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Business for Sale: Itching to Make Your Mark?

Looking to make your mark in business? Check out this rubber-stamp manufacturer.
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Business for Sale

THE BUSINESS: If you want to make an impression on a company in transition, then consider this rubber-stamp and marking-device manufacturer. The owner purchased the company in 1980 and has been in the process of reinventing the Bay Area business ever since. Growth prospects in the company's original niche -- rubber stamps -- leveled off (some might say they nearly died), and technological changes prompted moves to computer-driven phototypesetting, desktop publishing, sign making, and everything else that could mark the spot for the manufacturer's 800 or so corporate and government-agency clients. The newest "new thing," which currently accounts for about 40% of the company's annual revenues, is selling another manufacturer's product -- a pricey high-tech marking machine -- to customers who want to do it themselves. Included in the deal are computers as well as engraving, sign-making, and other equipment worth about $200,000, but no real estate; the company leases its 6,700-square-foot facility from the owner for $3,500 monthly. The owner is selling the business for personal reasons, but his staff of about a dozen, including two marketing professionals, may be willing to sign on with the next owner.

PRICE: $575,000

OUTLOOK: Nobody's going to rubber-stamp this evolving business as a sure thing, but in the current economy, that's reality. The good news is, there are plenty of growth opportunities here, especially if the buyer can cross-market the company's various products to its existing, if fragmented, client base and develop additional customers outside California, Oregon, and Washington. A relatively new Web site, launched for $30,000 to publicize some of the company's products, has potential, particularly if someone figures out how to convert its "hits" into sales. And how's this for ironic? The latest opportunity involves a revival of rubber stamps, which now have cachet among hobbyists and design mavens.

PRICE RATIONALE: X marks the spot, at least when it comes to the company's well-positioned sales price. Since the deal involves a hybrid with 60% of its revenues coming from manufacturing and 40% from distribution, it makes sense to rely on two valuation methods. Manufacturers currently sell for about 50% of annual sales. Based on last year's projection, that should amount to about $375,000 (or half of $750,000, which is the manufacturing-sales estimate). Distributors sell for 30% of annual sales, which amounts to $150,000 (30% of the $500,000 of annual distribution sales). That adds up to a suggested sales price of $525,000.

PROS: When you're playing survival of the fittest (and most versatile), your work life is guaranteed to be challenging.

CONS: If you don't thrive on change, your company may be stamped out.

Bay Area Marking & Identification Company
GROSS REVENUES EBITDA* OWNER'S
COMPENSATION
1999 $1,448,403 $162,791 $60,746
2000 $1,054,302 $174,241 $57,318
2001** $1,250,000 $230,893 $57,893

*Earnings before interest, taxes, depreciation, and amortization.
**Projected.

Inc has no stake in the sale of the business featured. The magazine cannot confirm the accuracy of financial or other information offered by the seller. Inquiries should be directed to Kris Karlson, at Bowman/Hanson, at 415-292-5227.


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Business for Sale: Itching to Make Your Mark?


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Last updated: Feb 1, 2002




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