This business designs, manufactures, and sells their patented extraction, separation, evaporation, distillation, and isolation equipment which can be used for the Cannabis (Marijuana and Hemp) industry, biopharmaceuticals industry, and many products that use essential oils like lavender for soap, etc.   Most of their sales to date have been in the Cannabis industry but that is because they don’t have any salespeople and these are the conferences the owners have attended.  This advanced technology equipment processes with maximum efficiency and consistency in product quality with cost reduction in mind.  The company is 6 years old and had revenues of 8.6M in 2019 with 4.5M in earnings which is a profit margin of 52% with no sales force and designing and building the equipment themselves.  As of July 19th, the sales price has been lowered to $8M and they will keep 35% of the company which makes the company worth $12.1M.  Once you submit the NDA link below, you will get an email with the data room which has a video interview, walkthrough, and projections for 2022 and 2023 indicating revenues of $40M plus based on a capital infusion by the buyer of an estimated $1.5M to move their location to a bigger facility, to buy parts to increase production, and to hire 2 salespeople and train them.  The 2 owners will both stay 30 hours a week for a salary plus a bonus while they will keep their 35% equity and continue to grow the company.  They also just restarted production of their equipment with the conferences coming back in September. Keep in mind that this company had grown steadily while expanding their product lines, revenues, profitability, and market share UNTIL COVID happened.  Details below especially in the data room where you will find several video interviews and a walkthrough of the business and its products.

 

Please click this link to get the Non-Disclosure Agreement (NDA)  https://businessbrokercolorado.com/buyer-profile/

If it is blue you should be able to click on it, if not please cut and paste that to a URL line. This will allow me to send you the Full Sales Package containing a Detailed Data Room with Financials, a Comprehensive Interview with the Owner, and a Walk-Through of the Business.

For Sale: Design and Manufacturing Extraction Company

The 2019 revenues were 8.6M with 4.5M in earnings.  2018’s revenues were 5.4M with 2.7M in earnings.   The company started from zero in 2014.  The company has grown with no debt except short-term payables, has had no bad debt, and 100% of signed contracts have been executed.  The company has had been very consistent growth until 2020, making the impact of Covid easier to quantify for this company.  The combination of the addition of 2 new products representing a leap forward in the industry, increasing recognition and reputation, an increasing amount of states and people in those states benefiting from CBD, and the slow return to conferences will easily mean that 2022 will show record revenues and earnings.  In fact, if they find the buyer they are looking for, they predict that the company will have 42M in revenues with over 30M in earnings within 2 years of the closing.  Before you doubt this, please fill out the NDA link above so I can send you the sales package where you can watch all of the videos in the data room.  The data room also has a Pro-forma that the owners spent a lot of time trying to get right.

Their processing equipment is normally sold after an in-person/on-site demonstration, which yields a closing rate of 37%.   They are frustrated by the shutdown of conferences and travel because they had just developed two exciting new products which have the potential for high revenue with solid margins for years to come.  The new equipment’s accuracy, quality, and efficiency will complement their existing product lines; solidifying them as market leaders.  Keep in mind that this company was growing at an average of 50% per year until COVID.

The company has a significant following and customer base with over 42,000 Instagram followers and customers in 21 states and multiple countries. They are confident of strong growth, given their new products, strength of existing products and states yet to fully legalize. An additional 29 states should become fully legal in the next couple of years,  which indicates they have yet to see full market potential. Additionally, with, their knowledge, demonstration equipment, they could process cannabis in their facility with revenues between 2.2M/yr. (crude oil) to 15.6M/yr. (d8 acetate), which is in addition to equipment sales and manufacturing. While they have historically marketed to the cannabis industry and it is the largest market for their equipment, there are other untapped and very lucrative markets (i.e. essential oils(botanicals), laboratory sciences, education, pharmaceuticals, and beer/wine industry).  Their products can be used in many other industries and would be the most modern and accurate extraction and evaporation equipment in many industries.  They believe their ability to accurately create an exact formula to industry standards should be mandated throughout the world.  In fact one of their patented products has the ability to efficiently perform liquid-liquid separation on many different types of solvents. Lastly, the owners have proved their equipment demand, ability to stay ahead of the market with new products, and overall business viability, but want support to go to the next level so they can spend more time on design which is what they enjoy and what will take this company to a much higher level.

The owners have spent years developing high-tech products and services in the medical, pharmaceutical, aerospace, and nuclear industries, these best friends developed and patented a best-in-class evaporation system, which included never before seen spray technology.

They have earned a reputation as an industry leader and believe that the company would have done over 12M in revenues in 2020 without COVID AND without their new products.  With conferences and travel returning in the 4th quarter of 2021 they are confident that their new and established products will pick up where 2019 left off in late 2021 leading to a bigger 2022 than they would have had in 2020 without COVID.  They believe their new products will increase both revenues and profitability substantially.

This company focuses on using “Made in America” components and locally owned and operated suppliers, whenever possible.  The high-end quality combined with the creativeness, expertise, and genius of the owners is why they have become industry leaders so quickly.  They have already designed and built their next generation of equipment and the owners are willing to stay for up to two years after the closing to assist with the success of the company.   This is a “Fun” business to own that is growing and the Owners want to make sure the new owner(s) realize the companies full growth and success potential.

  The total value of the company with the 8M for 65% of the company has been lowered to 12.1M which is now only 2 3/4 times their 2019 earnings and is a great price after adding products to increase their 2019 revenues when the conferences and travel return in September of this year.  Their preferred structure is that they will get 8M at the closing and they will keep 35% in equity and will stay with a salary and a bonus post-closing.  They plan to attend 3 conferences this fall which should result in a lot of sales.  They are and will increasingly be the leader in accurate and scalable extractions which will only see a long-term increase in demand.  Both owners are willing to stay long-term with some form of an earn-out and/or retention of some ownership as part of the sales price.   They expect 8M down payment with the rest being some form of keeping equity and/or an earn-out.   They will be looking for a cash infusion of approximately 1.5M to get their production ramped up also which means a new location also.   They believe the future is extremely bright with an expected doubling of states and demand expected over the next couple of years.  This is a LLC and will most likely be an Asset Sale. The business will be offered with the Sellers keeping their cash, AR, and will be transferring the business debt-free.

Details:

They have a great reputation for the quality of work, dependability, and for fair dealings.  The seller will agree to full Reps and Warranties to a solid legal and business standing.   They have no legal battles.  The seller will offer  “to off-set” against the sales price for any liabilities originating before the closing and indemnify their financials.

Growth Opportunities: There are so many ways to grow revenues and profits for this company.  To put that into perspective, they did 8.6M in revenue with 3 employees not including them while none of them are salespeople or on any commission structure.  In fact, only the owners went to the conferences and did the demonstrations at their location.  They also only manufactured their products after a sale was made.  The new owner can hire a sales force, fund fully functional product inventory ready to ship after a sale, increase the number of states and industries that they market to, allow them to continue to develop new products, etc, etc.  A new owner can use their 5 star reputation to advertise for more work, create articles pointing out their quality and the positive impact their products could have in not just Cannabis but in pharmaceuticals, beauty products, laboratories of many types, etc.  Plus, the new owner can run a 2nd shift processing 8 hours a day with just one of their extraction machines which would generate an extra 10M in revenue and 5M in profit for each unit that is run 40 hours a week.

They have 3 trustworthy, competent, and reliable employees.  They have room for at least 15 employees if the new owner wants to grow this company but will be looking to move into a larger facility when it makes sense.  The Sellers believe their employees are loyal and will stay after the transition.  The owner will offer a full-time transition or stay up to two years from the closing depending upon the structure of the purchase.

Their location is leased in Denver, Colorado.  The building is 4697 square feet and they pay 11.38 per square foot which is 4,454 per month triple net.  The building has many custom improvements including 400 AMP 230V, 3 phase service with 75 KVA 480V 3 phase transformer.   The business has a full camera set up in and around the business and the building.  There is 15 months left on the lease which can be renewed and/or renegotiated, or the units may be purchased for additional monies.  They did 8.6M in their 4,697 square foot space but need 25,000 square feet asap to do 40M to 100M in revenues.

Thank you for your consideration,

Jeff C Eisnaugle

Business Broker Colorado, LLC

Direct 303-905-7607

Fax 720-524-6482

jeff@businessbrokercolorado.com

This is prepared by Business Broker Colorado, LLC.  It was not created by the seller and neither the Broker or the Seller are responsible for its accuracy.  Buyers are responsible for their own due diligence.  Neither the Broker or the Seller will indemnify or guarantee any forward looking statements or projections.  The information contained in this e-mail message is confidential and may be protected from disclosure. Please be aware that any other use, printing, copying, disclosure or dissemination of this communication may be subject to legal restriction or sanction. If you have received this e-mail message in error, please reply to the sender and delete it from your computer.

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