← Back to SearchBusinesses for Sale
PRINT
Verified Listing

CO Asphalt and Paving Co, Huge Equity Building Potential, Owner can be Absentee

ConstructionFor Sale in CO

Listing ID: 32839 | Broker Listing ID: BLP013685

Financial & Assets Details

$6,120,000
$1,280,000
$2,000,000

About the Business

1997
42

Business Description

ASPHALT AND CONCRETE PAVING CO

This is a new listing as of July 22nd and I already have an important UPDATE. The bids due date has been extended by 30 days to the end of August from July 29th. I have also included a Bidding Procedures PDF in the Data Room in the sales package which will be sent after filling out the NDA above. FYI, the current owners would like a chance to keep and lease to the buyer of the business the Colorado Springs property to the buyer of the business. This is an essential property to the business since it has room for all of the equipment, maintenance, & repairs and has two hot buildings for the asphalt work, is closest to most of their work, and is a 3rd generation custom building for their employees, etc. To be clear, the buyer can bid on the business, the business and one property, or the business and both properties and does not have to take into consideration their desire for buying back ownership in the Colorado Springs property. If it is a consideration, they will negotiate a 10 year lease or longer with auto extensions with the buyer of the business to be executed at the closing to eliminate any risk of losing the use of the main property.

Clarification: Post-closing, the 2 managing owners would like to stay, whereas one or both will continue to run the company with a reduction in salary of 130K and a bonus based on performance. They are not requiring a buy in of any ownership at the closing but would like(not require) the ability to do so post-closing(not required). This is not a deal breaker if it is a no but is a sign of confidence either way.

I am being asked about liquidation values which I am happy to discuss but we had a hearing in April where the judge decided to that there is value beyond the liquidation value and the courts decided not to force just a liquidation. The company had 6.1M in revenue and 1.27M in properly adjusted earnings over the trailing 12 months to May 31st with a CPA looking over the numbers. The current value of the business assets is estimated to be 2M, the creditors will keep the cash and AR most likely, and the company has generated those numbers over the last year with a hand tied behind their back for many reasons discussed both in the video interview and that can be discuss in a direct conversation with an owner operator that I would be happy to set up for qualified potential buyers. I don’t have any way of knowing what the winning bid for the business will be but with 2M in mostly easy to liquidate equipment included and 1.28M in earnings, I would guess the multiple would be under 3X compared to 4X it would sell for outside of bankruptcy. The business typically generates 9M or more in revenue and has never had a negative year of earnings.

No liability of any type will follow the sale to the buyer. The business will be bought debt free also.

For Sale:

ASPHALT AND CONCRETE PAVING CO

A full-service parking lot and road contractor that provides repair and maintenance for commercial, residential, and municipal properties
They do all types of paving, patching, sealcoat, crack fill, pothole repair, paint/striping for mostly large customers with recurring contracts

Their current trailing 12 months of properly adjusted earnings to May 31st 2022 showed 1.28M in adjusted earnings from 6.12M in revenues. The 2021 earnings were 917K from 5.74M in Revenues. The company had an equipment appraisal done in August of 2021 which came back at 1.28M but it did not include the 600K of leased caterpillar equipment which will now be owned post-closing. It also didn’t include the estimated 175K of all of the other FF &E like small equipment, tools, office furniture, etc. The owners believe the total value of the assets is currently at least 2M.

This company filed for Chapter 11 Bankruptcy in February of 2021 based mostly on the loss of working capital which resulted from a failed acquisition into a separate but similar company out of state. This company has a history of doing over 12M in revenue every year with steady profits. It has not shown a loss over the last 20 years including 2020, 2021, and the trailing 12 months.

The company has been more efficient and has shown a higher profit margin since their bankruptcy filing than they had before. The court appointed a CPA to look over, correct, and isolate the Colorado Company’s financials from some residual expenses form the out of state one. The CPA created new financial reports with footnotes for 2021 and the court has looked over the company’s 2022 financials also.

They filed bankruptcy in mid-February of 2021 and had no idea whether the court/creditors would let them operate under bankruptcy with enough working capital to keep their main customers happy. The bankruptcy filing initially resulted in a “deer in the headlights” attitude from the two working owners which resulted in very poor results for February and March of 2021 which was right before and after the BK filing. They are growing again and capable of being better than ever with a new owner. They have had to make monthly payments to the court and have declined some work based on working capital insecurities. This will not be an issue with the new owner post-bankruptcy.

All potential buyers will have a chance to interview the 2 owners who have been running the company for the last 5 years and would like to stay. They have done a great job since the bankruptcy and would like to stay if possible and potentially have a chance to earn a bonus and/or buy back some ownership post-bankruptcy. This is not required. Their decision to expand by buying a separate business has cost their family their legacy and they are determined to do the right thing for the future of the company. If you meet with them as I have many times, I believe you will see the potential for them to return to the revenues and profits that they had for a very long time. They represent the 3rd generation, and the future of this company matters a lot to them.

The new owner can be located anywhere and be able to focus on growth since two of the owners can run the operations. There are 4 owners made up of two who are 100% retired(2nd generation) and the other two are their two sons who each manage one of the two locations. One runs the Colorado Springs location and the other the Denver location. They cover the entire state of Colorado and for the right jobs they have done work in Utah, New Mexico, Wyoming, and Arizona also. The buyer does not have to be in the industry or have experience as an owner or manager in the construction or service industry because they can teach you.
This is a 3rd generation family business. They are a general contractor that does reactive repairs, proactive parking lot/paving replacements, and new work like parking lots/roads. Most of their work is reactive repairs in the slow season(winter) and an even mix in the peak seasons.

This company does 70% asphalt and 30% cement which is made up of 10% residential, 80% commercial, and 10% government entities. They have recurring long term contracted work with Colorado Municipalities, big box stores, military bases, shopping malls, fast food chains, etc. These are some of the biggest jobs available that are not highways. The company currently has a signed backlog of work. Most of their contracts automatically renew each year as Master Service Contracts unless cancelled.

The assets current value is estimated at 2M with at least 1.83M of it equipment combined with the 85% of recurring revenue, backlog, along with the company’s size should create a sales price that should be higher than it will most likely sell for because of the bankruptcy. I believe this company(not including the real estate) is currently worth at least 4.5M plus $ for $ for any cash and/or collectable AR that the buyer wants outside of bankruptcy but don’t have any way knowing what the highest bid will be. The bankruptcy process requires a pre-determined period to August 31st to receive offers at which point the court will choose the highest and best offer which will become the “stalking horse” bidder. There will be a couple of weeks after August 31st when anyone can submit other offers which will be transparent giving the original bidder a chance to adjust their bid(s) if they need or want to. A best offer which can be just the business, the business with Colorado Springs real estate only, or a bid for the business and both the Colorado Springs and Denver property. They don’t have to be separated.

Companies with easily to liquidate trucks and medium/large equipment carry higher than normal multiples of earnings. There is certainly a lot of upside potential with this company plus they have a lot of equipment that is underutilized currently providing a low capitalization way to grow the company.

The sales price is to be determined and it must include everything, and the business will transfer debt free with no past liability passed on to the buyer. This company is an S corp. It is priced as a stock purchase.

There are two locations for sale. The new owner does not have to buy both: One in Colorado Springs, CO AND one in Denver, CO which can be purchased separately. The Colorado Springs location is the original location, has a much bigger footprint for the equipment/specialized buildings, and most of the work is Colorado Springs to South Denver. In short, the new owner will most likely want to buy the Colorado Springs location and may or may not want the Denver one. The Denver one makes sense also if the new owner wants to grow the company significantly.

Details:

The company was started in 1997, with 2 trucks, 2 employees, and the belief in hard and honest work. The founder comes from a family with a pioneer ethic and skilled workmanship. He did excavating, road building, and large projects. He has built roads for subdivisions and for heavy highway paving in Arizona, New Mexico, and throughout Colorado. The two sons who manage each location, started working at the company before they went to college and have continued the high standards they grew up with. They are well known name in paving and have been paving for mostly commercial companies and government entities for over 25 years. They have long term and very strong customer relationships with a data base of over 1,000 customers they have done business with.

The business has very loyal and long-term employees most of whom have been trained in more than one area to be more efficient. There are 30 full time employees who work year-round and 71 whom are working during the peak seasons. They have all been trained for safety and efficiency. Full time and tenured employees are offered an insurance package. The employees are trustworthy, competent, and reliable because they overpay them and provide full health care and a retirement plan. They felt a stable labor force was worth the extra expense but understand that the new owner may only match 50% of their health insurance premiums in the future which is still much better than most of their competition.

The only good news is that after the bankruptcy filings it has given them back valuable time to concentrate on just the main CO company. The acquisition was the sole reason for the bankruptcy filing. The 2 working owners are each working at least 40 hours a week or more and very focused on the current earnings future of the company.

They specialize in the following:
Asphalt Paving: New installation, overlays with or without fabric, full-dept removal and replacement, patch-backs, surface patches, conventional patching, and speed bumps. They do a lot of reactive pothole filling.

Concrete: New installation, removal, replacement, sidewalks, curb and gutters, drain pans, grinding, caulking etc.

Infrared Patching: Fixes Cracks, reveling, potholes, alligatoring, and drainage problems.

Sealcoat: 2-coat application that provides a protective coating which will slow oxidation and raveling.

Striping: Expert finish to the job which can include the design work and signage.

Growth and Expansion: A new owner can increase advertising, outgoing “warm” calls, and diversify the type of work that they do. The new owner can also do more with online marketing focusing more on customer reviews and SEO. They can use their current client base to help with “soft calls” for new work. It gives them instant credibility with anyone who they choose to market to. In addition, they have not focused on their Google rating which is currently 3.7. This is easy to improve by properly asking for a review from happy customers by instructing them how to leave reviews, calling and offering to repair or refund any work that led to any reviews that are not above 4.5, etc. This is currently not a priority of theirs but should be for a new owner.

Locations: Both locations are for sale. The Colorado Springs, CO location, which is over 8 acres, has 15,720 square feet made up of 3 buildings including a main 2 story building with two full bays for maintenance, two conference rooms with one of them built out as a classroom, large storage room, large employee break room, 6 offices, a reception area, and a 150,000 square foot paved parking lot and a large unpaved area for equipment storage. There are two heated outbuildings. One has their asphalt tanks and mixers, and the other is their painting building with paint, stencils, and mixers. They have 65% of their equipment in Colorado Springs which can hold all of it. This is a class B property.

The Denver property is 2.09 acres and has 11,330 square feet of buildings space made up of the main 2 story office and an industrial mostly storage building. This is a class C property. The bankruptcy had a commercial real estate broker give a Broker’s opinion of current value of each property in November 2021 on both locations. Their opinion for the CO Springs properties was 2.4M and 2.2M for the Denver location which is in central Denver, CO and is 2 acres, has a very similar office building with 2 maintenance Bays, 2 outbuildings, and has 35% of the equipment. The properties are part of the bankruptcy and can be bought together or just one or the other.

It makes sense to buy the business and the Colorado Springs property if the buyer wants to organically grow the business since they can easily do work all over the state and beyond without a Denver location. If the buyer wants to fund faster growth back to 15M in revenue or higher, the Denver location would also make sense.

The business has a concrete license and right of way excavating in Colorado Springs and Denver. The company has a great reputation for safety, quality, and reliability. They consider themselves a solution-based company based on all customer needs. They train their employees to find out what matters most to their customers and to focus on that. The bankruptcy court will ensure that the buyer will not have any risk of their past affecting them. They have a great record for safety (OSHA) as proven by their low workman’s comp MOD rate of 1.0.

The broker is available at 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). Thank you for your interest.

Thank you for your consideration.

Sincerely,

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

This is prepared by Business Broker Colorado, LLC with information provided by the Seller. It was not created by the seller and neither the Broker or the Seller are responsible for its accuracy. Buyers are responsible for their own due diligence. Neither the Broker or the Seller will indemnify or guarantee any forward looking statements or projections. The information contained in this e-mail message is confidential and may be protected from disclosure. Please be aware that any other use, printing, copying, disclosure or dissemination of this communication may be subject to legal restriction or sanction.

Different Brokerage relationships are available which include Seller agency, buyer agency, or transaction – brokerage.

Brokerage disclosure to Buyer or Tenant of Property. Definition of working relationships.

Seller's Agent: a seller's agent works solely on behalf of the seller to promote the interests of the seller with the utmost good faith, loyalty, and fidelity. The agent negotiates on behalf of and ask as an advocate for the seller. The seller's agent must disclose to potential buyers all adverse material facts actually known by the seller's agent about the business/property. A separate written listing agreement is required which sets forth the duties and obligations of the broker and the seller.

Buyer’s Agent: a buyer’s agent works solely on behalf of the buyer to promote the interests of the buyer with the utmost good faith, loyalty and fidelity. The agent negotiates on behalf of an accident advocate for the buyer. The buyer’s agent must disclose to all potential sellers all adverse material facts actually known by the buyer’s agent, including the buyer’s financial ability to perform the terms of the transaction. A separate written by a Buyer agreement is required which sets forth the duties and obligations of the broker and the buyer.

Transaction broker: the transaction broker assist the buyer or seller or both throughout a real estate transaction by performing terms of any written or oral agreement, fully informing the parties, presenting all offers and assisting parties with any contracts, including the closing of the transaction, without being an agent or advocate for any of the parties. A transaction-broker must use reasonable skill and care and the performance of any oral or written agreement, and must make the same disclosures as agents about all adverse material facts actually known by the transaction – broker concerning the property or a buyer's financial ability to perform the terms of a transaction and whether the buyer intends to occupy the property. No written agreement is required.

Business Broker Colorado, LLC, and Jeff C Eisnaugle will be operating solely as a “Seller Agent” in all transactions.

Growth & Expansion

Growth and Expansion: A new owner can increase advertising, outgoing “warm” calls, and diversify the type of work that they do. The new owner can also do more with online marketing focusing more on customer reviews and SEO. They can use their current client base to help with “soft calls” for new work. It gives them instant credibility with anyone who they choose to market to. In addition, they have not focused on their Google rating which is currently 3.7. This is easy to improve by properly asking for a review from happy customers by instructing them how to leave reviews, calling and offering to repair or refund any work that led to any reviews that are not above 4.5, etc. This is currently not a priority of theirs but should be for a new owner.

Location Details:

Locations: Both locations are for sale. The Colorado Springs, CO location, which is over 8 acres, has 15,720 square feet made up of 3 buildings including a main 2 story building with two full bays for maintenance, two conference rooms with one of them built out as a classroom, large storage room, large employee break room, 6 offices, a reception area, and a 150,000 square foot paved parking lot and a large unpaved area for equipment storage. There are two heated outbuildings. One has their asphalt tanks and mixers, and the other is their painting building with paint, stencils, and mixers. They have 65% of their equipment in Colorado Springs which can hold all of it. This is a class B property.

The Denver property is 2.09 acres and has 11,330 square feet of buildings space made up of the main 2 story office and an industrial mostly storage building. This is a class C property. The bankruptcy had a commercial real estate broker give a Broker’s opinion of current value of each property in November 2021 on both locations. Their opinion for the CO Springs properties was 2.4M and 2.2M for the Denver location which is in central Denver, CO and is 2 acres, has a very similar office building with 2 maintenance Bays, 2 outbuildings, and has 35% of the equipment. The properties are part of the bankruptcy and can be bought together or just one or the other.

It makes sense to buy the business and the Colorado Springs property if the buyer wants to organically grow the business since they can easily do work all over the state and beyond without a Denver location. If the buyer wants to fund faster growth back to 15M in revenue or higher, the Denver location would also make sense.

Support & Training

The two managing owners would like to stay with our without ownership post closing

Reason for Selling:

Restructuring

Listing ID: 32839

Contact Broker

  • In order for our sellers and brokers to track interested parties, the seller/broker contact information we have will be immediately displayed once you click request.

    Please send me more information about this listing. My contact information is as follows:
  • This field is for validation purposes and should be left unchanged.

Similar Listings

Similar Equipment For Sale

[custom-layout id="31567"]