Lifesaving Medical Products Distributor
This established profitable Michigan based distribution business offers an array of transformative German designed and made lifesaving medical products and devices. This Michigan business has exclusive North American distribution rights using its own U.S. trademarks, Department of Defense National Stock Numbers, (NSN’s), coveted Cage Code, and premier Vendor/Supplier codes.
Revenues are generated by both direct company sales efforts and through highly qualified independent commission salesmen. The customer base represents “the best of the best” in four major industry categories:
- Department of Defense….(think U.S. Special Operations Forces)
- Sports Medicine….(think all 32 NFL teams + major university athletic programs)
- Major Drug Distributors….(think McKesson, Cardinal Health and other industry blue chips)
- Big Retail….(think Walmart, Meijer, Rite Aid and others)
During the past several years, annual revenues for this debt-free business have ranged from $2.5 million to $3.5 million while generating average annual SDE (seller’s discretionary earnings – the historical, normalized cash flow to pay a new owner-operator and service debt) of $395,000. The cost basis inventory of ready-to-ship (in the Michigan warehouse) finished goods from Germany typically approximates $350,000.
Throughout the company’s 25 year history, the owner-seller has been laser focused at working with his German partners to develop cutting edge medical devices and products to solve real-world, everyday life-threatening situations. This business with its plethora of FDA documents, trademarks, NSN numbers and long-term Vendor codes takes “barriers to entry” to a new dimension.
For the past decade, the business has operated in an 8,000 square foot facility in a desirable suburban area in southeast Michigan. The business has had a month-to-month lease the entire time which will give the buyer flexibility with respect to relocating to a more cost effective space and perhaps to a location better suited to the buyer’s needs.
There are eight employees, five of whom have administrative, clerical and/or management functions. The other three work in the warehouse with “pack and ship” responsibilities. The seller and broker feel that a modest realignment of salaried staff could save the buyer annually a low six figure amount. The seller is past retirement age and as such plans to retire after conducting comprehensive transition training for the buyer which could include meeting the company’s major North American customers and its German supplier.
On the deal front, the seller does not believe that a great business has to be overpriced. He is offering his business for sale for $1.95 million which is a 4.0x multiple of SDE + cost basis of on-hand finished goods. ($395,000 x 4.0 = $1,580,000 + $350,000 = $1,930,000).
The seller envisions an asset sale in which he retains cash and A/R while retiring all liabilities. Included in the sale will be all fixed assets, inventory, contracts, intellectual property, and all vendor codes. The seller also plans to carry a six figure seller note for the successful buyer. For more information on this once-in-a-lifetime business opportunity, please contact Mike Greengard ([email protected] or at 616-450-0707).