Contract Promotional Product Producer

Financial & Assets Details

About the Business

Business Description

The Company is one of the largest contract, wholesale promotional products/advertising specialties (“ASI”) producers in the Intermountain West. Their 3 primary services include screen printing, embroidery, and heat transfers. The sellers have grown the business significantly since they purchased it, going from 18 employees to 80, and adding equipment.
Recent expansion into a new facility (owned by the sellers in a separate entity) includes room to add another three auto presses and three 6-head Embroidery Machines plus additional Heat Transfer machines. The new facility, along with the purchase of new printers, dryers and embroidery heads, has not only been an opportunity to streamline the operations, making them more efficient and more cost-effective, it has allowed the Company to increase its capacity from around 25,000 pieces per week to over 150,000 pieces per week. Their commitment to grow their capacity is key for their customers since they are the production and service arm of their customers -- they have recently purchased more new equipment to position the company for continued growth.
Their contract- and wholesale-only model means that they only work with ASI companies who outsource their production. The Company does not do work with direct customers. Rather than competing with these customers, they provide professional, affordable and timely production services, allowing them to focus on their sales and marketing efforts.
The Company works with some of the largest and best promotional companies from all around the United States and into Canada. One of the Company’s key competitive advantages is their proprietary enterprise software system, which fully automates the Company’s processes, from job bids and ordering to drop-shipping directly to their customers’ customers.
Along with their enterprise software and systems, the Company’s fierce focus on the quality and timely production are almost unparalleled in the industry. The “duff” rate, or percentage of errors in the completed materials, is around 1.1%. This is virtually unheard of in an industry where 3% is the standard duff rate. They are also able to turn around most jobs within 3-5 days of order; a turnaround time unmatched by other contract apparel decorators. This focus on quality and service means that the Company is not forced to compete purely on price. They offer levels of quality and customer service that most other decorators can’t match, and so are able to target and achieve 40% gross margins, high for contract decorators.
The majority of the Company’s new customers come through word-of-mouth and referral. They have a “preferred decorator” status with one of the largest ASI Distributors in the U.S. They also have good and growing relationships with several other top promotional companies in the country.
The owners are selling the company to focus on other business and personal interests. They have a strong preference to sell the facility to the business acquirer as well, but would consider a long-term lease that would allow them to sell the real property to a third-party investor. Asking price for the real estate is $3.9 million.

Seller Financing

some seller financing may be negotiable for a qualified buyer

Support & Training

negotiable as needed

Reason for Selling:

other business interests