Established over 20 years ago, the Company is a niche distribution and export management company specializing in the sales and marketing of primarily US and some European-manufactured automotive and industrial equipment and supplies to a specific geographic area of the world. Markets served include a range of buyers of premium automotive and truck oils and additives, garage equipment, tools for electrical contractors, test instruments and much more.
The ambitious owner is in his 50s and is seeking an equity partner to become actively involved in the daily operations and strategic direction of the company and to assist him in launching a series of high-potential growth initiatives. Over 5-7 years, the present 100% owner would like to transition the business fully to this partner. The owner believes that the best fit for the business would be an individual with operational and financial savvy that is seeking to transition from their present career into ownership over a period of time. It is not critical that this individual live in close proximity to the Company headquarters as most of the day-to-day business is conducted via email or Skype. The owner is seeking a partner to buy in at 25-49%, however remains open to a majority buyout.
The Company is headquartered in the Midwest US, where all administrative and purchasing functions are carried out from a leased 1,000 sqft office. It maintains a leased 7,200 sqft warehouse in the southern US. This warehouse receives and maintains inventory, consolidates export shipments and loads containers for overseas shipments. It is 1.4 miles from a large-scale port. The Company’s sales office is located overseas where a team of sales representatives attend trade shows, process sales orders, offer support and training for customers and handle customer relations in general. There are a total of 9 employees, including the owner.
- The Company exports its own proprietary line of automotive lifts. Sales are projected to grow as much as 10x from only two years ago! Note: Lift pictured is a stock photo and not the Company’s product.
Financial Overview
2016 Revenue: $5,433,154
2016 EBITDA: $373,717
2016 SDE: $465,713
Investment Highlights
Proprietary Product Sales – The Company has recently begun selling its own branded automotive lift products. Customer response and sales have been very encouraging. Sales may hit $500,000 in 2017, up from only $50,000 in 2015.
Growth Plan Established – The present owner has spent a significant amount of time laying out the details of an ambitious, yet feasible plan that will grow the Company to $15MM in sales and $1.5MM in EBITDA over 5-7 years.
Diversified Product Offering & Support – The Company is able to consolidate a broad variety of products (including many automotive and industrial consumables) and ship them cost-effectively. Established US and European brands have relied on the Company for over 20 years to sell their products and provide training.
Niche Market Access – Significant cultural, linguistic and logistical barriers to entry exist in serving the Company’s core customers. It would be extremely difficult for a startup to compete in the space effectively.
- There is an opportunity to stock more inventory, which would allow for consolidation and lower shipping costs for customers. This is part of a multifaceted plan to grow the Company to $15MM in sales.
Growth Opportunities
New Markets Identified – The Company has identified other geographies that are ripe for expansion. Infrastructure and wealth are rapidly building in this market and many of the Company’s products cost less than currently competing products. Establishment of a warehouse and sales office to serve this market would likely lead to significant growth.
Sales/Marketing/Advertising – The Company relies almost exclusively on trade shows to develop sales leads. It does not maintain a Customer Relationship Management (CRM) database nor does it employ any consistent or structured means of staying in touch with leads. Additionally, the Company maintains its website only in English, whereas the majority of its customers speak other languages. Investment in a CRM to track sales leads, email marketing to stay in touch with leads and make them aware of product offerings, a website upgrade including SEO, PPC advertising, social media, mobile advertising and translation tools would significantly expand the Company’s messaging and marketing reach, and would naturally increase the flow of new sales leads.
Establishment of Distribution Center – Presently, the Company places orders for inventory upon receipt of customer orders. The inventory is shipped to the US warehouse and then processed for overseas delivery. In sum, it can take 4-8 weeks for delivery. Establishing a warehouse and housing inventory in the region would cut down on transit time by 2-8 weeks. Smaller more frequent orders would be possible and customer satisfaction would improve.
Carry Additional Inventory – The Company’s current model requires that it only purchase inventory when it has a confirmed order. However, because customers pay for freight, they often want their entire order consolidated before shipping. This results in lag time as the various products show up at the Company and are put into the container. Stocking inventory will allow the Company to ship faster by having many of the most sought after products on-hand. The key here is that the Company has the sales histories of many fast-moving products (about 75% of them), the data of which will allow for predicting how much of what key product to stock up on.
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Upon doing so you will receive a link via email to review and sign our confidentiality agreement. Once signed we will be able to further the conversation and send you the confidential Offering Documents. Please contact us at [email protected] with any questions. Interested parties must demonstrate proof of financial capability, sign a Non-Disclosure Agreement, and answer a few brief questions. Inquire today about this established Niche Distribution & Export Management Company!
