Denver Stone Fabrication, Design and Installation Company, 88 Percent Recurring Revenue, Great Reputation

Financial & Assets Details

About the Business

Business Description

15 Year Old Stone, Fabrication, and On-Site Installation Co

Update 8 11 23: He is a salesman and when he bought his partner out who ran the “business” in Dec 20, he quickly realized that he did not enjoy managing the business side and it resulted in him putting this business up for sale. He then took a one-month trip to Europe, bought, installed, and trained employees on a new CNC stone cutting machine, and took his foot off of the gas by spending less time working. It destroyed his earnings and recently he realized that he needed to focus back on sales which is why the revenues and earnings have been improving again recently. His trailing 12 months of revenues to July 31 2023 were 4.15M with 516K in earnings which are better than his 2022 earnings of 482K. He expects his earnings to get better each of the next 4 months based on him needing a break last summer and his profitability reflected this. In other words, if you annualize the last 9 months, this business is priced below the market. He is looking to sell the business and stay on as a salesperson working for mostly a commission and will also consider selling 50% or more to a new partner who wants to be responsible for the business portion.

The trailing 12 months of revenues to July 31st 23 were 4.15M with 516K. The 2022 revenues were 4M with earnings of 482K. 2021 revenues were 5M with 793K in earnings. 2023 is showing grow again. This business will be showing a low multiple of earnings by year end based on its expected earnings over the next 5 months compared to last year and this also proves that they are not being impacted by rising interest rates and tightening credit. Most custom home builders work off of a back log and get through downturns just fine.

Until December 31st 2020, the current owner was responsible for sales and his ex-partner was responsible for the business side. The result was that he realized that being responsible for both reduced his time and results on the sales side while realizing he didn’t enjoy the business side of the business. He will consider staying on as a salesperson with a heavy emphasis on commission-based compensation and will also consider keeping some ownership for the right buyer(Keeping some ownership is not a deal breaker).

88% of their revenues are recurring. They get 75% of their revenues from custom builders building new homes and doing remodels. 25% are builders doing commercial jobs. Their jobs include the biggest arenas, hotels, and they work with several of the largest custom home builders in Colorado.
They offer custom-fit Granite, Marble, Limestone, Onyx, Travertine, Soapstone, Quartzite, Porcelain, and Quartz. They do Kitchens, Bathrooms, Fireplaces, BBQ and all kinds of Special Projects. They do mostly residential work and have a very high percentage of referrals. They have a full pipeline again currently.

This company has a great reputation as proven by a 5 star Google Rating, 4.9 star Houzz, 5-star Yelp, 4.8 star Angi, and A+ with the Denver Better Business Bureau. The company has won 3 Houzz Awards, 4 Houzz Badges, awards in every year of the Parade of Homes, and is a member of the Marble Institute of America. The company also has a .87 modification rating for their workman’s comp insurance which means they have been a very safe business for the last 3 years. This company’s ratings are very valuable to the new owner. It takes years to get this many positive reviews and a model that works.
You also get approximately 700K in current value Assets! This includes 560K in Equipment which includes his one-year-old Park Industries Saberjet XP CNC Sawjet, 95K in 3 Trucks and 2 cars, 25K in Tools, and 20K in Office Equipment.

The owner maintains a 40-hour work week but takes a lot of time off with family. He will either stay on in sales or offer a full transition for as long as the new buyer wants him to.

Location: The business is located in Denver.

The sales price is 1.6M plus inventory(Currently estimated to be 150K) which is a great price for a company with 4.2M in revenues, 88% Recurring Revenues, 5 star Google Rating, 3 months of backlog, and 700K in assets. Even though, he took a bit of a break last May to September, he is back creating growth again and doing it in a difficult interest rate environment.

This is an S Corp and it can either be an Asset or Stock purchase. It is priced as an Asset Sale but can be adjusted to a Stock Sale. As an Asset Purchase, the business will be offered with the Seller keeping his cash, AR, and AP and transferring the business debt-free. This should qualify for an SBA bank loan for a qualified buyer.

Details:

The buyer will also step into a solid model from marketing to installation. The heavy lifting is already done. The company has a new and impressive website which is just one of many reasons this business will not change the day after the closing. They currently have a normal amount of work in progress, and a full backlog. 2022 should finish strong.

The company has 15 trustworthy, competent, and reliable employees who all go to the office during regular business hours and three 2 person crews. Many of the employees and subs have worked for the company for many years. The Sellers believe all employees are loyal, love their jobs, and will all stay after the transition. The Seller bought his partner out at year end 2020 who signed a non-compete and is no longer in the business.
They have a great reputation for the quality of our work, dependability, accurate bidding, and for fair dealings. The seller will agree to full Reps and Warranties to a solid legal and business standing. They have a great record for safety (OSHA) and NO legal battles. They have a workman’s comp MOD rate of .87 which is very low. This is a clear indication of how well run their business model is. In fact, the seller will offer “to off-set” against the sales price for any liabilities originating before the closing and indemnify their financials.

Growth Opportunities: He bought a new and higher volume fabrication machine a year ago and left his old one set up so they have excess capacity. The new buyer can keep him on as a salesman and add other salespeople. Improve the website to be more interactive and do more SEO and/or pay per click. Add additional NEW inventory and enlarge the showroom. Add a 2nd location in Northern Colorado where they will be building for the next 20 years plus.
Their location is leased with a 12,000 square foot building with a 7,000 square foot shop, 5,000 square foot office space, and a 9,000 square foot yard. The lease is 12,418/mo but has a $0.30 per square foot COLA increase each June 1st. The business is located in Central Denver. There is a 5-year lease ending June 30, 2027.

I am 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,
Jeff C Eisnaugle
Business Broker Colorado, LLC

Growth & Expansion

He bought a new and higher volume fabrication machine a year ago and left his old one set up so they have excess capacity. The new buyer can keep him on as a salesman and add other salespeople. Improve the website to be more interactive and do more SEO and/or pay per click. Add additional NEW inventory and enlarge the showroom. Add a 2nd location in Northern Colorado where they will be building for the next 20 years plus.

Market Competition:

This company has a great reputation as proven by a 5 star Google Rating, 4.9 star Houzz, 5-star Yelp, 4.8 star Angi, and A+ with the Denver Better Business Bureau. The company has won 3 Houzz Awards, 4 Houzz Badges, awards in every year of the Parade of Homes, and is a member of the Marble Institute of America. The company also has a .87 modification rating for their workman’s comp insurance which means they have been a very safe business for the last 3 years. This company’s ratings are very valuable to the new owner. It takes years to get this many positive reviews and a model that works.

Location Details:

Their location is leased with a 12,000 square foot building with a 7,000 square foot shop, 5,000 square foot office space, and a 9,000 square foot yard. The lease is 12,418/mo but has a $0.30 per square foot COLA increase each June 1st. The business is located in Central Denver. There is a 5-year lease ending June 30, 2027.

Support & Training

Will stay as long as needed