6X 2020 Adjusted EBITDA
Real Estate Available
This well-established specialty distributor of technical safety equipment primarily to large manufacturers seeks a financial partner with proven experience growing niche, value-add distributors both organically and through acquisition. The owner, in his 70’s, seeks a financial buyer who will pay shareholders a fair price for the company while also providing the Company’s key managers an opportunity to co-invest for ownership.
The business focuses on niche, value-add products for specific technical safety applications. 1500 SKU’s for products that include skin or whole body protection from heat, cold, chemicals, hazardous materials and sharp objects like glass, knives or metal; eye protection from chemicals, particles, bright light and dust; hearing protection from loud manufacturing processes, engines, motors, etc; fall protection from high manufacturing processes, distribution activities or supply processes; lung protection from dust, chemicals, hazardous materials, manufacturing process fumes and more. This is a technical sale where specific products are required for each application. The Company excels at making sure their customers get the right safety products for their specific technical specification so their rank and file workers stay safe. The Company sells through a direct sales force and on-line. Inventory turn at 24X annually, an exceptional level. 4 key managers seek the opportunity to invest in the company. The Company undertook a strategic initiative to improve their margin profile by getting rid of low margin “reseller” customers, as well as, getting better prices from their suppliers and service providers given their sales volumes. The result of these activities was a doubling in EBITDA margins to approximately 14% in 2020.
Sales, EBITDA and cash-flow are very consistent month over month, as are sales to the company’s top 100 customers. There is no customer concentration. The Company enjoys double digit growth in its online business each of the last three years and mid-single digit growth in its direct sales channel. Employee and customer retention are excellent.
Valuation expectations at 6X 2020 Normal EBITDA.
We seek to close transaction by December 31, 2020 and will limit management visits to the top 5-6 most qualified buyers. Prospective buyers will qualify as follows: They are investing from a dedicated fund and can close in 2020; have direct distribution company growth experience and have online sales growth experience. The most qualified buyers will also bring experiences and understanding of technical safety products either from other investments in manufacturing or chemical manufacturing processes or safety products and services sales. Time is of the essence. If you qualify for this opportunity please contact us.
The Company operates from 30,000 s.f. warehouse and office facilities
Market Outlook / Competition
The market for technical safety products remains consistently strong for American Manufacturers. Management and ownership don't mess with safety as the wrong products can cost employees their lives or promote injury. Getting the right products for the right application is critical. The Company enjoys supplier relationships with many manufacturers of technical safety products.