This distribution business, founded in 1990, has a niche that enables it to have 50% gross profit margin and 24% EBITDA margin on sales typically ranging from $7.5MM to $9.7MM. One owner retired in 2002 and the other works part-time one day a week. The company has been run by the president, CFO and IT manager for the past several years. The president and IT manager desire to stay on under the new owner; other key employees are well compensated and expected to stay. The owner /CEO comes in once pr week and will not need to be replaced.
The products require technical sales and the company has 5 sales engineers, all of whom have over 18 years of experience selling these products. The market is dominated by three global manufacturers and they all send customers to this company for smaller orders. Those manufacturers do not stock inventory, have a lead time of up to 26-32 weeks and a $5,000 minimum. They have no interest in selling small quantities but prefer quantities of 100,000 and up.
This company sells to R&D departments of semiconductor companies, semiconductor assembly houses, defense and military contractors, aerospace companies, medical device manufacturers, universities and others who require small quantities and prompt delivery. Since this company is virtually the only company having both technical sales staff and inventory of product, it is able to ship within 24 hours of receiving an order and also has a $500 minimum order size that is more acceptable to its customers, who can pay by credit card.
The owners are well past retirement age and are selling to finally retire.
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11,500 sf R&D building Monthly rent: $30,000 New lease available