Industrial Services for Metal Part Reclamation
SOLD - NEO Business Advisors represented a semi-absentee, industrial service provider with 65+ years of expertise serving manufacturers in the bonded metal industry with metal part reclamation. The Company had developed specialized processes and equipment to remove bonded rubber and coatings from metal parts through processes that don’t compromise the integrity of the metal part allowing it to be recycled into the manufacturing, rubber to metal bonding, or coating processes. The ability to recycle these otherwise scrap parts provided a significant cost savings to the customers who are manufacturers, bonders, and coaters.
Asking Price: $1,100,000
Gross Revenue: $1,108,271
SDE: $368,363
FF&E: $110,000 Included? Yes
Working Capital: $150,000 Included? Yes
Real Estate: Leased for $5,000/month
Building Size: 12,000 SF
Employees: 14 (12 FT and 2 PT)
Established: 65+ Years
Location: Ohio
Detailed Information
The company had little or no competition in the market and long-tenured customer relationships. The process required EPA permitting which the Company maintained with an impeccably clean record and was transferrable. The business had consistently strong sales and profitability with year over year margin improvement each of the last 3 years. End market industries were well diversified with Fortune 500 customers and OEMs in agricultural, trucking, automotive, off-road, and industrial sectors. Average order size was $5,000 with 100% repeat sales. There was moderate customer concentration with the #1 Customer at 44% of sales in 2023, up from 32% in 2022 and 31% in 2021. The #2 Customer was 9% of sales in 2023, down from 11% in 2022 and 16% in 2021; sales dollars to this customer had remained consistent but percent of sales had decreased as total sales volume has grown. This was an excellent opportunity for an individual buyer looking to step into business ownership with a profitable business, defensible market position, and a stable foundation for growth.
Financial Overview:
Revenue by Year:
2023 - $1,108,271
2022 - $902,204
2021 - $824,423
Weighted Average Revenue - $992,274
Seller's Discretionary Earnings (SDE) by Year:
2023 - $368,363 (33.24%)
2022 - $281,572 (31.21%)
2021 - $216,443 (26.25%)
Weighted Average SDE - $314,113
Furniture, Fixtures, and Equipment (FF&E): FF&E of $110,000 was included in the asking price including specialized equipment, ovens, heating elements, media blasting, part tumblers, presses, tooling, tow motors, and support equipment along with a variety of office furniture, computers, software, and phone systems.
Working Capital: Inventory was nominal and was included in the asking price along with $160,000 in Accounts Receivable and $10,000 in Accounts Payable as part of a normal level of Working Capital of $150,000 with the final sale price to be adjusted up or down for actual amount of Working Capital at time of closing. Inventory consisted of a variety of shop and office supplies.
Real Estate: Real Estate was owned by the Company owner in a separate legal entity and was leased to the Company for a fair market rent of $5,000/month for 12,000 SF of manufacturing space with a small, detached office unit. The owner’s preference was to continue to lease the real estate to a buyer of the Company as a passive income stream but was also open to selling at a fair market value subject to appraisal depending on deal terms.
Growth and Expansion: The business offered excellent, long- standing customer relationships and a very well-established brand reputation serving as a solid foundation for growth. The owner had identified several opportunities for growth and expansion including but not limited to hiring a salesperson to increase work with existing customers, developing a marketing and sales strategy to target new customers, adding additional personnel and shifts to further utilize existing equipment, and investing CapEx to add more equipment as the company grows.
Reason for Selling: The owner was seeking a sale for retirement.
Support & Training: The owner was willing to stay on for a reasonable time after a sale to ensure a smooth transition at mutually agreeable terms and compensation. The owner was currently semi-absentee and ran an unrelated manufacturing rep business which he planned to continue to run post-closing.
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