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We’ve all heard about the competitor who sold his company for eight times EBITDA. Presto, you extrapolate an 8X multiple for your business and that’s a lot of money. As a success fee-oriented partner, we are just as enthusiastic about getting you the best price and terms for your company as you. Know that all businesses are unique and no two bring the same management, competitive advantage or business profile. As a result, it’s important to engage an experienced intermediary who will review your strengths and weaknesses and research market comps to determine a general valuation range for your company.
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Seahawk
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$7.35M Rev, $1.54M EBITDAR Water Treatment Equipment OEM
- Revenue:$7,350,000
- Cash Flow:$1,544,000
- Inventory:$2,400,000
- FF&E:$491,000
- Real Estate Available:included - FMV $1.5M
- Location:U.S.
This 40+ year old equipment OEM to water treatment facilities ("SEAHAWK") seeks a new owner. SEAHAWK products are used in a variety of industrial and municipal water treatment applications. SEAHAWK assembles its products from components provided by its suppliers. Operations are easy and straight forward. Sales come from reps, web inquiries, or tradeshows. Approximately 50% of sales are for replacement parts from its long-term installed base of systems.
This business is one of many owned by the seller. In fact, the President spends about 10% of his time on this business and 90% on other businesses. He typically visits this operation once a quarter. It’s not been run with a focus to grow it, rather, it’s run to achieve certain profitability. There are several easy initiatives that will materially impact growth.
The current President oversees several companies for the owner and retains a small stake in this business. He’s open to staying on board and being part of the go-forward plan. He is also open to strategic buyers who acquire the operation and integrate it into their own operations and sales systems.
This will be an excellent company as an add-on to water treatment plant equipment OEMs or as a small platform for someone looking to do a “buy-and-build” in the water treatment equipment space.
Facilities
The company leases its facilities from a related-party entity. The sellers anticipate the real estate will be included in the transaction (FMV $1.6M). The real estate includes unique water facilities for testing the equipment the Company sells.
Market Outlook / Competition
SEAHAWK has seen moderate growth over the last 4 years. Given its 40+ year history, the Company enjoys the benefit of thousands of installed units representing potential future replacement product or part sales. This business is sleepy. It enjoys a responsible onsite day-to-day manager. The President is remote and oversees several businesses from ±1000 miles away. The business will benefit from dedicated focus.
There are various competitors who provide equipment to perform the processes provided by the Company’s products. Management estimates the annual market for its specific products is $60M-$75M annually. The President would focus on growing through acquisition to pick up 4-5 other products that are also sold to water treatment facilities.
$7.35M Rev, $1.54M EBITDAR Water Treatment Equipment OEM
Revenue
$7,350,000
Cash Flow
$1,544,000
Location
U.S.
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Saturn
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$11.3M Rev; $2.1M Enviro Service Growth Opportunity
- Revenue:$11,302,000
- Cash Flow:$2,100,000
- Location:U.S.
SATURN, a one-stop, diverse environmental services provider seeks a majority recap to support the continued growth of their proprietary service offering that’s driven 47% CAGR from 2021 to 2023. An experienced team offers multiple solutions to address environmental services around regulatory compliance, testing, clean-up and sustainable disposal of hazardous and non-hazardous materials. Their services include permitting and licensing, environmental site assessments & testing, compliance monitoring, waste evaluation, treatment and handling, hazardous waste management, industrial hygiene, storm water inspections and maintenance, and underground storage tank services. SATURN's commitment to excellence and sustainability makes them a trusted partner in navigating complex environmental issues for multi-site service operators across the United States.
While the Company enjoyed exceptional growth the last three years, they’re in early innings given recent environmental IP development. They seek a proven growth partner with experience in environmental and industrial services to support this growth.
Saturn notes they have not seen another individual company providing their value proposition and solution to the market. When customers learn of it, they typically terminate relationships with multiple vendors to get the total environmental solution offered by Saturn. The Company is currently contracted with three of the top ten operators nationally who require their services and are in meaningful conversations with others.
What we love about Saturn:
Saturn’s business is comprised of thousands of small ticket service items ($100-$500). Most customers engage with the Company via multi-year Master Service Agreements outlining the specific fee for services. The Company performs consistent routine services that often uncover additional services to increase the visit from a basic $100 fee to a $500, $1,000 or $10,000 service. The base service and other services are regulated and required. Given their one-stop shop and proprietary disposal solution, they are gaining market share at a rapid rate. This is a highly predictable business.As a result of recent growth investments and the development of their proprietary IP, the Company is getting inquiries for services beyond what they can handle today. This is a growth investment where management will stay, retain a meaningful equity tranche and drive SATURN for the next 4-6 years to take advantage of its IP and strong market demand.
Facilities
SATURN offers full service to many customers where it has infrastructure to support those services, and partial service to others where they haven’t fully built out their infrastructure. Management’s goal is to expand facilities to offer full services to all customers and to be the de facto leader in its offerings nationally. They expect to achieve national coverage within 5-6 years with the right partner.
Market Outlook / Competition
SATURN's capabilities are only recently gaining national traction and attention. Their IP provides an environmental solution for customers that incumbent service providers don’t offer. Furthermore, being a one-stop-shop has provided the Company with a significant advantage over its competitors. The regulatory environment for the services are complex and often outside the core experience set of facility managers. The owners of the facilities appreciate off-loading these regulated services to professionals who have a better solution for their business, their managers and their facilities. The right buyer will discover SATURN as an excellent opportunity to grow with existing customers and capitalize on their recurring revenue from a range of services.
$11.3M Rev; $2.1M Enviro Service Growth Opportunity
Revenue
$11,302,000
Cash Flow
$2,100,000
Location
U.S.
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ASTRO
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$6.5M Rev; $1.7M EBITDA TTM Precision CNC Operation
- Revenue:$6,500,000 TTM
- Cash Flow:$1,700,000 TTM
- Inventory:$831,000
- FF&E:$4,900,000 (at cost)
- Location:Southeast
ASTRO is a complex-part precision CNC machine operation, holding AS9100D and ISO 9001:2015 certifications. The Company enjoys great margins and specializes at producing prototypes (20% of sales) and handling low to mid-volume production (80% of sales) for various industries, such as medical, aerospace, robotics, electronics, and more.
In business for over 40 years, the Company offers a variety of capabilities resulting in quality parts serving many long-standing customers. Their customer list includes large companies, universities and research organizations requiring complex solutions. ASTRO provides highly-automated precision solutions, with excellent palletizing capabilities to drive lights-out operations.
The Company is operated by a robust management team and a talented machining staff - approx 20 total employees. Owners will consider growth recap or full sale scenarios. They are open to a significant rollover with proven operators.
Facilities
Company operates in approx 21,000 with some room for additional growth in their Southeast region. Company has invested heavily in new equipment over past 5 years.
Market Outlook / Competition
ASTRO operates out of a metro area with significant healthcare and technology presence. Ample opportunities for growth with existing customers and new accounts.
$6.5M Rev; $1.7M EBITDA TTM Precision CNC Operation
Revenue
$6,500,000 TTM
Cash Flow
$1,700,000 TTM
Location
Southeast
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CASTLE
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$29.6M Rev, $3.5M EBITDA Manufacturing Divestiture
- Revenue:$29,600,000
- Cash Flow:$3,500,000
- Location:U.S.
Castle represents an exciting ±$30M corporate divestiture opportunity (selling a division of ParentCo) as either a platform or add-on acquisition to financial and strategic buyers. Castle contract manufactures highly engineered products to OEMs spec for HVAC, electronics, pharma, automotive, military, powersports, EV, industrial products and other product manufacturers. The ParentCo manufactures branded products that are sold directly into another industry. Castle’s parent began construction of a new manufacturing plant and will relocate all their attention and branded products to that facility. The ±$30M contract manufacturing division will remain at the existing facilities.
The contract manufactured products are technical in nature and made from a wide variety of raw materials to achieve the specific technical attributes and outcomes spec’d by customers. With diverse end markets, it’s likely you own a product with Castle components. They can be found in thousands of technical applications. The Company enjoys a diverse customer base with the top five generating 12%, 9%, 8%, 7%, and 7% of revenue.
Castle is led by an experienced team of manufacturing, operations and sales professionals who will remain with the division. Opportunities to participate in ownership (with either a strategic or financial buyer) are welcomed. The industry is large but geographically fragmented. It’s possible to grow this business by acquiring other technical contract manufacturers in other geographies.
Castle’s Parent Company will retain senior finance, HR and IT staff so those G&A areas will need to be replaced. Management estimates $500k will cover the cost of replacing this staff and we have already adjusted EBITDA to reflect this ($4M EBITDA reduced by $500k for replacement of these G&A staff). ParentCo seeks some flexibility as they move their branded operations out of the Company’s current plant. They expect to move out in April or May of 2023. After the move, the contract manufacturing division will have ample room for growth and can support tripled revenue in current facilities. All key operations and sales leaders stay with this division. They currently run the division. The ParentCo CFO will support transitioning the finance function to a new CFO. The business is highly professionalized today and they don’t expect a heavy lift in supporting hiring new leaders for HR, IT and finance.
This is a very professionally operated company and the division benefits from being part of a well-run organization. The division hasn’t been the priority of the Company, rather, the companies own branded products have received most of ParentCo’s attention and resources. It will be great to align with a strong financial or strategic partner who wants to grow this operation.
Facilities
The contract manufacturing operation in run from two manufacturing plants.
Market Outlook / Competition
Castle has grown nicely with its customers over the years. When it wins business, it is typically for the life of the OEM product, i.e., for HVAC, Castle provides product for the life of the OEMs HVAC model, for automotive it’s the life of the auto model, for power sports equipment it’s for the life of that model, etc. This means the business is VERY STICKY and predictable. Castle’s product engineers work with their customers in designing products for the replacement models driving long-term customer relationships. The market served is highly fragmented geographically and an opportunity exists to acquire multiple “Castles” in other markets or to greenfield in other markets.
$29.6M Rev, $3.5M EBITDA Manufacturing Divestiture
Revenue
$29,600,000
Cash Flow
$3,500,000
Location
U.S.
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Blade
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$28.7M Rev/$2.7M Adj EBITDA Commercial Landscaping Co
- Revenue:$28,700,000
- Cash Flow:$2,700,000
- Location:East Coast
BLADE, a multi-location, multi market commercial landscaping company provides maintenance, new installation, hardscapes, and snow removal services to a diverse client base. The combined mix of business between its locations is approx. 60% maintenance and snow, 37% installation, 3% hardscapes. BLADE has grown its maintenance revenue over the past few years to emphasize a recurring business model. Both locations are growing nicely, with one location in a rapidly growing MSA. Most new install clients transition into maintenance customers once the installation is completed.
The seller seeks a full sale. He is absentee from the business and enjoys strong operating managers at each office. The management team runs day-to-day operations and reports their performance to a central core team daily. Third generation family members handle financial oversight and HR/administrative duties. Service line managers handle their respective divisions. The Company is updated and equipped with industry leading software and technology. This technology investment has increased operating efficiencies and contributed to a nice annual growth rate of 7% over the past 4 years. The facilities are well kept with capacity to support growth. BLADE presents an intriguing opportunity to be a platform or a solid add-on opportunity for a large strategic.
Blade employs about 300 total employees including 100+ H2B team members across its locations.
Facilities
The Company operates out of two locations on the East Coast of the U.S.
$28.7M Rev/$2.7M Adj EBITDA Commercial Landscaping Co
Revenue
$28,700,000
Cash Flow
$2,700,000
Location
East Coast