Since releasing the business to the market we have been asked to clarify what a new owner would need to bring to the business going forward. This business has the technical and experienced staff required to do the job, the business would benefit most from a new owner with experience dealing with large corporates, compliance and/or running large teams. Don’t get caught up in the service the company provides, look more at the company’s market position.

Sale Price: $3,500,000.00 (Three Million five hundred thousand dollars)

EBIT: $900,000.00 (2 year average)

This quality business has been operating throughout New Zealand for over 10 years. The business operates as the market leader in the installation and de-installation of heavy industrial machinery throughout New Zealand and around the world.

Their client list is a veritable who’s who of New Zealand’s premier Manufacturers and also Machinery suppliers throughout New Zealand and the world.

The company operates from a quality South Auckland base with 95% of the work domiciled in the North Island. There are real growth opportunities in the South Island and it is the owner’s opinion that a new owner should set up shop there. He currently has a couple of machines based in SI.

The vendor’s reasons for exiting the business is that he feels that the business has grown to the limit of his capabilities. He feels that he is holding the business back and the business going forward would benefit by having a new owner that offers management skills and planning required for the future growth already identified. The owner is very happy to stay on in a “hands on” way in the business. He loves the work but feels he has had enough as an owner.

A new owner that has had experience in Engineering or Transport fields would be beneficial but not necessarily essential. If a new owner wanted substantial future growth they would need to take on new staff, set-up regional (and possibly off-shore) offices and invest in new plant and equipment.

Key Points on valuation:

• 10 years in business
• Multiple Blue chip clients
• Plant Valuation of $1,568,100 plus GST
• Good debtor book
• Growth opportunities in Australia
• Very long serving and qualified staff
• Excellent performance during economic downturn
• Owner will stay on long term on a salary because he enjoys the work.
• Extremely high barrier to entry
• Excellent market acceptance
• Development of proprietary products not just a service company

We have positioned the business on a 2 year average of where it stands in the current economic downturn. The business has fared very well compared to the majority of businesses we have seen and should be rewarded accordingly. We have settled on a multiplier/capitialsation rate near 4 (or 25%) because of this and the companies forward work expectations, growth opportunities, market dominant position and owners willingness to stay on.

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