Fast Growing Denver-Area Commercial Plumbing Company

Price: $950,000

Location: Front Range - Colorado

Industry: Plumbing

Listing ID: 171755

Listing Description

Exceptionally Profitable & Well-Managed Business Model!

This growing company is a rapidly growing 15-year old commercial and residential plumbing contractor with high-value accounts located in the heart of Denver. The company has a specialty niche, but also does general plumbing work.

An ideal new owner would be a skilled general manager, someone who can provide sound financial management, oversee a team of seventeen employees and is adept at leveraging the company’s current customer relationships to further grow this dynamic firm.

The company has a premium list of large and high-value clients whose identities will be shared only with a serious prospective buyer at the time an offer is accepted for the business. These are major repeat customers with plenty of stability that offer the company a solid place in its market.

The owner founded the company in 2003 but now wishes to sell to join the rest of his family in another state. He had worked in his specialty niche for another company for just five years before starting this one. Approximately 80% of the current sales volume is commercial and 20% is residential.

The owner is a tradesman and has built his company so that the company’s team of employees is largely responsible for running day-to-day operations with little owner direction. There is only one master plumber on the payroll, but the typical plumbing service call does not require a master plumber and the company’s specialty work does not require any plumbing license at all.

The companyprovides a basic niche service needed by almost every commercial and residential property owner.One key area identified as an attractive market to pursue is preventive maintenance contracts. Preventive maintenance represents less than 10% of the company’s revenues but the owner feels this area is greatly underserviced in the market. It also helps the company fill in the slower times by doing this type of service work when the company is not rushed.

Denver, with its population of about three million, is growing rapidly, and almost all economic signs today point to a continuing increase in demand for plumbing contractors in general as well as for the specialty niche service of this company.

Annual net sales have grown an average of 27% year-over-year from 2016 to 2018, and the company’s profit margin has remained steady at around 10-11% of annual sales.

This is a type of business that would best be led by a new owner with a solid growth strategy who can maintain and build relationships with repeat clients. The opportunity is significant here.

Listing Details

Down Payment: $190,000

Total Sales: $3,300,000

Cash Flow: $370,000

EBITDA: $245,000

Reason For Sale:

Owner is moving to another state after the sale and transition period.

Training & Support:

Seller will be available to train and assist new owner as needed. There are other management level employees as well.

Operation

Year Established: 2003

Location

Facilities Information:

Modern office and storage facility currently leased. A new owner may renew the lease or move the business elsewhere.

Summary

Competition:

There are many local “competitors,” but few who have the exceptional list of established and high-value commercial customers for the company’s niche service. The current owner has also developed a competent management team. The barrier to successful long-term entry in this field is high. The competitors are nearly all local companies.

Potential Growth:

The business has grown rapidly from its founding 15 years ago. One big potential new opportunity is for further expansion is to begin selling preventative maintenance contracts for the specialty niche service this firm provides.

Financing/Terms:

Anticipated Seller: None

Anticipated Bank: $760,000 / 8.0% / 10 Years.

Down Payment: $190,000

Working Capital Needed: $100,000

Inventory Purchase:Inventory (Approximately $15,000) to be purchased separately at closing.