Business Listing

Listing ID: S00227

***DEMO Valu4Sale 3rdPartyOnLine
Business Location and Business Sector
Location
British Columbia, Canada ( BC Lower Mainland )
Seller believes this business could be relocated to almost anywhere in British Columbia, should Buyer have reason to do so.
Primary Business Sector
Manufacturing
Fabricated Metal Products
Fabricated Textile Products
Miscellaneous Manufacturing Industries
Secondary Business Sector
Wholesale Trade
Tertiary Business Sector
Retail Trade
Sale Price, Terms, and Valuation Basis
Purchase/Sale Price
Sale Structure: Share Sale % of Sale Price Multiples
Balance Sheet Value $ 2,875,526 57.4 % of Sale Price 3.26 times ebitda
Goodwill Value $ 2,135,283 42.6 % of Sale Price 2.42 times ebitda
Purchase/Sale Price $ 5,010,809 100.0% of Sale Price 5.68 times ebitda
Terms of Sale to Qualifying Buyer Share Sale % of Sale Price
Down Payment/Cash to Close $ 2,505,405 50.0 % of Sale Price
Vendor TakeBack Balance $ 2,505,404 50.0 % of Sale Price
Purchase/Sale Price $ 5,010,809 100.0% of Sale Price

Sales and Earnings
Current Fiscal Year at 5 months ytd
Fiscal Year(s) Dec 31/13 Dec 31/14 Dec 31/15 Dec 31/16 5 mo YTD May 31/17 YTD annualized to FYE Weighted average
Sales $ 6,947,529 $ 7,136,680 $ 6,875,695 $ 7,115,669 $ 3,684,766 $ 7,480,240 $ 7,166,303
Earnings (ebitda) $ 511,309 $ 1,124,244 $ 937,355 $ 878,656 $ 544,382 $ 810,409 $ 882,927
    May 31/17 - 5 months & estimated annualization Estimated Sustainable
Fiscal Year(s) Sales Earnings (ebitda)
Dec 31/13 $ 6,947,529 $ 1,124,244
Dec 31/14 $ 7,136,680 $ 1,124,244
Dec 31/15 $ 6,875,695 $ 937,355
Dec 31/16 $ 7,115,669 $ 878,656
May 31/17 - 5mo YTD $ 3,684,766 $ 544,382
YTD annualized to FYE $ 7,480,240 $ 810,409
Weighted average $ 7,166,303 $ 882,927
Included in the Sale & Excluded from the Sale

Purchase/Sale Price is simply the sum total of Balance Sheet value plus Goodwill value.

Balance Sheet Value is that tangible value which is equal to the net value of Assets included in the sale of the business minus Liabilities included in the sale of the business.

  • In the Balance Sheet to the right, you will see three cells of numbers.  The first represents the full balance sheet of the company as at May 31/17. The far right cell represents those Assets and/or Liabilities from the first cell (or portions thereof) that are intended to be retained by and/or satisfied by the Seller or Company prior to the close of sale, and excluded from the sale.
  • The center cell represents those Assets and/or Liabilities intended to be included in the sale, which, as at May 31/17, are valued at $ 2,875,526; which is the net of $ 3,980,758 Assets minus $ 1,105,232 Liabilities.
  • Included is $ 2,099,501 net working capital, which is equal to 73% of total Balance Sheet Value

Goodwill Value is that intangible value attributed to the now established business relationship between the company and its customers that generates the current level of sales and earnings under current ownership, and that are expected to continue into the future under new ownership, assuming no other change.

Using sales and earnings of the past several years as a means by which to estimate what sales and earnings levels are apt to be the next few years under similar conditions, sustainable sales and earnings are estimated at $ 7,166,303 sales and $ 882,927 earnings, and attribute $ 2,135,283 to Goodwill value.

Pricing Summary:

  • $ 2,875,526 Balance Sheet value is equal to 3.26 times $ 882,927 average annual earnings; 2,099,501 of which is working capital, equal to 2.38 times the average annual earnings.
  • $ 2,135,283 Goodwill value is equal to 2.42 times $ 882,927 average annual earnings.
  • $ 5,010,809 Purchase/Sale Price is equal to 5.68 times $ 882,927 average annual earnings.
  • $ 5,010,809 Purchase/Sale Price is equal to 3.3 times $ 882,927 average annual earnings, plus $ 2,099,501 working capital included in the Purchase/Sale Price.
  • Balance Sheet value will be subjected to change between now and the close of sale, resulting from normal business activity through until the close of sale, and to the extent of such changes in balance sheet value, the Purchase/Sale Price will change.

Working Capital May 31/17 (included)

Assets
Cash on Deposit 963,737
Accounts Receivable 315,826
Inventory, WIP 1,925,170
Other Working Capital -
Liabilites
Bank Debt/LOC -
Account Payable 896,799
Other Current Payables 208,433
Net Working Capital
2,099,501
Balance Sheet May 31/17
ASSETS
Balance Sheet Included Excluded
Cash 1,095,606 963,737 131,869
Accounts Receivable 315,826 315,826 -
Inventory, WIP 1,925,170 1,925,170 -
PrePaid - - -
Other Working Capital - - -
Other Current Assets 17,729 - 17,729
Total Current Assets 3,354,331 3,204,733 149,598
Capital Assets - - -
Due from Shareholders - - -
Other Long Term Assets 776,025 776,025 -
TOTAL ASSETS 4,130,356 3,980,758 149,598
LIABILITIES
Bank Debt/LOC - - -
Accounts Payable 1,028,668 896,799 131,869
Other Current Payables 208,433 208,433 -
Total Current Liabilities 1,237,101 1,105,232 131,869
Long Terms Debt - - -
Due to Shareholders - - -
Other LT Liabilities - - -
TOTAL LIABILITIES 1,237,101 1,105,232 131,869
SHAREHOLDER EQUITY
Share Capital 169,144 169,144 -
Retained Earnings 2,164,982 2,147,253 17,729
Current Earnings 559,129 559,129 -
BALANCE SHEET VALUE 2,893,255 2,875,526 17,729
TOTAL LIABILITY & EQUITY 4,130,356 3,980,758 149,598

Business Premises are NOT owned by the Business and are NOT included in the Sale.  Business premises are owned by myself, also the sole owner of this Business and are leased by the Business for the amount I believe to be fair market.  Business premises consist of approximately 55,000 square feet including a manufacturing floor, warehousing and sales and administration offices. Post sale, these business premises will remain available for lease by the business indefinitely at the same fair market rates.

Financial Information

BALANCE SHEET VALUE:  Of course, much will change on the Balance Sheet with every bit of business conducted between today and the Close of any Sale of the business, and to the extent those changes shall increase Balance Sheet Value, the Sale price shall increase or the extent those changes shall decrease Balance Sheet Value, the Sale price shall decrease, but, at at May 31, 2017, the Company is being offered for sale in a Share Sale that includes everything the Company owns and owes, with the certain following exceptions:

  • As at May 31, 2017, we have EXCLUDED $133,869 from Cash on Deposit.  This amount is to offset and to pay the $133,869 in credit card payables (below) which are also to be EXCUDED from the sale.
  • As at May 31, 2017, there is $17,729 shown in other current assets.  This amount is made up primarily of loan receivables; loans to employees and/or other parties and are personal and non-business related.  None of such shall remain repayable to the company following the sale and thus have been EXCLUDED from the sale.
  • As at May 31, 2017 there is $131,869 payable on credit cards. Any and all credit card payables will be satisfied at or prior to the Close of Sale and are thus EXCLUDED from the Sale Price. 
  • The net effect of the above combination reduces the current Net Book Value of the Balance Sheet by $17,729, as you can see in the above.

It should be noted that we have INCLUDED the $963,737 Cash in the Sale Price, which amount approximately offsets the $896,799 in Accounts Payable. Leaving that amount of cash may or may not be deemed advisable, and if not, it is anticipated that the amount exceeding acceptability would be spent just prior to the Close of Sale on the reduction of the $896,799 in Accounts Payable and wound be a direct offset. But to the greatest extend possible, cash will be left for the new owner to administer.

The $5,010,809 Selling Price is equal to 5.7 times $882,929 *ebitda (earnings).  The $5,010,809 includes $2,099,501 Net Working Capital, in which case, Selling Price minus Net Working Capital calculates into a Net Selling Price of $2.911,308 which is equal to just 3.3 times *ebitda.  (*ebitda = earnings before interest, taxes, depreciation and amortization.)

As at May 31, 2017, at 5 months year-to-date; sales are $3,684,766 with *ebitda of $565,649 (15.3%). Current year sales and *ebitda are projected to close out the year, 7 months from now, at about $7,480,244 with *ebitda of $839,775 (11.2%). That is based on a calculation very consistent with the company's historical sales and *ebitda cycle over the past five years, of first 5 months vs. last 7 months.  Sales have generally been 49% during the first 5 months and 51% during the last 7 months and over the past 5 years the company's average *ebitda has been 10.9%.

About the Business

The business of the Company is the Manufacture, Importation, Installation, Service and Repair of a varied line of durable (non-perishable) hardware products.  Imported product is largely that which have been custom made offshore and to our own specifications.  In-House Manufacture and Fabricated product include that of the Company's own proprietary line of equipment, and we also custom manufacture products to the unique design specifications of our customers. Installation, service and repair in not a large part of our business, but is a part from time to time.  We also purchase and resell various products from other domestic manufacturers and distributors. Our major product lines are Imports, (which we generally call standard) and the In-house manufactured products, (we generally call custom). The products we purchase locally and resell, we call drop-ship because we generally do not stock these items but order them drop shipped to directly to our customer.  I mention this because, if you find this business of sufficient interest to go so far, you will find these descriptions in our financial records.

Since Jan 1, 2012 through May 31, 2017; 5Yr 5Mo sales have totaled $39,474,000.  Purchases by our top 500 customers have accounted for $21,221,000, equal to 54% of total sales.  Over the period, we sold product to 17,250 customer accounts; 6,200 of whom made purchases of $1,000 or greater; 800 of whom made purchases of $5,000 or greater.  The company has a great warranty track record.  Warranty issues are relatively minor and customer satisfaction is high.

About the Market(s) of the Business

Our market is largely two part; Retail and Commercial.

Our retail customers include both repeat customers and one-time customers.  Repeat customers include Dealers (resellers), Public Entities (cities, towns, clubs, schools, etc.,) and many Private Individuals.  Our commercial customers are largely repeat customers.  Since 2012, the split between the two has quite consistently been 52% Retail and 48% Commercial.

Our marketing is accomplished largely through our websites and trade shows, both in Canada and the USA.  And our customers include both Canadian and US, who contact us generally via website, telephone, email or post and whom we contact largely in follow-up with respect to the above contacts.  We have very few walk-in transactions.

Ownership & Reason(s) for the Sale
The Business was founded in 1998. The Business has been under Current Ownership since 1998

I am selling the business because I have developed other business interests and after at 16 years in this business, would really just like to be free to concentrate my full time and efforts on these other business endeavors.

I founded this business in 2001 and, for the first several years, my time and effort were entirely concentrated on this business. Then I purchased another companion business in 2007 and for the next while the companion business captured much of my attention. Then in 2011 and 2012, I became involved in other non related endeavors and quite honestly, just started to lose focus on this key business that has been the engine for all else that I've done. It has take a while to come to realize and acknowledge that the keen interest and drive I once had for this business has simply deminished over time, not that I'm disintersted, but just have too many other things on my mind and this business too often gets lost.

Over the past few years, I have tried to refocus my attention on this business but it is refocusing that lasts for a short while only.  I've tried to turn management over to others, but have found it tough to actually let go and allow the team to manage, and so far that has just not worked out, although we are trying it again right now.  The business has remained profitable through it all however, but it is no longer growing, and it should be growing; there is still lots of room.
 
I think I am an entrepreneur with good concepts, with drive and high energy much more I am a good business manager administrator.  I am now realizing that[ it is undeniable as I look back and have concluded that it is simply time to sell and move on.

The business is relatively non-technical and does not take an industry specific individual to run and grow this business.  It takes a person with good business acumen and a business background, and one with some sales and marketing experience and acumen and some with new interest and drive. The company employs a very good team of long standing employees. We've had very light turnover over the years and the technical know-how is well in place amongst these employees.

Anticipating of course that in order to ensure a smooth transition of ownership and control and to assist the buyer in learning the business, any buyer will be asking for my continued involvement at some level for a reasonable period of time following the close of sale, I am fully prepared to provide such help and assistance. My hope and plan is to be totally free from this business within a year or so, although, with other business interests in the area, I have no plans to leave the area and would continue to make myself available beyond that time, on an as need, if needed basis.

Other Information

CONFIDENTIALITY and NON-DISCLOSURE    Within this presentation we have told you a great deal about our business but have very deliberately taken care not to identify myself or the business either directly or indirectly by conjecture.  There is great deal more information ready and available should you be interested in pursuing the potential to purchase this Business in the intermediated manner provided through Business-Trader.
 
And, I thank you for your time and interest thus far.

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