For sale: a manufacturer of sound isolation booths and acoustics products in southern Oregon.
The business: A couple started this acoustics business in 1999. She designed sound isolation booths, and he built them in the back room of an auto body shop he owned. Today they sell a range of sound-baffling products to recording artists, voice-over talent, the government, and manufacturers.
The company crossed the million-dollar mark in 2004, and the owners say the business is on pace to gross $1.5 million this year. The couple owns other businesses that they would prefer to concentrate on, so they are looking for a buyer who can take this company to the next level. But that's not to say that they're sitting idly by, waiting for a sale. They are in the early stages of building a new facility (adjacent to their present site) that would make it possible for the business to double production. Depending on the timing of a deal, they'll build to a buyer's specifications.
Government purchases represent about 15 percent of sales, a figure that a new owner could increase, especially if he or she has federal contracting know-how. The company could also expand in the audiology market. Currently there are seven employees. The sellers say they will help a new owner during a transition period. They've also prepared extensive manuals on how to operate the business and the manufacturing plant.
Price: $2 million. Assets include equipment, $70,000 in inventory, and three acres of land. The owners would consider financing up to $500,000 of the purchase themselves.
Price rationale: The business is established but relatively small, which means that a buyer would have to sustain fast growth for several years to justify paying the asking price.
Pros: The firm has no debt and could expand in the government and audiology markets. Location is also a plus. A state agency may help finance the deal, and a buyer who hunts and fishes will love the area.
Cons: The region's labor pool is limited, especially when it comes to senior managers. "You don't find an M.B.A. anywhere in our 3,500-population town," says one of the owners.
The bottom line: It's a promising business, provided that a buyer is patient. In order to realize a good rate of return, a new owner will have to focus on long-term growth.
Company financials:
|
Gross
Revenue |
EBITDA* |
Owners'
Comp |
| 2003 |
$928,986 |
$153,605 |
$55,278 |
| 2004 |
$1,194,093 |
$182,738 |
$80,000 |
| 2005 |
$1,087,715 |
$92,216 |
$80,000 |
