Established Hotel Renovation Company
| Asking Price: | $12,000,000 |
| Rent: | $2,850/Month |
| FF&E: | $30,000 |
| Gross Revenue: | $14,000,000 |
| EBITDA: | $4,000,000 |
| Established Year: | 2006 |
High Profit, 18 year old business with a lot of growth potential
Description
This well established and highly profitable company has been in business for 18 years (formed in 2006) and has never had a year of losses, including 2007/2008 and 2020/2021/2022. The company can work in around 40 states and has a steady supply of business from existing/loyal clients and new clients. Half of the jobs are negotiated and half are bid against competitors. The company self-performs 90% of the work with traveling crews that have been informed of a possible transition and are fine with it.
The company runs off of 5 crews that travel the country to renovate hotels (mostly interior work). They’ve purposely kept the company semi-small, but earlier this year have decided to expand substantially. There is more room to grow as the company is constantly turning down work, but with new owners, the existing owners will help add more crews, personnel, and work from the clients, etc..
Financials
2022 revenue is $5.5 million and EBITDA was $615k (2021 and 2022 affected by COVID)
2023 revenue is $8.1 million and EBITDA was $1.3 million
Trailing 12 revenue is $9.8 million and EBITDA is $2.4 million
Sale Price / Structure
The owners are willing to do an earn-out and EBITDA guarantee at minimum $4 million over the following 12 months with the following structure:
• $10 million at financial closing
• 50% of 12 month future EBITDA (paid at the end of the 12 months)
o Ie. At $4 million EBITDA, a $2 million earnout (total compensation is $12 million to Sellers - 3x EBITDA multiple)
o Ie. At $5 million EBITDA, a $2.5 million earnout (total compensation is $12.5 million - 2.5x EBITDA multiple)
o Ie. At $6 million EBITDA, a $3 million earnout (total compensation is $13 million - 2.16x EBITDAmultiple)
Working Capital
We would expect working capital (owners equity) to go back to the owners after closing; or added to the cost. Willing to discuss. Working Capital could be around $2 million with the higher volume.
Reason for Sale
The reason for the sale is the owners are ready to retire. They are currently in the process of replacing themselves with new hires as they currently handle all Project Management, Bidding and Logistics. They are willing to stay on board for up to 9 months with longer term consulting available to ensure the company properly runs and grows.
Data Sharing
In order to see the Prospectus of the company, an NCND (non circumvent, non disclosure) must be signed and proof of funds (or financing) must be proven along with a discussion to make sure that the buyers and sellers are on the same page in regards to acquisition of the company, transitioning and pricing.
