. They have had no regulatory issues, no lawsuits, and no issues with the city, county, or municipality that they are in. They are also 5 star rated on Google and A+ rated with the Better Business Bureau. They are proud that they have non-commission based technicians whom put the customer first.

Plus, Colorado is the best State in the country to own a business. Colorado is the "#1" fastest growing and strongest economies in the United States.

Please Call of Email for Information: The broker is available at any time to discuss your interest in this offering and can set up a meeting either in person or by phone with the owner(s). Thank you for your interest.

Thanks for your Consideration,

Jeff Chapman Eisnaugle
Direct 303-905-7607
Office 303-284-7025
Fax 720-524-6482
jce@companybroker.com

Detailed Information

Location:
Denver, CO
Inventory:
Not included in asking price
Real Estate:
Leased
Building SF:
6,000
Lease Expiration:
N/A
Employees:
17
Furniture, Fixtures, & Equipment (FF&E):
Included in asking price
Facilities:
Their location is located close to the middle of Denver just off of two of Colorado’s busiest highways for easy access to the entire city. Their space is being offered for lease at 5,000 per month triple net. The building is owned by the owner of the business and will offer a long term lease with extensions. Their space is just over 6,000 square feet and has plenty of parking.
Competition:
This company has long term maintenance contracts which are highly profitable and predictable. The company has 4 full time technicians that now service these full time. This is also a easy area to grow because it is an easy cold call: They are 5 star Google rating, lower rates than most of the industry, long term experienced technicians, etc. They also do new construction, remodels, normal service calls including emergency calls 24/7 at a much higher billing rate, and commercial hydronics. The emergency calls go directly to his managers and not to the owner. They have also started doing plumbing through an independent contractor and are considering hiring a master plumber. The buyer will step into a solid pipeline of recurring revenue proven by the fact that the owner doesn’t spend money on advertising. It is a referral based business. They are about 95% commercial and 5% residential with 70% of their revenues coming from previous customers. They have many long term customers that continually expand, add locations, or require service. They just answer the phone. Their unparalleled experience, competitive pricing, and overall value set them apart from their competitors. Their technicians are dedicated to installing reliable systems and improving air quality.
Growth & Expansion:
Growth and Expansion: The company could grow by adding a salesperson, advertising, or by just taking more jobs. They do virtually no advertising; the P & L though September of this year shows 4K in advertising which is less than 1 percent of revenues and don’t even have the name of the company on the side of their trucks. There are many ways a new owner can improve this business. The current owner has 2 other businesses and through the growth of all 3, he was forced to make a choice. A new owner can dedicate 100 percent of their time to take advantage of their reputation and grow this much larger quickly.
Financing:
10%
Support & Training:
The owner will sign a non-compete. He is willing to transition the business and can teach the new owner how to run the business and how to grow it. In fact, the business will not change on bit the day after the closing. Industry experience is recommended. There are no required specific licenses, the owner just pulls permits in each municipality which he can teach the new owner how to do.
Reason for Selling:
The current owner has 2 other businesses and needed more time.
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Jeff Chapman Eisnaugle

Business Listed By:
Jeff Chapman

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Sponsoring Broker:
Paul Olsen

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