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Equip Rental, Price Equal Assets, 903K Earn, Big Equity Bld Potential

Glenwood Springs, CO (Garfield County)

Seller Financing Available
Equip Rental, Price Equal Assets, 903K Earn, Big Equity Bld Potential
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Asking Price: $2,300,000

Cash Flow: $903,000

Gross Revenue: $4,000,000

EBITDA: $903,000

FF&E: $2,239,000

Inventory: $2,175,000

Real Estate: $2,150,000*

Established: 2003

*not included in asking price.

Equip Rental, Price Equal Assets, 903K Earn, Big Equity Bld Potential

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Business Description

Can Lease or Buy the Real Estate! High Recurring Rev, Loyal Employees

The biggest reason this is still available is that the Seller has required that the real estate be purchased at the closing with the business. For the first time, he has agreed to allow the property to be leased. Since this a location driven business, the buyer of the business will most likely still want to buy the property so the Seller will allow the buyer to have both a long term lease and exclusivity to buy the property for up to 2 years post closing.

The earnings makes this an inexpensive business but he has to sell based on his age, health, increasing amount of time spent in Alaska, etc. The business is being offered for the current value of all of the assets. The total current value of the vehicles and rental equipment is 2.15M which are the foundation of the total value of all of their assets of 2.3M which also includes furniture, office supplies/misc, small tools, parts, and other shop supplies. 2018 had revenues of 4.48M in revenues and 953K in earnings.

I made the Seller get rid of his floor plan for new dealership sales because a new buyer could not get a bank loan approved because the bank required that all revenue generating assets be available to a 1st position. This has meant that his dealership sales are down over the last 2 years. A new buyer will almost certainly add a floor plan very soon after a closing to bring back their dealership sales. The other factor effecting their earnings is that the owner is retiring and has not been willing to add any rental equipment. The demand is so high that he was forced to add around 200K worth of rental equipment to keep a couple of customers happy. The Seller knows this business needs another 800K in rental assets based on the current demand which can be bought on credit and will increase profits right away. He has told his employees this is for sale and a new buyer will have the ability to discuss this with his salesman who has been very vocal about this. In short, there are 3 reasons this company is not showing larger revenues and profits: the owner spends over 5 months during peak season in Alaska, he is undercapitalized in rental equipment, and his dealership sales dropped a lot after getting rid of his floorplan. A new buyer can fix all 3 quickly.

The business has seen an increase in revenues from construction rentals by focusing more on Rental Income from the Roaring Fork Valley. He has a full time salesman doing a great job increasing rentals currently. They are one of the closest medium equipment rental/sales company to the 47 mile long roaring fork valley that extends from Glenwood Springs all the way to Aspen where there is a lot of construction taking place. Permits are running at an all-time highs in Garfield, Pitkin, and Aspen Counties.

There is no better time to buy this company than right now. Banks will loan on this business and are requiring 20% down(not 10% unless they have direct experience already) and some additional working capital for well qualified buyers. Jeff

For Sale:

WESTERN CO MEDIUM/HEAVY EQUIPMENT COMPANY

2018 had revenues of 4.48M with normally adjusted earnings of 952K before any add backs for the seller spending 5 peak summer months in Alaska every year. 2019 is looking slightly below 2018. 2020 should have a stronger and more profitable base than 2019 because of the current demand they are seeing with some additional capitalization from the Seller in the late summer/fall and what a new buyer should buy. Demand for the rental equipment is not an issue.

The current value of the assets are currently at 2.3M which is broken up by office supplies/misc, shop supplies, small rental equipment, parts, and vehicles/large rental equipment. He is offering the company for 2.3M. Keep in mind that Heavy Equipment rental companies are location driven and have one of the easiest to liquidate assets of all companies which is why they typically sell for 4 times their earnings or more. This is an inexpensive company selling for less than 2 3/4 times its earnings.

Many long-standing customers with big names along with hundreds of other long-term customers has resulted in a high percentage of recurring business. Plus, western Colorado has some of the largest Natural gas deposits in the country including one literally just a couple of miles from their location. Natural gas activity will most likely increase dramatically in western Colorado with new pipeline(s), democrats getting back into office whom prefer natural gas to coal, and prices firming up.

Equipment companies are typically “Fun” businesses to own.

The owner spends 19 weeks in Alaska mining gold during peak season every year. This negatively impacts the bottom line by at an estimated 250,000 dollars a year which means they should have made at least 1.15M last year. In fact, he takes 22 weeks off a year. A new owner will be able to grow this company by being there and focusing on growth.

Location: Western CO along the I70 corridor

The seller seeks the current value of his assets which is 2.3M plus can either lease or buy the real estate at the lesser of 2.15M or appraised value. Recurring revenue always deserves a premium and this company has a high percentage of recurring revenues based on its location, customers, and reputation. 100% of the sales price will be covered by the current value of the assets. This can be either a stock or asset sale. It is priced as a stock sale with the owner keeping his cash and collectable AR while paying off all of the debt.

Brief Overview and Deal Points:

This is an equipment, truck and trailer sales, customization, and equipment rental business that sells/rents to construction companies, energy companies, ranchers, and developers. They can find, customize, rent, or sell anything a buyer would need at competitive pricing with good margins. They are the only medium to heavy equipment sales and rental company for 20 miles in every direction in the heart of Western Colorado’s energy development, Colorado’s ranching, and fast growing mountain towns. Oil and Gas production dropped substantially in the late 2000’s and has still not recovered but new natural gas wells are still being drilled and the local economy is starting to improve again. The buyer will also step into a solid pipeline of recurring revenue because of their operating model and location. The company has below average overhead for their size and has relationships with some suppliers that allows them to carry some inventory on consignment which frees up working capital and saves them money. They also have a semi exclusive relationship with Dragon which is a subsidiary of Ranco and supplies oil field equipment.

This company has never had a lower sales price. There is no better time to buy this company than right now. He has a full time salesman doing a great job increasing this currently.

In early July 2019, the estimated natural gas reserves were increased dramatically as you will see from an article you can read in the detailed sales package. This should result in activity increasing in the area an increase the possibility of the approval of the Jordan Cove pipeline or any other improvement in their distribution costs. The Jordan Cove pipeline would provide a pipeline straight from western Colorado to Oregon to be able to export natural gas to Japan. They are the best positioned equipment company if this were to happen. The Jordan Cove pipeline should get a yes or no sometime in the next year or two. Even without this, this company is a great buy. That would just be a bonus(it is priced as if it will not happen).

They are 17 years old and have the biggest name and the finest reputation in the region. The company is a S Corp and they would prefer a Stock Sale which will have the price adjusted by adding the cash and net AR/AP if a buyer wants it. A Stock sale makes sense based on the contracts they have in place with both customers and vendors and that they don’t have a lot of exposure to liability. The seller will agree to full reps (indemnifications) and warrantees and further guarantee a solid legal and business standing. In fact, the seller will offer a full “right to off-set” against the sales price for any liabilities that originated before the closing. They also have a great record for safety (OSHA) and no legal battles.

The business was started from scratch by the current owner who also owns the land and built a custom building in 1999. He will sign a non-compete. He will offer a full transition. He says a buyer does not need any special skills because he can teach him/her what they will need to know to grow the business.

They are the largest independent sales and rental company in their area and are an exclusive dealer for a lot of the equipment that they sell/rent. The company offers the best maintained equipment and has long term relationships with most of the area’s largest companies. They know their customers need reliable equipment and have the finest techs and mechanics in the region. It took years to train them and they treat them well. They can buy the equipment so inexpensively that they can actually rent it for years and in some cases still sell it for close to their original purchase price. Their most profitable sales begin with a rental that a customer ultimately buys.

The owner states “We are one of the only Dragon dealers in Colorado and have permission to sell where ever we want to, we can sell into Utah, Wyo, SD, ND, Idaho, NM, Neb, KS. We are also the exclusive the Ranco dealer on the Western Slope, the Eager Beaver dealer for Colorado, NVE(vacuum pumps) dealer for Colorado, a dealer for Nuttall trailers, and Hyundai large equipment. We buy directly from Wacker, Genie, MMD(air compressors), Hustler mowers , Pro Tech truck accessories , and Vibrotech screens. We are what Peterbilt calls a MAPP dealer for parts, main reason we deal in PACARR trucks, Pete & Kenworth and can provide parts and service at a reduced price because of this and are starting to get the word out.”

We have 4 Main Revenue Areas:

1) Equipment Rental - They have over one hundred pieces of equipment that they track how often they are rented and keep them maintained accordingly. They sell/rent/customize trailers, most Caterpillar Equipment including D-8’s, Sakai compactors, Hyundai, Wacker light towers, generators, Genie Man lifts, Vibrotech screens, fracking trailers, etc.

2) Sales – The company has dealership status with several big names and they also buy, fix up, and resell equipment. This is an area that can be greatly improved with the owner out of town 22 weeks a year.

3) Service – They provide long term service for the equipment that they sell with is an area that can also be expanded to other equipment.

4) Customization – The oil industry in particular has special requirements that they are uniquely able to fulfill. They get orders to customize trailers for specific jobs that their regular customers need. This is high margin work that really increases dramatically when the energy companies are expanding their production which they are starting to see again.

“We have the finest employees anywhere. We have 7 employees who are capable of running the business on their own and are all trustworthy, experienced, loyal, and will all stay after the transition. Our 2 mechanics are the best in the industry.”

This company is located in a beautiful and very moderate weather part of the Colorado with over 300 days of sunshine per year. This area is obviously growing with a brand new hospital, high school, hotels, theater, shopping, etc.

They recycle oil which is either from their equipment or from a service they offer that allows customers to drop it off for free. They use this oil to heat our building in the winter which saves them a lot of money. This also positions the company as being GREEN.

Their location includes 11,200 Square feet of very functional space on 5.7 acres of property. This is the largest and most functional sales, repair, and rental shop location in the region with plenty of room to accommodate a larger business as it grows. Fenced, custom building with part counter, two sunken repair bays, upstairs offices, private gas station, and great location on main commercial road. Can be seen from I-70. He prefers a sale of the property but will consider a lease for 144K per year triple net or purchased for 2.15M. The property recently passed a Phase 1 environmental test. Plus, he is planning a remodel/addition to the parts dept that will cost the new buyer 50K or so. Depending on when a buyer closes on the building will determine how much of this is added to the purchase price.

Growth and Expansion: The new owner should add additional rental equipment. Their yard is mostly rented in the peak season. Motivating the sales person to increase rentals in the off season would prove very profitable. Add a floor plan again. The roaring fork valley is growing very quickly with high end housing and commercial for the entire 47 miles from Glenwood Springs to Aspen and their town is less expensive and located closer to this area than United Rentals which is in Eagle Colorado. The new owner should be able to continue to increase rental revenues. Eventually, as oil and gas recovers and/or construction stays strong, a new owner can add a mobile repair and/or tire service, and sell tires from their current location which are all services that used to be provided out of their area but the company went out of business. They are positioned to add that business. They have the space and mechanics to do it. They also need to reach out to the newer oil and gas companies again since many of them have been bought by other groups that they don’t currently have relationships with. The new owner can add new vendors and products eventually also. Advertising truck repair based on their location is something they have considered because they have the mechanics and bays already and are right off of I 70.

The owner is retirement age and wants to spend his summers gold mining in Alaska but will help transition the business. This business needs new ownership with the drive to grow it again. It has very little competition and can provide services and equipment to a very large area. Both rentals and sales to ranchers, oil and gas, and construction can help this company to grow again in the current environment.

If you are NOT interested in this business for sale, but you refer someone to us who buys it and we collect the full commission, we will pay you a referral fee of 3,000 as part of the closing. Please send us anyone (or email this to anyone) who you think would be interested in this offering. Thank you.

Sincerely,

Jeff Chapman Eisnaugle
303-905-7607 Direct
303-284-7025 Main
720-524-6482 Fax
jeff@businessbrokercolorado.com

This is prepared by Business Broker Colorado, LLC with Company Broker Group, LLC being the managing broker with information provided by the Seller. It was not created by the seller and neither the Broker or the Seller are responsible for its accuracy. Buyers are responsible for their own due diligence. Neither the Broker or the Seller will indemnify or guarantee any forward looking statements or projections.
Different Brokerage relationships are available which include Seller agency, buyer agency, or transaction – brokerage.

Brokerage disclosure to Buyer or Tenant of Property. Definition of working relationships.

Seller's Agent: a seller's agent works solely on behalf of the seller to promote the interests of the seller with the utmost good faith, loyalty, and fidelity. The agent negotiates on behalf of and ask as an advocate for the seller. The seller's agent must disclose to potential buyers all adverse material facts actually known by the seller's agent about the business/property. A separate written listing agreement is required which sets forth the duties and obligations of the broker and the seller.

Buyer’s Agent: a buyer’s agent works solely on behalf of the buyer to promote the interests of the buyer with the utmost good faith, loyalty and fidelity. The agent negotiates on behalf of an accident advocate for the buyer. The buyer’s agent must disclose to all potential sellers all adverse material facts actually known by the buyer’s agent, including the buyer’s financial ability to perform the terms of the transaction. A separate written by a Buyer agreement is required which sets forth the duties and obligations of the broker and the buyer.

Transaction broker: the transaction broker assist the buyer or seller or both throughout a real estate transaction by performing terms of any written or oral agreement, fully informing the parties, presenting all offers and assisting parties with any contracts, including the closing of the transaction, without being an agent or advocate for any of the parties. A transaction-broker must use reasonable skill and care and the performance of any oral or written agreement, and must make the same disclosures as agents about all adverse material facts actually known by the transaction – broker concerning the property or a buyer's financial ability to perform the terms of a transaction and whether the buyer intends to occupy the property. No written agreement is required.

Business Broker Colorado, LLC and Company Broker Group, LLC, and Jeff Chapman Eisnaugle will be operating solely as a “Seller Agent” in all transactions.

Detailed Information

Location:
Glenwood Springs, CO
Inventory:
Included in asking price
Real Estate:
Owned
Not included in asking price
Building SF:
11,200
Employees:
6
Furniture, Fixtures, & Equipment (FF&E):
Included in asking price
Facilities:
Their location includes 11,200 Square feet of very functional space on 5.7 acres of property. This is the largest and most functional sales, repair, and rental shop location in the region with plenty of room to accommodate a larger business as it grows. He prefers a sale of the property but will consider a lease for 132K per year triple net or purchased for 2.15M. The property recently passed a Phase 1 environmental test. Plus, he is planning a remodel/addition to the parts dept that will cost the new buyer $50K or so. Depending on when a buyer closes on the building will determine how much of this is added to the purchase price.
Competition:
They are the largest independent sales and rental company in their area and are an exclusive dealer for a lot of the equipment that they sell/rent. The company offers the best maintained equipment and has long term relationships with most of the area’s largest companies. They know their customers need reliable equipment and have the finest techs and mechanics in the region. It took years to train them and they treat them well. They can buy the equipment so inexpensively that they can actually rent it for years and in some cases still sell it for close to their original purchase price. Their most profitable sales begin with a rental that a customer ultimately buys.
Growth & Expansion:
Growth and Expansion: The new owner should add an outside sales person. The new owner should be able to continue to increase rental revenues. They also need to reach out to the newer oil and gas companies again since many of them have been bought by other groups that they don’t currently have relationships with. The new owner can add new vendors and products eventually also. Advertising truck repair based on their location is something they have considered because they have the mechanics and bays already. The owner is retirement age and wants to sell. This business needs new ownership with the drive to grow it again. It has very little competition and can provide services and equipment to a very large area. Both rentals and sales to ranchers, oil and gas, and construction can help this company to grow again in the current environment. Plus, that area tends to be about a year behind Denver which means that 2019 should be a fantastic year.
Financing:
Up to 200K
Support & Training:
The Seller will sign a non-compete and offer a full transition. He says a buyer does not need any special skills because he can teach him/her what they will need to know to grow the business
Reason for Selling:
The owner wants to retire
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Jeff Chapman Eisnaugle

Business Listed By:
Jeff Chapman Eisnaugle

Business Broker Colorado

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