Industrial Services Business In Johannesburg For Sale

Business description

This business provides specialist services in the fields of (1) industrial waste recovery and (2) dust suppression technology.

1 The waste recovery process allows recovered waste to be fed back into the production cycle resulting in major cost benefits.

2 Dust suppression is a major environmental issue with companies that produce large amounts of polluting dry waste such as mines and chemical plants, and cost efficient systems are in great demand.

The two processes are based on German technology that is probably the most effective and cost effective available in South Africa. s such, the business has no direct competition.

The technology for both processes was introduced to RSA by a German company that provided many of the large mining companies with plant and equipment over many decades. The Germans withdrew from left South Africa around 10 years ago, leaving behind more than 100 dust suppression plants, most of which are now in urgen need of refurbishment.

The current owner of the technology acquired the plant and equipment whem the Germans deprated and resumed operations on a much smaller scale in the Vaal Triangle.

The business flourished over the ensuing years. During the past few years, unsolicited demand for the services of the business has grown rapidly from many of the original clients all over southern Africa.

The business is therefore sitting on a vast treasure chest of potential major corporate clients that are require their dust suppression and waste receoivery installations to be refurbished and managed by way of extended, cash generative contracts with gross margins of betrween 70% and 90%.

With new long term agreements continuously cominmg on sream, pre tax trading profits are currently sitting on around R5,0 million/year. This is very likely to double over the next 12 months. New clients have been been obtained with very little (if any) marketing effor .

With cash generation strong and immediate, very little working capital is required to grow turnovers.

The owner is quite confident that, if he were to focus on the marketing function throughout southern Africa, he will hugely grow revenues. But, despite the high competency levels of his current management team and 27 strong labour force, he realizes that he cannot properly fulfil the two functions of running the business on a day to day basis and the full time nation wide marketing function.

He has therefore elected to sell the business at a very attractive price to a candidate that has the management skills and passion to grow the current business hugely, and then to continue working for the business in the capacity of marketing director (or some such) on a commission only basis. Thus, if the business fails to support the sharp growth that the owner expects, the seller loses out. The seller thus has a very strong vested interest in the continued success of the business and his technical skills and know- how will therefore be available to the seller on an indefinite basis. . This establishes a win-win scenario for the buyer.

The asking price for the business is R12,0 million, based on a guaranteed EBITDO of at least R5,0 million for the year to February 2013 .

The price includes high value, specialized equipment and the unique proprietary intellectual property.

Business Operation

Employees:

27

Years established:

15