Property Listing

Asking Price: $2,450,000 Annual Sales: $6,000,000  -  Cash flow: $700,000 to $800,000

The current (second) owner of this 17 year old West Michigan design and build business specializing in custom machines, fixtures, and automated work stations (for industry) is ready to transition his company to buyers who are interested in taking the business to the next level. He has owned it for seven years and has recorded sales increases each year, even in 2009 which was a very difficult year for the industry.

Operating in an attractive, newer, 15,000 square foot leased facility located minutes from a major highway intersection, the business has current (2010-2011) annual revenues of $6 million working just a single shift. The business generates $700,000 of annual cash flow (seller’s discretionary earnings - SDE). EBITDA for first 6 months is $485,352.

This CAD-CAM intensive business employs 25 skilled, loyal, non-union employees whose knowledge and experience allow the company to build sophisticated work cells, automated equipment, and complete assembly systems incorporating among other features pneumatic and hydraulic controls, scanners, barcode readers, PLC controls, robotics, vision systems, radio frequency ID and the like.

The company’s customer list (with both domestic and international sales) reads like a who’s who in industry, and quoting activity is currently at an all time high level. The business supplies capital equipment to a wide variety of industries including office furniture, agriculture, medical, automotive, and home improvement, to name several.

The business is being offered for $2.45 million which is a very realistic 3.5x cash flow and less than 0.4x revenues. The owner is contemplating an asset sale which would include inventory (approximately $375,000) and $200,000 of equipment. The seller will retire all liabilities and will retain cash and A/R. In addition, the seller will carry a mid six figure seller note for a financially qualified buyer. EBITDA for first six months is $485,352.

The owner/seller has listed the business because with revenues of $6.0 million and a $2.5 million backlog, he is by his own admission “overmatched” by the business which he comfortably managed for a number of years when revenues were under $2.5 million. An admitted “micro-manager,” the seller has been unsuccessful in both hiring staff and delegating responsibility. His solution: sell his attractive business before it consumes him. He would be willing to stay on in a plant management/administrative position should the buyers opt for this post close approach.

The company uses a well respected Grand Rapids CPA to compile its books and file its tax returns. Internally, the company uses QuickBooks and does not have a strong accounting person. The seller’s daughter handles the financial function and the seller’s wife does the payroll (internally) while working on a part-time basis.

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