Well-Established, Profitable Commercial Recycling Business

It has been a great two decade run for this single location, one shift operation which provides personal and custom commercial recycling solutions for manufacturing businesses throughout the greater Grand Rapids (MI) area. The owner now has a second, unrelated business which is more than he wants to handle at this stage of his life. His solution: sell his cash flowing recycling business to a new owner-operator. The seller plans to retain the commercial real estate offering the successful buyer of the value-priced recycling business a competitive long-term real estate lease. The owner’s scale-back could be your opportunity.

The recycling business occupies 11,000 square feet of a 20,000 square foot commercial building with ample road frontage, lots of paved parking, plenty of office space, and room for a couple of other tenants besides the unrelated business owned and operated by the owner/seller of the recycling business. The well-lit facility is also enclosed by steel fencing.

The business which has three full-time, well-paid (averaging more than $25.00 per hour), loyal, non-union employees recycles more than five million pounds of material annually consisting of all kinds of plastics, pallets, freight, cardboard, Gaylord boxes, and more. The business comes with a laundry list of equipment and trucks which have a cost-basis of $400,000 and a current market value of $182,000. The equipment is in good shape which contributes to the dozens of 5-star customer reviews the business has received over the years.

The business has averaged more than $500,000 of annual sales over the past four years while recording an impressive average annual SDE (= Seller’s Discretionary Earnings - the historical, normalized cash flow available to service debt and pay the buyer) of $130,000 over the same four year period. The business is being offered for $509,000 which is the average of two methods of valuation:

1. Normalized SDE x SDE Multiple (2.50) + Market Value of Equipment

2. 65% of Average Annual Sales (enterprise value of business) + Market Value of Equipment

The Seller contemplates an asset sale in which the Seller retains cash and A/R while retiring all liabilities at or before closing. The buyer receives the enterprise value (goodwill) of the business, all fixed assets, and any on-hand inventory. The Seller will carry a generous $150,000 seller note for a qualified buyer, which when coupled with minimal buyer cash ($50,000) and a $310,000 SBA 10 year term loan, will require on average only $63,000 of annual debt service leaving impressively $95,000 of average annual post-debt service cash flow for the buyer in three of the most recent four calendar years. Additionally, as part of the purchase price, the Seller will offer the successful Buyer ample post-closing transition training.

To learn more about this attractive, smaller, modestly priced, high cash flowing business with significant barriers to entry, please contact Mike Greengard (616-450-0707 or [email protected]), or Jane Steele (616-301-4964 or [email protected]).