15 Year Old Denver Hazerdous Material Company

Financial & Assets Details

About the Business

Business Description

Hazardous Materials Removal Company that is well positioned in a growing industry

The trailing 12 months from July 1, 2024, to June 30 2025 had revenues of 2.26M and properly adjusted earnings of 378K. The sales price of 870K is only 2.3 times the trailing 12 months earnings of 378K.

The sale price for the business is 870K. The sales price would be higher, but they had a drop in profitability in 2024 which was based on a onetime combination of lazily taking to many referral jobs which resulted in over 111K in referral fees being paid out in 2024. By making the choice to not add additional employees and trucks knowing that they would be selling the company soon, they showed lower than normal profitability because they had no choice but to do a lower percentage of unreferred work. In other words, they felt that they needed to take care of their long-term clients who refer work to them as a priority and in 2024, this meant turning down more profitable work. This would be considered good news to a new owner who would have taken on both types of work by adding technicians and an additional vehicle or two. When you look at the adjusted earnings excel spreadsheet in the data room link that you will find in the detailed email that I will send you automatically once you submit the NDA, you can clearly see that 2024 is an outlier but I could not ignore it in my valuation. I dropped the multiplier to 2.3 from what would have been 2.5 which is a drop in sales price of 75K. I also showed 2 negative add backs on my spreadsheet that most brokers would have left of to be fair. I am always impressed when a Seller agrees to allow me to do this which they know will cost them money. The two negative adjustments are for an insurance expense that exists every year that was paid in June of 2024 but not paid until July of 2025 which made the bottom line 13,264 higher than it should have been, so I negatively adjusted for this to be fair. The other is the difference between a mortgage payment for the property and the rent they pay themselves on their PL’s. We can discuss all of this anytime.

The company is over 15 years old and one of the largest hazardous removal companies by volume in Colorado. This is a growing industry due to increased regulation on the State level, including laws that require testing of any suspect material which usually leads to its removal. Only a fraction of residential and commercial building has had the mitigation that is needed.

Hazardous materials are still being imported into the United States each year. The countries mining and exporting these materials have different regulations than the United States and the US does not have the people power to test the materials when they enter US ports. Even recently built homes or offices may contain these materials.

The sales price is 870K. Here are the reasons this is a great price: The sales price is 870K. Here are the reasons this is a great price: The sales price is only priced at 2.30 times its trailing 12 months earnings which is low for a growing company with a steady backlog and can add additional services like Radon mediation. The company currently gets its business from online advertising helped by its 4.9 Google rating with over 200 reviews, recurring business from contractors/builders, from state employees who are asked if they recommend any companies, and from referrals from previous customers. Their advertising cost is under 1% of their revenues because their service is a “need” not a want. Plus, their technicians only need a small amount of inexpensive training, which separates this company from many other service companies that require a much higher level of training and skill and whose employees are much more expensive and harder to find.

A new owner doesn't need any special skills, but it is recommended to have some prior construction experience and/or to take an industry related short class. The owner will also need to get an easy-to-get license from the State of Colorado. The company has 15 total employees, 11 of whom are technicians and are certified. The other four employees are office staff who are made up of the office administrator, the estimator, the back-office support, and the project manager who also oversees daily operations. The sellers are selling because they want to travel more and spend more time with family. They will sign non-compete agreements and will help transition the business to the new owner.

The business doesn't have to have any salespeople or make any outgoing sales efforts. It is all done through search engine optimization of their website, through referrals from networking and referral partners, and through their outstanding reviews. They have a high number of positive reviews, which can be found on their website, Yelp, the Better Business Bureau, and social media. Additionally, the company has an excellent mod rating of 0.8 for its workers' comp insurance rating. Their focus is on adhering to State regulations and employee safety.

Growth opportunities are numerous: A new owner could add other virtual locations and increase search engine optimization to drive more online traffic. Complimentary(not free) services could be added(Much more detail on this is in the detailed package that will be provided upon filling out and submitting the non-disclosure agreement in the blue link above. Currently the owners don't work outside of the metro area despite regularly receiving requests for work in the mountain resort towns along I-70. Property owners in the mountain areas understand that they may pay more for Denver-based service providers to travel to these areas to work. “We turn down a significant amount of work from the mountains”.

The cost to capitalize growth is low. The business comes with 3 vehicles and 3 trailers worth 60K and 10K worth of equipment and tools totaling 70K. Their equipment is small, inexpensive, and easy to transport. There is plenty of room in their current space for additional employees, inventory, tools, and equipment. The degree of skills the employees need is among the lowest in the service industry which makes it easier to find employees. Their building also has a conference room for employee meetings/training.

The sale price includes 70K in assets. The company is an S Corp which means that it can be bought as a "Stock" or "Asset" sale. It is being priced as a "Stock" purchase with the owners keeping their collectible accounts receivables and cash and pay off all debt at or before the closing. They prefer a "Stock" sale because their taxes will be lower than with an "Asset" purchase. I estimate that a buyer will need 225K liquid to be able to buy this business and the real estate. The seller will carry 10% with a 5-year amortized personally signed promissory note at 6%, with monthly P&I payments, and a 3-year balloon payment which is the shortest the SBA will allow.

The new owner will need to get their own Asbestos license with the State of Colorado. This is considered a “riskless” license to get since there is no experience requirements or tests, but it does take up to 3 months to get and does require submitting detailed safety and procedural plans which the current owner will help you with. More importantly, Live Oak Bank with Kevin Doyle at 303-374-4839 and several other banks will allow a closing without waiting for the license since they consider it “riskless”. Obviously, there will have to be an agreement to use the current owners in the gap between the closing and the new owner obtaining their own and an indemnification of risk to the Seller during that gap. The company is doing very well and growing so the new owner will want to get to a closing as soon as possible.

Location: Denver Metro Area_

Details:

They have an employee who handles email leads and sets estimate appointments and project schedules and applies for permits so that the manger spends part of his time in the office. The owner only meets with the biggest leads. There are currently 11 excellent and reliable field employees, many of whom have been with the company for 3 years or longer.

The company has a great reputation for excellent customer service. They have an excellent workers' safety history as proven by their low 0.8 mod rating for workers' comp insurance. The seller will offer the standard reps, warranties, and indemnifications at closing.

The company has a great location that is for sale also which is contingent on the purchase of the business. It will be a separate purchase but must be bought at the same time. This is a great building in a great location which will further help the buyer build equity over time. The property is 12,507 SF with a fenced in lot with 8 parking spaces and two large storage containers on the lot. Built in 1962, the building is 2,697 SF, and has been recently remodeled with new windows, doors, roof, and flooring. The property and the building are available for 750K. If there is not a buyer for both the business and the property, the owners will consider a lease agreement for 20/SF triple net, which is 4,495/month, triple net. It is zoned MU-N and is a perfect building for their needs.

The broker is available any time to discuss your interest in this offering and can set up a meeting either in person or by phone with the owner(s).

Growth & Expansion

A new owner could add other virtual locations and increase search engine optimization to drive more online traffic. Complimentary(not free) services could be added(Much more detail on this is in the detailed package that will be provided upon filling out and submitting the non-disclosure agreement in the blue link above. Currently the owners don't work outside of the metro area despite regularly receiving requests for work in the mountain resort towns along I-70. Property owners in the mountain areas understand that they may pay more for Denver-based service providers to travel to these areas to work. “We turn down a significant amount of work from the mountains”.

Market Competition:

The company is over 15 years old and one of the largest hazardous removal companies by volume in Colorado. This is a growing industry due to increased regulation on the State level, including laws that require testing of any suspect material which usually leads to its removal. Only a fraction of residential and commercial building has had the mitigation that is needed.

Location Details:

The company has a great location that is for sale also which is contingent on the purchase of the business. It will be a separate purchase but must be bought at the same time. This is a great building in a great location which will further help the buyer build equity over time. The property is 12,507 SF with a fenced in lot with 8 parking spaces and two large storage containers on the lot. Built in 1962, the building is 2,697 SF, and has been recently remodeled with new windows, doors, roof, and flooring. The property and the building are available for 750K. If there is not a buyer for both the business and the property, the owners will consider a lease agreement for 20/SF triple net, which is 4,495/month, triple net. It is zoned MU-N and is a perfect building for their needs.

Support & Training

Will support as long as needed