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Description

OFF-MARKET ‘Q2 2020

HVAC Co. 34 Years old; offers Strong Client Base
San Diego, California, San Diego County (Relocatable)
Seller Financing: Possible with the right deal structure for highly qualified buyers.
91902

  • Asking Price: $80,000
  • Cash Flow: $75,317
  • Gross Revenue: $322,209
  • EBITDA: N/A
  • FF&E: N/A
  • Inventory: Included in asking price
  • Established: 1985
  • Employees: 4

Business Description:

The Seller has spent the last 34 years building the business into the community fixture it is today. The Company has long been committed to providing comprehensive services to commercial (80%) and residential clients (20%). The Company’s is proud to have had a long list of repeat and reliable clients for many years. The Company offers the HVAC; preventative maintenance warrantees; repairs & tenant improvements services. Revenue breakdown by service: New installation (50%) Maintenance and replacement (50%). According to the Seller, client referrals account for 100% of new business. The Seller does not spend any budget on advertising. The Company has PM/SVC contracts with the customers, which are self-renewing.

This could be an excellent acquisition opportunity for larger organization seeking to expand their book of business.

Detailed Information:

  • Facilities: Home-based. Can easily be relocated.
  • Competition: Always plentiful competition in this industry, but if a Buyer maintains the well-deserved and well-earned reputation for excellence; Company will continue to freeze out local rivals.
  • Growth & Expansion: Experts predict that the market for HVAC-related services is expected to grow at a rate of 6.6% between 2017 and 2021. The new Owner could create a website and engage in social media, hire salesperson, and start some advertising. All of these or other strategies could help boost revenue and profit.
  • Support & Training: Seller will provide 4 weeks of training at 20 hours a week.
  • Reason for Selling: Retirement

Bright Outlook

Industry professionals and the growth of the local community give every indication of the probability that the Company’s success will continue!

Business Trends:

Specialization will be key. More residential and commercial customers are demanding personalization and efficiency options from HVAC systems. Contractors able to offer specialized services to meet those needs should be able to win business.

Industry Forecast – The value of US private and public building construction, an indicator for HVAC contractors, is forecast to grow at an annual compounded rate of 6% between 2018 and 2022. – (Data Published: January 2018)

Regional Highlights

In the US, demand for HVAC contractors can vary sharply based on geography. Cooling systems are less common in regions with more moderate temperatures. For example, in the Northeast, about 45% of homes have central air conditioning, compared to about 85% in the South. About 85% of all homes in the US have some type of air conditioning.

Demand for air conditioning units has increased as populations have shifted to hotter and more humid regions and as housing sizes, particularly in the South, have increased. In colder regions, demand for HVAC installation falls during the winter months as a result of slow construction activity, but plumbers may get more calls if pipes freeze.

The US Plumbing and HVAC Contractors industry includes about 100,000 establishments (single-location companies and units of multi-location companies) with combined annual revenue of about $190 billion.

Most companies in the industry are small: about 60% of HVAC contractors in the US have less than five employees.

Opportunity: Global HVAC Market Forecast to Grow – The market for HVAC-related services is expected to grow at a rate of 6.6% between 2017 and 2021, according to a report by industry analyst Reports.com cited by Air Conditioning, Heating, and Refrigeration News. High tech energy monitoring and “smart” controls are driving the growth. Both technologies help improve energy efficiency and reduce energy consumption, which are key components in new residential, commercial, and industrial construction worldwide.

Recommendations to speed up the process would be to:

  • Like larger and commercial companies whose revenues are split between installation and maintenance do, develop the habit of offering continuing maintenance under long-term service contracts to build that segment without extraordinary effort or cost.
  • Create a Website and engage in social media to raise awareness and flaunt those well-deserved reviews.
  • Seek new sales and marketing avenues. A salesperson could reach out to apartment and condo complexes, area builders (of both residential and commercial projects) and work with other companies in the planning stages of construction. They can also start some advertising. Right now, the Seller does zero advertising.

Contact info

Pronova Partners

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