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Description

OFF-MARKET ‘Q2 2020

Re-Piping Business – Cashflow goes right to bank!
Los Angeles Valley (Relocatable)
Zip Code: 91340

  • Asking Price: $700,000
  • Cash Flow: $340,500
  • Gross Revenue: $1,600,242
  • EBITDA: N/A
  • FF&E: $75,000
  • Inventory: $2,000
  • Established: 1976
  • Employees: 20

Business Description

This well-established Company has provided superior and dependable replacement of residential plumbing pipes from the start to finish and beyond for each job. Not only does the business have a list of happy customers, but it also has a successful turnkey operation with a good reputation, consistent revenues, and excellent profit margins. The Company is also known for re-walling after the pipe replacements are complete, receiving numerous compliments for wall-texturing capabilities by customers with high-end homes.

The expertise comes from a commitment to high quality, dependable service and years of experience in this specialty, making the Business the market leader in the greater Los Angeles area. Services include but are not limited to Copper Re-piping, Pipe Bursting, Hydro Jetting, Pipe Repair, Leak Detection, Leak Fix Re-piping, Trenchless Sewer Piping, and camera inspections. Homeowners are the Business’s primary customers. The company does few commercial jobs, but they are quite capable of should the opportunity arise.

NDA required for release of detailed CIM. ProNova representatives respond timely to all inquiries. We look forward to supporting your business endeavors and being a part of your success.

Detailed Information:

  • Facilities: Are based in a 2,200 square-foot residential property used for storage and staging. The Seller’s own the property which can be purchased separately or leased by a Buyer.
  • Competition: Plentiful but does not deter from profitability.
  • Growth & Expansion: Radio advertising was extremely effective and contributed directly to higher sales, so running more ads would be beneficial. A buyer could also benefit from hiring a sales force to bring in new business. Currently, the Seller, who wears many other
    hats, is the only person actively bringing in new business. Developing social media campaigns would help too.
  • Support & Training: Seller will provide training /transition of office policies and procedures for 2 weeks and 20 hours per week but is willing to stay on for up to 6 months at 20 hours per week if compensated fairly.
  • Reason for Selling: Retirement

Regional Highlights

In the US, demand for HVAC and plumbing 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.

Trend: Modest Gains Expected in 2018 Construction Starts – U.S. construction starts, a demand indicator for plumbing and HVAC contractors, are forecast to increase 3% in 2018 compared to 2017, according to Dodge Data & Analytics. Residential and nonresidential construction starts are expected to grow 4% and 2%, respectively.

Single-family housing starts are expected to rise 9% in 2018, thanks to more older millennials entering the housing market, rebuilding after hurricanes in the southern US, and continued job growth. Modest gains are expected in starts for the commercial (2%), institutional (3%), and public works construction (3%) sectors in 2018.

Industry Impact – Plumbing and contractors can expect growth in single-family housing starts.

Bright Outlook

The seller believes strongly that more radio advertising would greatly increase revenue. Out of all the advertising they have dabbled in, radio was extremely effective and contributed directly to higher sales.

The new owner could also hire a sales force and incentivize them properly. Right now, the Seller is the only salesperson and is solely responsible for bringing in new business, and with other responsibilities, is limited in how much he can accomplish. The company could use new energy and capital.

The owners have worked hard at this business and are very good at what they do, but feel he has reached the limit of his personal limitations when it comes initiating broader growth initiatives and is looking to try something new in another state. The Seller envisions that a young new owner with great energy and foresight could do very well.

There is also room for improvement in creating and managing a strong social media presence (the addition of which would greatly improve online reviews) plus a need to modernizing the Website.

Contact info

Pronova Partners

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