Profitable, Cash Flowing Specialized Restoration Company

JANUARY 12, 2023

It has been a great ten year run for the owner operator of this unique and profitable restoration business which offers specialized technology for salvaging a variety of damaged electronic equipment and fine artwork. The owner of this unparalleled operation is now debt free and ready to spend more time with his grandchildren.

Operating out of a 15,000 square foot updated warehouse in a desirable suburb of a major West Michigan city, the company has a favorable lease cost of only 6 % of revenues. The buyer can continue with the current lease or move to a location of his or her choice.

The business has a niche all its own. Using state of the art technology, this franchise resale has become a leader in the industry and is backed by a franchisor with 70 successful sites across the United States. The business has a large, protected territory and prior to Covid experienced regular annual double digit growth rates. In 2022, sales grew 22 % over 2021 levels. In addition, 2023 sales are forecasted to increase significantly as a new general manager comes on board in the first quarter and additional customers come on line.

In the past decade a large number of solid and loyal relationships have been developed with insurance adjusters, contractors, universities, municipalities and the like. This has resulted in a steady flow of business coming into the company throughout the year. Demand is non seasonal and the existing customer payments generally come from insurance companies so receivables are not an issue. The small number of consumer projects are paid by the customer upon delivery of the restored product.

The current owner now spends a minimum number of hours per week managing the operation while enjoying more time on the running trail and with his grandchildren. In his absence, the existing management team successfully runs the operation with little oversight. The eight full time employees are highly skilled, long term, loyal and non-union.

A new owner committed to growth could pursue opportunities like textile restoration and increasing adjuster education on how to salvage more damaged items. Unlike most businesses today, the owner has a pipeline to attract new skilled employees who embrace working for this growing company in a desirable environment.

Over the past four years the business has averaged revenues of over $ 980,000 which resulted in an average annual SDE (SDE = Sellers Discretionary Earnings, is the normalized, historical cash flow available to pay an owner-operator and service debt) of $ 149,000 over the same 4 year period. In 2022, despite the owner’s reduced hours, SDE hit a high water mark of a very impressive $ 190,000 ( a 45 % increase over 2021 !)

With a favorable SDE multiple of 2.95x the business is priced aggressively at $ 440,000. The seller envisions an asset sale in which he retains cash and A/R while retiring all liabilities. The buyer, in addition to receiving the good will of the business, receives all fixed assets with a cost basis value of $ 146,000. For a qualified buyer, the seller will carry a mid - five figure note.

If you are searching for a profitable business with significant barriers of entry, neither cyclical or seasonal variations and priced less than $ 450,000, this could be the company for you. For more information on this outstanding opportunity please contact Steve Huntley at 616 902 0898 or [email protected]