Business Summary
Selling Price: R 9,5 Mill
Total Sales Annual: R 20,6 Mill
Net Profit Annual: R 3,3 Mill
Investment Returns
2.8: PE Ratio (Price Earnings Ratio, Before Tax)
35%: ROI (Return on Investment)
34x: MPB (Months’ Pay Back)
IMPORTANT NOTE
There are certain terms and conditions and requirements in terms of our agreement with the seller under which we are restricted to introduce a potential purchaser/investor, no detailed operational/financial information will be disclosed without the required documentary and source documents being processed according to the seller's criteria.
Background
The company was founded more than 36 years ago and has expanded over the period with four exclusive distribution areas from two distribution depots. The business supply products to clients which includes the core of the industrial hub of Johannesburg and surrounding areas. The company distribute, bottled gas and all related products such as; welding equipment, welding machines, safety equipment, welding tools, abrasives products, welding rods and grinding discs to the industrial, manufacturing sectors and engineering workshops.
The diverse product range varies from standard consumables to specialized equipment imported from USA & China. Their customer base is small to medium manufacturing and engineering companies whom they service daily with all the types of bottled gas, consumables and equipment. The two depots enable them to react within 24 hours to any need or requirement from their customers and they have built a strong reputation of quality service delivery. Therefore, stock levels and mitigating risk of stock losses are controlled by an integrated control system with simplistic checks and balances.
The business has grown in revenue of more than 25% over the past years and the net profit (EBITDA) before tax grew over the same period rapidly and consistent. The owner has invested in an ambitious repositioning strategy of both depots and the above growth in revenue and net profit can be attributed directly to the restructuring strategy and industry growth in the industrial sector and manufacturing market.
The owner wants to retire after all these years in the industry, but is willing to stay in the business for some time after handing over the business. An approved, prospective purchaser shall have the opportunity to purchase the going concern, depending on his experience and financial ability and whether he purchase the potential business with own capital (unencumbered cash) or with partially borrowed capital (financing loan), representing a maximum of 40% of the total purchase price.
