High Cash Flowing Commercial Painting (and More) Co. - SOLD

MAY 06, 2022

The founder-owner-seller of this highly successful 30-year-old commercial and industrial painting and coatings business is ready to retire after he transitions his company to only its second owner. The company has a coveted B to B business model incorporating a number of profit centers including interior and exterior painting, epoxy flooring, and painting of machines and light fixtures to name a few.

Located in a desirable suburb in SE Michigan, the business occupies an attractive, 5000 square foot late model building owned by the seller. The building has all the features of a successful commercial business including high ceilings in the shop area, overhead doors, metal racks, a locked cage area, and ample storage space. The real estate is available for a long-term lease under favorable terms or it can be purchased in a separate transaction.

Facing only a few true competitors in the company’s service area which includes four of Michigan’s most populous counties (Oakland, Wayne, Macomb, and Livingston), the company has access to 40% of Michigan’s total population. The combination of access to a huge customer base, lots of repeat business, solid referrals, and of course a strong reputation, the business does virtually no marketing. Demand for the company’s services is so strong that the May 1st project backlog already extends into 2023 which will obviously be a wonderful benefit for a new owner-operator both post-close and beyond.

The business employs approximately 10 to 15 full time, skilled, well-paid, non-union employees including three crew leaders including a small office staff. During surges in demand, the company augments its own work force with a tight network of tried and true independent contractors.

The seller contemplates an asset sale in which he retains cash and the minimal A/R, while retiring all liabilities. In addition to the goodwill of the business, the buyer will receive all fixed assets including a plethora of painting and coating equipment and rolling stock in excess of $400,000.

For the four year period (2018 – 2021), which of course includes 2020 the first year of Covid-19, impressive annual revenues still averaged nearly $2.0 million. SDE (seller’s discretionary earnings - the historical, normalized cash flow available to pay an owner-operator and service debt) averaged $360,000 annually over the same four year period. Through September 30, 2022 the company is on track to exceed 2 MM in 2022 revenues, and SDE is above $500,000 for the year.

The business is being offered for $1.15 million, a favorable 2.9x SDE. There is ample cash flow to easily cover debt service (both projected bank debt and a low six figure seller note for a qualified buyer) and a $100,000 (+) salary for the new owner-operator.

For more information on this excellent, strong-performing, well priced, niche business opportunity, please contact Steve Kandt ([email protected]).