18 Year Old Pavement Striping Company, 90% Recurring Work, Growing over 15% a Year

Financial & Assets Details

About the Business

Business Description

Pavement Striping Co

18 Year Old Company

2022 had earnings of 385K on revenues of 957K which is a 40% profit margin. The company has been growing at over 15% a year regardless of Covid, etc.

This company paints lines on highways, roads, and parking lots including handicap symbols and thermoplastic which are the reflective thick lines that you see for most crosswalks/stop bars/arrows in streets. They also do minimal line removal and grooving for inlaid thermoplastic. This business is only open from late-April to early November. The owner has little to do but maintenance of some recurring relationships and maintenance over the coldest 5 months of the year. The company keeps on one employee that handles maintenance and cleaning of equipment through the off season.

The owner is retiring. He is the operator that runs the switches in the back of the striping truck, answers the company phone, orders all materials, scheduling, interaction with his accountant, etc. He has a paint truck driver and a support person who does various jobs including setting and picking traffic cones, cleaning of debris on roadway, loading and unloading product.

This business does not have a lot of competition. 90%+ of their work is reoccurring which is usually in bid results or negotiated contracts. Roughly 25% of their projects are no bid situations. They have not had a lot of competition from the larger contractors. The smaller contractors seem to stay in their own areas. They provide their services for counties, municipalities, cities, and various other entities including smaller striping contractors & a few general asphalt contractors. Their projects are usually in the eastern half of Colorado.

The buyer will get over 204K in hard assets made up of equipment and vehicles including an expensive striping truck and one that could be repaired for a lot less than a new one allowing the new owner the chance to increase the revenues.

The company has a great reputation with a long-standing and recurring customer base. They also have a lot of predictable recurring re-striping. Re-stripe work is done annually on nearly all customers roads. Some of the customers just rotate out which roads get done that year.

This business typically has one W-2 longer term employee that works the required hours during the entire work season and put in two 10 hour days per week during the off season. The rest of the worker(s) are independent contractors or seasonal employees who are paid hourly. This business has only 1 crew.

It has the employees, equipment, reputation, model, and customers. In addition, it is not dependent on the economy and there are more businesses and parking lots being built in his territory every year.

Location: Owner can live anywhere in Douglas, Elbert, or El Paso County

Sales price is 790K plus his cost of inventory. This price is less than 2 1/4 times the earnings. Keep in mind that the owner of this company is only working 7 months a year. He will carry up to 10% of the sales price. This is being priced as an asset purchase which means that he will be keeping his cash and accounts receivables and will pay off all debt including the accounts payables so that the business transfers debt free. It is an S Corp so this can be either a stock or an asset sale. This will qualify for a bank loan.

Brief Overview and Deal Points:

Growth and Expansion: The company can grow by increasing advertising, working for corporate customers including big box stores/strip malls, and by just taking more jobs because he turns down a lot of jobs. They have typically over the past 3 years pulled away from parking lot striping and focused solely on road striping, which was higher profitability but by adding a crew, the parking lot striping can be re-addressed. The new owner can repair the 2nd paint truck which needs a new engine and some other minor repairs which could increase the business that they can do by perusing temporary striping projects. He said the demand is still there and it is up to the new owner how big they want to be. The new owner can also raise prices faster than he has since the demand is constant. The owner has recently purchased a couple pieces of equipment to help the loading process of the paint truck and a high quality drumhead for the grinder to cut smoother. The new owner can also add signage which he used to do which will attract big box and strip mall parking lots again.

They have a great reputation for safety, quality, and reliability. The seller will agree to full Reps and Warranties to a solid legal and business standing. They have had no regulatory issues, no lawsuits, and no issues with the city, county, or municipality that they are in. They are also A+ rated with the Better Business Bureau. The current owner loves the industry, his employees, customers and the company. He is excited to teach the new owner how to run and grow this business. The owner will sign a non-compete. He is willing to transition the business and can teach the new owner how to run the business and how to grow it very easily. Industry experience is not necessary. There are no licenses required and he will not only help in transition but leave at least one employee post-closing with the necessary experience.

The owner also owns the property that the business is on which is worth 600K. He prefers a sale of both the business and the property contingent on each other. A standard 10% down payment leaves 540K over 25 years at 6% which would be a monthly payment of 3,479 which is 41,748 per year. It is a large property located between Colorado Springs and Denver well East of I25.

It is sunny almost all year round in Colorado and there are a lot of very interesting places close by to do more striping including Denver which is less than an hour away. Plus, Colorado is the best State in the country to own a business. Colorado is one of the fastest growing and strongest economies in the United States.

Thank you for your interest,

Jeff C Eisnaugle
Business Broker Colorado, LLC
Direct 303-905-7607
Fax 720-524-6482
jeff@businessbrokercolorado.com

Growth & Expansion

The company can grow by increasing advertising, working for corporate customers including big box stores/strip malls, and by just taking more jobs because he turns down a lot of jobs. They have typically over the past 3 years pulled away from parking lot striping and focused solely on road striping, which was higher profitability but by adding a crew, the parking lot striping can be re-addressed. The new owner can repair the 2nd paint truck which needs a new engine and some other minor repairs which could increase the business that they can do by perusing temporary striping projects. He said the demand is still there and it is up to the new owner how big they want to be. The new owner can also raise prices faster than he has since the demand is constant. The owner has recently purchased a couple pieces of equipment to help the loading process of the paint truck and a high quality drumhead for the grinder to cut smoother. The new owner can also add signage which he used to do which will attract big box and strip mall parking lots again.

Market Competition:

This business does not have a lot of competition. 90%+ of their work is reoccurring which is usually in bid results or negotiated contracts. Roughly 25% of their projects are no bid situations. They have not had a lot of competition from the larger contractors. The smaller contractors seem to stay in their own areas. They provide their services for counties, municipalities, cities, and various other entities including smaller striping contractors & a few general asphalt contractors. Their projects are usually in the eastern half of Colorado.

Location Details:

The owner also owns the property that the business is on which is 5.12 acres, and is currently being refurbished 1,749 square foot ranch home on it which he used to lease for $1,750 a month and is currently empty in case the buyer wants to use it, a 2,000 square steel 2 high garage door commercial building with an office and a loft. He also has a garage (400 sf), sheds, a container, and more yard space than the business will ever need. He has asked me to find a buyer for both the business and the property and for both to be contingent. If by chance, I can’t within a reasonable period of time, he will consider a lease at that point. We believe the property is worth 600K which with a standard 10% down payment leaves 540K over 25 years at 6% which would be a monthly payment of 3,479 which is 41,748 per year. If the buyer would like to lease the house, he was getting 1,750 a month and after the current refurbishment believes he could get 2,000 a month which would cover over 60% of the property mortgage payment. He has included the electricity into the lease agreement on the house so the renter pays electric for the shop, which is usually minimal usage. The house is well past the business and the tenant would not interfere with the business. It is a large property.

Support & Training

Will stay as long as needed

Reason for Selling:

Retiring