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Refrigeration and Air Conditioning Company

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Sale Memorandum

Refrigeration and Air Conditioning Company


Ref.IA014

Location Nottinghamshire

Asking Price £ 350,000

Confidential offered for sale

Asking price: £350,000 +work in progress
Freehold purchase would be in addition to the asking price of the business
Turnover for 2006 is circa £928,000 per annum.
Gross Profit is circa £506,000.
Currently there is circa £127,000 work in progress.

Asking price includes:

Impressive data base of satisfied and repeat a/c’s
High quality supply chain
Auto cad computer system
1 Mondeo hatchback
1 Mondeo Ghia X Saloon
Misc. tools and equipment
Profitable business
Goodwill
Finance available to buy this business subject to status. All regulated business is passed to independent financial advisors who are regulated by the FSA

Business profile:

This business has been in existence since 1922 and was originally involved in cold storage. The current owner joined the company in 1950 and became the sole owner in 1992.

During the past 15 years the emphasis of the company has changed. 90% of the work carried out is in air conditioning with the other 10% being in Refrigeration and Chiller installation.

The company offer a complete vertical service from conception to design through to installation.

The nature of this industry demands an excellent service and a 24 x 7 call out facility is available to all of its customers.

The company prides itself in its technically skilled workforce and providing its customers with some of the finest brands of equipment available on the market.

The business handled is 90% commercial work, which are often satisfied repeat clients, and 10% private, one off customers.

Equipment:

Apart from the tools and misc. equipment to install the air conditioning there are 9 vehicles which the company own.

They are ; 2 x Transit Connect vans, 3 x Transit vans, 2 x Astra vans, 1 x Mondeo Estate car, & 1 x Mondeo Hatchback.

The computer is an off the shelf system but with Auto Cad Software to enable design work be produced.

Customer Service:

Because of the nature of the business it is essential to offer a round the clock after service. Therefore at all times there is an engineer on call for emergencies.

The company have built up a sound reputation for reliability and offer extended warranties of up to 4 years for customers provided the equipment is part of a maintenance contract with the company.

The technically skilled engineers employed, offer an expert problem solving solution to their customers born out of field experience over the years.

Key Strengths:

This is a company that is tried and tested. The repeat business contracts they earn are with some of the most demanding Blue Chip companies and are testimony to the quality of work that is achieved.

The business is stretched at present with more skilled labour needed to handle the business that is coming in every day. There is considerable work in progress throughout the year and if desired more work and contracts could be taken on.

Turnover has risen in the past year by 27% and Gross Profit has risen by 27%. The current owner believes that this amount of growth could be increased with the correct development of the company.

Growth and Expansion:

This is a business that is built on solid foundations and could carry on making an acceptable profit for the foreseeable future. However with someone new to drive the company and more skilled engineers in the business, it could increase its turnover and profits with an immediate effect.

This is effectively a family run business. Whilst there is a positive cash flow situation in the company, it is slightly hindered by the size of jobs it can accept, something which could be easily remedied.

Key Opportunities:

Over the past 4/5 years the business has been happy to carry on accepting work that has come in by word of mouth. There has been no sales drive or marketing to take the business level forward and the skilled engineers who have retired have not been replaced.

The company cannot cope with the work that is coming in at present and are turning down new lucrative contracts because of the lack of labour.

There is also a possibility to refurbish a cold store facility which lies dormant on the premises. This would need a little investment but could bring in extra revenue.

At present there is a company web-site, but this is out of date and needs a new overhaul.
Premises:

The vendor owns the freehold of the premises (Market Value approximately £200,000) and would be prepared to negotiate either to sell the site in addition to the asking price of the business, or alternatively arrange a lease for the new owner.

The premises are near a town centre and are circa 17,000 sq ft with workshops, storage, yard and office space. There is also parking for 10 vehicles and an unused cold storage area.

The current owner has intimated that the site could, if someone wished, be relocated by the local council, and sold for a possible office/ housing development
Advertising and Marketing:

Very little advertising and marketing has taken place during the past 5 years.
Financial profile:
The business is being offered for sale on a going concern basis, all financial discussions will take place directly between the vendor and all interested parties under the auspices of Turner Butler.

Turnover for 2006 is circa £928,000 per annum. Gross Profit is circa £506,000.

Currently there is circa £127,000 work in progress.
Employees:

There are twelve employees plus the owner at present.
Sales Manager, Service Manager, 6 Engineers, 3 Assistants and 1 Office Staff.
Support and Training:

The owner would be keen to provide a smooth transition.
Reason for Sale:

Retirement.
Turner Butler Disclosure Statement:

This statement applies to information relating to any company or other undertaking or business advertised for sale by Turner Butler (a 'Business')

The information supplied by Turner Butler on its website or in any other promotional material ('the Information') is not and is not intended to constitute an offer for sale of the Business or any assets of the Business or of the shares of any company which owns the Business.

For the avoidance of doubt there is no intention to create a legal relationship which will only come into existence when a written contract for sale and purchase of the shares in or the Business has been entered into

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Any agreements transactions or other arrangements made between you and any client of Turner Butler are at your sole risk and responsibility. The prospective sellers of the Business have provided the Information to Turner Butler. The Information has not been verified by Turner Butler.

You must carry out your own due diligence and satisfy yourself as to the accuracy of all matters. In the case of the sale of shares in a Business the Information has been prepared on the basis that the shares will consist of or include more than 50% of the voting shares and that both the seller and the buyer is either a body corporate, a partnership, a single individual or a group of connected individuals so as to fall outside the scope of regulated activities as defined by the Financial Services and Markets Act 2000. If you are considering a transaction which falls within the scope of such regulated activities you cannot do so through Turner Butler.

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This document is governed by and shall be construed in accordance with English Law and any dispute arising in connection with it shall be subject to the non-exclusive jurisdiction of the English courts

Turner & Co (GB) Limited registered in England and Wales under company no. 2477988 of registered office Savoy House Savoy Circus London W3 7DA, trading as Turner Butler © Shaun Sweeney October 2006

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