MergerPlace

Niche Infrastructure Equipment Rental

Michigan


  • Asking Price: Not Disclosed
  • Gross Income: $7,002,261
  • Cash Flow: $2,780,614
  • Real Estate: Not Disclosed
  • Inventory: $852,711
  • FF&E: Not Disclosed
  • Listing ID: #225860
  • Established: 2011
  • Employees: 7

Business Description

The Company is a deep foundation equipment rental company specializing in limited access drill rigs for micropile and anchor installations. The Company also rents out grout plants and sells hollow bar material. The Company is owned by two owners (“Owner 1 and Owner 2”).

The Company was founded in the fall of 2011. Over the years, it has expanded to include a substantial service offering consisting of auger cast piling, micropiles, helical piers, sheet piling, grouting, silos, and earth retention systems. The Company prides itself on the ability to provide the complete solution, from rig to accessories. Not only will the Company assist the customer in obtaining the correct rig for the job, but the Company will also ensure the success of the job with on-site consulting and can provide every attachment and accessory needed to complete the job correctly and efficiently.

The Owners remain very interested in growing the business and ensuring its continued success. Their motivation for pursuing a sale/investment is to reduce their personal financial exposure in doing so and to team up with the right growth partner to take advantage of significant national growth opportunities in a variety of product and service segments.

Buyers will be required to have a minimum of $2,000,000 in available liquid capital, and preferably industry experience, to receive information about the Company.

Thank you for reading this overview. The extent of the information that we are publicly permitted to reveal about this opportunity is contained in this overview. Please submit your contact information in the provided form. We have automated the processing of NDAs and sending of information for speed and efficiency. You will be sent a link to our online NDA. IF YOU DO NOT RECEIVE THE NDA LINK, PLEASE CHECK YOUR JUNK MAIL. If the email cannot be found, please email info@caldergr.com and request a PDF version.

Once we receive your NDA and answers to some basic questions, the Confidential Information Memorandum (CIM) will be sent to you from the project manager.

IF YOU DO NOT RECEIVE A FOLLOW UP EMAIL AFTER YOU SUBMIT YOUR NDA, PLEASE CHECK YOUR JUNK MAIL FIRST. If you do not see the email there, please email info@caldergr.com for support. Thank you in advance.


Business Details

Primary Business Category: Rental & Leasing Services
Location: Michigan

Company Information

Year Established: 2011
Home Based: No
Franchise: No
Relocatable: No
Number of Employees: 7

Financial Information

Gross Revenue: $7,002,261
Cash Flow: $2,780,614
EBITDA: $2,780,614
Inventory: $852,711
Seller Financing Available: Yes

Property Information

Facilities:

The real estate is owned through the Owners’ real estate holding company. Approximately 25,000 square feet. The Company occupies 3 of the 5 suites in the building.

Growth & expansion opportunities:

Growth Opportunities Include: (1) Capital Injection to Expand Project Portfolio: One of the Company’s main components barring growth is leverage. Current Ownership is fiscally conservative in nature. For example, the Company has a substantial line of credit but hardly ever chooses to use it. Adding a partner(s) who can furnish the capital necessary to expand the Company’s project portfolio could allow the Company to take on more jobs that the Company would have previously passed on. Ownership estimates that the Company passes on 4 to 5 jobs per year due to a lack of desire to take on debt. Partnering with someone who could provide the capital to expand the Company to the next level would allow these jobs to occur, as well as other jobs the Company will not even look at currently. (2) Increase Sales Footprint: Presently, the Company holds a strong national geographic footprint. There is ample opportunity to expand into the Northeast region and the Northwest region, expanding the Company’s already prominent sales footprint. (3) Additional Equipment Opportunities: Opportunity exists to sell a higher volume of hollow bar material, which would require minimal capital and time investment. The Company is mainly involved with micropile drills and grouting units. Adding larger equipment options would be a natural next step for expanding the Company’s rental offering. (4) Take Advantage of Leasing and Rental Options (RPO): Historically, the Company prefers to rent out equipment to customers as their primary service offering. They can also sell equipment at a sizable markup if the opportunity arises. The Company does not currently take advantage of many leasing and rental with purchase option (RPO) opportunities with customers. Leasing refers to setting the rental periods for a fixed period of time that does not change (for example, a 1-year lease agreement). Most of the Company’s rental periods are set on a monthly basis, and duration can change as needed (under allowable circumstances). A common model that the Company’s competitors often pursue is renting the machine to the customer with the intention of selling it to the customer. The Company has focused on a pure-rental strategy, with customers wishing to purchase equipment as an “afterthought” of most rental agreements. Further expansion upon RPO and leasing options could provide customers with more options to choose from. (5) Favorable Industry Trends: The Company serves a stable and fragmented market. A large amount of equipment is still purchased instead of rented or leased. However, renting and leasing have recently become much more popular as customers no longer want to hold and maintain large illiquid assets that are less frequently utilized on their balance sheets. For example, when the construction market crashed in 2008-2009, many construction companies found themselves holding expensive equipment that they no longer needed. Their balance sheets were further worsened because equipment bought on debt increased liabilities, and the amount of cash used for the purchase put pressure on cash flow. Conversely, leased or rented equipment requires only minor outlays from cash flow and do not appear as liabilities on balance sheets, letting renters better finance themselves. Leasing and renting also provide more flexibility because lessees can get rid of equipment after a short time period and then rent newer or more useful equipment. Many of the Company’s customers are construction general contractors. The Construction sector is anticipated to significantly expand over the next five years to 2025 as the economy recovers from the coronavirus pandemic, in addition to the relatively low interest rate environment. Many of the largest industries in this sector are anticipated to experience faster growth following low building volumes over the past five years, with sector growth expected to be primarily driven by improvements in commercial and infrastructure construction.

Competition:

Investment Highlights Include: (1) Specialized and Niche Product Offering: Because the Company's core focus is renting specialized equipment, they can provide custom solutions that other rental equipment companies cannot. Competitors typically act on a dealership model as opposed to the Company’s rental model. In Ownership’s experience, the Hollow Bar industry is more highly saturated but is still small overall. For many of the Company’s customers, the piling projects that they take on are specialized in nature. General Contractors tend to prefer to avoid tying up their capital in expensive, hard-to-maintain equipment that is not used often. Most of the Company’s customers already have a core base of drilling equipment. However, they do not have the deep foundation and repair rigs and materials often required in new construction jobs. This is where the Company comes into play. The Company can furnish the equipment needed on time, with full training provided for. (2) Scalable Geographic Footprint: The Company features a diverse customer base whose geographic footprint spans the United States and Canada. The majority of the Company's sales originate outside of Michigan. (3) Advantageous Market Position: Maintaining and renting niche equipment for specific yet common jobs faced by general contractors has allowed the Company to stake an advantageous market position that faces minimal competition. Owner 1 spent much of his career as a general contractor in the deep foundation industry and built the Company into the space it occupies to meet the needs stemming from the lack of specialized equipment rental businesses. Not only did Owner 1 notice a need for rental options, but also a need for a business that could supply the support, training, and expertise required to complete the jobs. Out of this need, the Company was born. (4) Highly Skilled and Experienced Team: Over the past 10 years, the Company grew from a one-person equipment rental operation to a multi-faceted rental company with a core focus on the niche of deep foundation drilling. Owners have made the necessary investments in staff members to afford flexibility in their work schedules. The Company showcases a highly skilled and experienced team that offers a turn-key platform for growth. Notably, Ownership can go from weeks to up to a month at a time away from the Business without daily operations being affected. The Company’s shop foreman and logistics coordinator handle the brunt of the Company’s day-to-day operations without any need for oversight. A primary differentiator of the Company compared to other equipment rental businesses is the operators’ background in the industry. The team in place at the Company can provide multiple touchpoints for the customer, including on-sight training on how to set up and use the equipment. The jobs that the Company participates in are specialized. Customers do not possess the capital or the know-how to purchase and use the equipment on their own. (5) Diversified Revenue Streams: The Company’s core focus is on the rental of heavy equipment in the deep foundation drilling industry. However, the Company has expanded its products and services offering over the years to include multiple diversified streams of revenue.

Reason for selling:

Owners 1 and 2 describe themselves as “hands-on” entrepreneurs. They enjoy ideas and putting them into action. Over the years, Ownership has grown the Company on a conservative basis and has grown weary of having to bear personal financial risk through debt to purchase large drill rigs. Much growth potential is available to the right buyer(s) with the capital required to fuel growth. Owners 1 and 2 are flexible and would consider both an option to sell the entire Company or reduce their ownership in the Company after bringing the new partner(s) in. The primary reasons for sale include Ownership’s desire to take the Company to the next level while minimizing their personal financial risk in doing so.

Support & Training:

Both Owner 1 and Owner 2 are open to a wide array of possibilities. They would be willing to provide customary assistance in transitioning the new owner(s) in. They would also be open to the idea of taking chips off the table, rolling equity, and continuing with the Company.

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Business Listed By:

Max Friar

Calder Capital, LLC