Industrial Supply and Distribution Business
SOLD - NEO Business Advisors represented a leading regional distributor of industrial supplies and construction products including pipe, industrial and hydraulic hose, pumps, and more. The business was run semi-absentee by the current owner who only worked about 10 hours per week on the business with experienced staff in place running the day-to-day at both of their two locations. The company was well staffed with skilled employees and offers an extensive inventory of products in roughly 25,000 square foot of warehouse space coupled with modern technology driving growth and business efficiency.
Asking Price: $4,250,000
Gross Revenue: $5,219,339
Adj EBITDA: $810,930
SDE: $835,817
FF&E: $300,000 Included? Yes
Inventory: $1,300,000 Included? Yes
Real Estate: $1,250,000 Included? No
Location #1: 18,000 SF (Owned)
Location #2: 6,000 SF (Leased)
Employees: 12
Established: 90+ Years
Location: Ohio
Detailed Information
The company was long established with roots going back almost a century. The current owner had owned the business for the past 25 years and made significant strides in growing the business, building long-lasting relationships with industry-best suppliers, and combining local industry expertise with national distribution coverage to meet the needs of their customers.
COVID-19 Impact Statement: The business operated as an essential business throughout COVID-19, however sales and profitability declined in late 2019 and remained down throughout 2020. The business began to recover in 2021 and was back to normal operating level in 2022. The First Half 2023 was on pace for financial performance similar to 2022.
Financial Overview:
Revenue by Year:
2022 - $5,219,339
2021 - $4,274,471
2020 - $3,670,758
Weighted Average Revenue - $4,983,122
Adjusted EBITDA by Year:
2022 - $810,930 (15.54%)
2021 - $454,392 (10.63%)
2020 - $167,611 (4.57%)
Weighted Average Adjusted EBITDA - $721,795
Furniture, Fixtures, and Equipment (FF&E): FF&E of $300,000 was included in the asking price. Shop assets included three (3) forklifts, a telehandler, presses, hose saws, hose crimpers, multiple delivery vehicles, and optimal storage shelving, racks, and bins for product inventory. Office equipment included state-of-the-art software system for ERP and inventory management, servers, computers, phone systems, desks, chairs, and CCTV security camera systems at both locations.
Inventory: Inventory of approximately $1,300,000 was included in the asking price to be adjusted up or down for actual amount at time of closing. Inventory included a wide variety of pipe, fittings, industrial and hydraulic hose, pumps, and more.
Real Estate: Real Estate included two locations the first of which was owned by the Seller and for sale with the business. The owned Real Estate was valued at $1,250,000 and not included in the Asking Price. The buildings had approximately 18,000 SF of warehouse and office space. The second location was 6,000 SF leased by the Seller from an unrelated party on a Net/Net lease for $4,300/month.
Growth and Expansion: The business was an excellent strategic acquisition opportunity for someone already in the industry to acquire a brand name with an excellent reputation and long-established customer and supplier relationships. Being semi-absentee run, the business could add a new territory for an existing company without additional overhead or hiring requirements. An active owner dedicating time to the business could grow the business with existing and new customers through developing a strategic marketing plan and hiring additional salespeople and warehouse staff.
Reason for Selling: The owner was selling to retire and spend more time with family. The owner felt strongly the business was positioned well for an active individual buyer or a strategic industry buyer to take it to the next level.
Support & Training: The owner included four (4) weeks transition training included in the asking price.
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