Thursday 20 June 2019

S-2942-1 JPN Heavy Construction Firm (US)


HEAVY CONSTRUCTION FIRM WITH EXPERTISE IN CIVIL AND UNDERGROUND UTILITY PROJECTS AND IN RENEWABLE ENERGY & POWER SECTORS



Business Description:  Serving the Western United States, the Company is growing rapidly and is well diversified in both the private and public sectors, while establishing itself as a dominant player in the fast-expanding, Renewable Energy Sector. It is also active in the power industry, public works and site-civil residential work. This well-established business has high year-over-year growth and is an approved supplier to key government agencies. The business is split 50-50 between renewable energy and mainstream construction.
Current opportunities include large joint venture projects and increasing demand for wind farms. Significant tail winds will spur continuing growth: Increasing demand for renewable energy—currently an $800 billion market— points to decades of significant growth. The FAST Act will increase federal funding for highway infrastructure by 2.4% through 2020, and power spending, with wind as the fastest growing sector, generates annual spending of ~$100 billion.
In January 2019, the Company began a joint venture project valued at $36 million. In addition, the Company secured a 12-year MATOC [master contract] for perimeter security upgrades valued at $75 million. Upcoming projects already contracted show multi-year growth, including a $20 million wind project and a $25 million wind project to begin late 2019, and a $23 million substation project beginning in 2020.

Distribution: The Company secures business primarily through competitive bidding, but its reputation and performance provide a unique competitive advantage leading to repeat business. Another source of business is its status as preferred vendor for a power marketer.
Operational Strengths: The Company’s significant growth is based on multiple factors: diversification in public and private sectors, and its competitive advantage as i) a government approved supplier and ii) registration as a preferred vendor for a large federal power marketer. 90% of projects are from previous customers that include major power companies and wind farms. Current market demand gives the Company a strong pricing advantage. The Company’s stellar reputation for quality and integrity creates demand for its services, and because it excels in value engineering services, the Company is able to win bids at premium rates. The Company has earned a reputation for a commitment to cost savings throughout a project’s life cycle without sacrificing quality. The non-union workforce and highly knowledgeable operations and management teams operate independently without the need for day-to-day owner participation. Bonding capacity at $50 million supports current projects and future growth.

Transaction: The owner [S-Corp with single owner] seeks to sell 100% of the business and is ready with his management team to partner with the new owner to drive growth. Real estate is available for purchase or lease. Owner will stay on for at least 1 year to insure a smooth transition. Trailing 12-month figures through Q1: $31.5 million Revenue and $8 million Adj. EBITDA.

Financial Summary

2019 Seller Forecast
2018
2017
Revenue
 $36.9 mil
 $24.8 mil
$18.6 mil
Adjusted EBITDA
$11.9 mil
$3.1 mil
$1.5 mil

Other Highlights
Location
Financials
Management Team in Place
Years in Business
SIC Classification
Western US
Reviewed
Yes
10
1611, 1623, 1629, 1794


Direct all Inquiries to:

Gottesman Company
Refer to:  S-2942-1 JPN
Tel: 718-618-5346      UK Office: +44 (0) 7906786505
                                        E-mail: dmj@gottesman-company.com