Well-Established, Very Profitable Structural Testing Laboratory
For over 30 years, this structural testing lab has been providing exceptional and trustworthy services. Its revenues and EBITDA have been consistent for past several years, with revenue of over $1M and weighted EBITDA of $560K. It offers an exceptional EBITDA margin of close to 50%. The company serves primarily the market in California and offers Non-Destructive Testing, Specialized Field Service Testing, Technical Support, and Laboratory Testing. A large part of Laboratory Testing is for FRP composite testing application, a niche testing that the lab does. About 80% of revenue is from Field services and about 20% revenue is from the Laboratory Services. Its customers are primarily Developers, Architects, Contractors, and Referring Engineers who drive work to them. The Company typically does on an average about 100 projects in a year. It is quite selective about the projects it undertakes and as a result, it wins about 75% of the proposals it submits. Since this Lab is considered as an essential business, its operation has not been seriously impacted during the current pandemic, although some projects have been placed on temporary precautionary hold because California has been severely hit and became a hot-spot. The business, however, is expected to return to pre-Covid level or even possibly surpass it, as delayed projects get started, probably in late 2020 or early 2021. The Company has a staff of 9-12 people, which include an experienced operational manager, two senior engineers and 6-8 Field Technicians. Its intellectual property includes detailed templates for proposals and reports for various types of work and operations manager and senior engineers are all involved in this. KEY FEATURES OF THE LAB ========================= * Consistently profitable, high EBITDA margins * Excellent growth potential (Company has no marketing, not even a website) * Established network of loyal business sources – steady pipeline year after year * Market niche, quality equipment, staff * Three decades of developed intellectual property REASON FOR SALE, PRICING ========================== The owners have run this business as a lifestyle business and have been able to live a very comfortable lifestyle running this business. But for a growth-oriented buyer, there are plenty of opportunities to grow – by online marketing (the Company does not even have a website at present), by formal marketing process, by geographic expansion, and / or by offering more services. The founder, having worked in this field for 45 years and running this Company for 37 years, is looking for well-deserved retirement but is also committed to offer transition help and also longer-term part-time consulting help to the buyer to ensure that the buyer is successful and his legacy lives on. Sellers are expecting a fair price with a fair multiple on the EBITDA that takes into consideration the many positives that the business comes with – consistent revenue, extremely high EBITDA margin, reliable pipeline, capable staff to carry on the operation, and excellent growth prospects.