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This 32-year-old profitable company (currently owned and operated by a private equity group) provides services to a specific department in local municipalities as well as some private companies. The company’s work specifically involves testing of equipment. Both municipal and private company’s insurance rates are determined by maintaining ongoing testing of the equipment. This company is recommended by outside insurance companies to perform testing.
The company continues to grow in number of clients, its geographic footprint, and its services offered. Revenue in 2019 reached more than $3.6M and Adjusted EBITDA was more than $700k. The company has a highly diversified customer base with the top customer representing only 1.2% of revenue and top 10 customers representing only 5.7% of revenue. Customer retention is > 85% and the company has an outstanding on-time arrival record.
The company currently services approximately 1,200 clients in 24 states primarily along the east coast and in the southeast region of the United States. The base for the use of these services is large and service contracts account for much of its revenue.
The company has an unusual opportunity to grow, both organically as well as strategically since the market for equipment testing is large. The company has developed a proprietary CRM platform that has increased margins and operational efficiencies due to the built-in scheduling, billing, and reporting modules. The system is flexible and can be customized according to future growth.
The company has good relationships with similar companies and ancillary service type companies both inside and outside the company’s current areas of operation. A number of these companies have been identified and targeted for acquisition. These acquisitions would increase market penetration, provide organic growth into new geographic areas, and add additional base and ancillary services.
The company operates out of 4 locations and runs multiple crews with employees that have the proper certifications and experience necessary to test the equipment.
4 base operation centers: CT, NJ, NC and AL, plus headquarters office.
Additional opportunity exists to expand into all regions with particular emphasis in the Midwest and Southern regions, where competition is low. The company has identified additional service offerings that have been requested by clients and can be easily implemented. In addition, the company has developed a marketing initiative to target private sector companies that require the company’s services.
The need for services is high due to the economic impact on operating expenses that would be incurred by the client due to lack of testing. Competitors often use sub-contractors, limiting their ability to control the services provided to customers. Employees are trained and managed by the company. Certain services provided can only be performed by certified individuals and the company employs these certified individuals, thereby eliminating the need for subcontractors.
Owner wishes to relocate.
Owner is willing to assist the buyer in a smooth transition for a period of 6 months to 1 year after the sale with a mutually agreed upon employment contract.
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