This Company is presently under exclusive Letter of Intent with a buyer and therefore unable to be discussed. Please submit your information below and we will contact you should the opportunity again become available!
For over 40 years the Company has been providing an extensive range of the highest quality consumable products and specialized equipment for a niche set of industrial applications. Innovative and rapidly growing Fortune 500 medical device, process chemicals, and pharmaceutical manufacturing customers rely on the Company not only for its steady supply of proven and validated products, but also its in-house engineering expertise and custom value-added design capabilities.
The owner of this profitable Company is past traditional retirement age and is looking forward to a smooth transition out of the Company and into full retirement.
The associated real estate, which consists of a modern office and warehouse within minutes of a major interstate highway, is available for sale or rent.
- The Company has been comfortable with its current base of customers for many years and has not made a significant effort to tap new customers in SE Michigan or Northern Indiana, two areas that are technically granted to the Company by its largest supplier’s territory agreement.
Financial Summary
Calendar YTD August 11, 2016 *
Revenue: $1,567,388
Cash Flow: $326,188
December 31, 2015
Revenue: $2,440,684
Cash Flow: $319,197
*Figures taken from internally-generated statements. It is likely adjustments will be made. The Company is performing better on a year-over-year basis.
Investment Highlights
Dedicated Customers – The Company’s dedicated customers are “sticky” for the following reasons:
- Risk Averse Companies – The majority of Company’s customers are from very sophisticated and conservative industries, such pharmaceutical, micro-electronic sub-straight, and medical device manufacturing. They are in an industry that is highly risk adverse. Their focus is on quality, performance and reliability. Because of proven performance and long-term service of the company, competitors offering “me too” products are low level threats.
- Long-established Relationships – Frequent problem solving and constant communication between the Company’s staff and customers over years has enabled strong working relationships.
- “Razor and Razorblade” Business Model – Due to the value-added nature of the Company’s product lines as well as a number of proprietary products that the Company has manufactured, barring a major unforeseen disruption in service by the Company it is extremely unlikely that customers would choose another supplier.
- Consistent Profitability – Not only is the Company highly profitable, but its margins and earnings are consistent. Gross profit is predictably near 38% year after year and owner’s discretionary earnings are typically around 12% of revenue.
- “Razor and Razorblade” Business Model – Due to the value-added nature of the Company’s product lines as well as a number of proprietary products that the Company has manufactured, barring a major unforeseen disruption in service by the Company it is extremely unlikely that customers would choose another supplier.
Growth Opportunities
Develop and Market the Company’s Branded Products – Like many of the best innovations, the Company’s own manufactured products grew out of its efforts to solve real world problems and challenges that were recurrent among its customers. The Company has never attempted to market and sell these solutions nationally or globally, but it is more than likely that such an effort, if properly executed, would be successful.
Growth of Fortune 500 Customers – The Company’s oldest and largest customer is doubling down on its commitment to its geographic center of operation with a massive $140 million expansion planned to begin in 2017. This customer anticipates following this up with an additional $600 million investment over the next 10 years. As the Company’s products are widely used in the customer’s chemical processing division, the Company anticipates growing alongside this particular customer.
Additionally, the Company’s second largest customer issued a “Surge Capacity” letter on September 7, 2016, suggesting that the Company be prepared for spikes in demand.
Developing New Customers – The Company has been comfortable with its current base of customers for many years and has not made a significant effort to tap new customers in SE Michigan or Northern Indiana, two areas that are technically granted to the Company by its largest supplier’s territory agreement.
Consolidation of Distributors – The Company’s largest supplier recently consolidated its distributors and the Company now serves as the flagship Michigan distributor by which orders from three smaller distributors must flow. The Company expects that this may increase sales by 10%.
The BEST way to receive confidential information about this opportunity is to fill out the form below.
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 info@caldergr.com 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 nondurable industrial distribution business for sale!