Very Profitable CT Based Home Systems Integrator Business For Sale

Business description

Asking price includes security monitoring contracts independently valued at $1,000,000 (can be excluded from sale). As a “Systems Integrator”, The Company provides a “one-stop-shopping” business model for new home builders and remodelers. They install central vacuum systems, security systems (and monitoring), sound systems, structured wiring, shelving, shower doors, mirrors, and bath accessories, and provide builders and home remodelers with “one-stop-shopping” services for their home improvement needs. Residential and commercial security systems are a growth focus in 2008.
During the last fifteen years, The Company has grown from $500,000 to over $6 million in annual revenues. 2007 discretionary earnings were at about 10% of revenues. The Company’s contracted backlog as of September 2008 is at about $6 million and profitability for Q2 2008 was up versus Q2 2007 with a positive month to month trend.

Property information

Real Estate:

Lease

Lease terms:

The building is owned by seller, via a separate legal entity. Owner is open to a long term lease or even to selling the building. Final lease terms will be part of the overall deal negotiations.

Location:

The business is located close to major highways and an airport. Clients all over CT, Western MA and Westchester County NY are being served from current location.

Other information

Expansion potential:

As an “integrator” with a number of services for the new and remodeling housing market, this company provides central vacuum systems, security systems (and monitoring), sound systems, structured wiring, shelving, shower doors, mirrors, and bath accessories. Each of these areas is expected to enjoy significant growth along with new housing construction and remodeling. Examples of projected growth include:
• Geoff Kohl, Editor of SecurityInfoWatch.com stated that “that the alarm industry will be doing roughly $19.6 billion in business by the year 2011. That’s up from $17.6 billion in 2006.”
• “The Fredonia Group, an industrial market research firm, predicts that sales of home organization-related products will increase by more than 5 percent a year to $7.6 billion in 2009.”
• Industry research (CEDIA EXPO 2007) has shown “central vacuum units … are currently being installed in 10 - 15 percent of new homes being built. That number is expected to increase to 30 - 40 percent by 2010.”
• The NAHB “New Green Standard” is great news for home buyers and home builders, “the standard requires builders to include features in seven categories: energy, water and resource efficiency; lot and site development; indoor environmental quality and homeowner education.”
• Home buyers today are concerned about total connectivity of all their electrical components. According to the definition supplied by one company, “Structured wiring is a generic term used to describe many different types of residential wiring products that distribute a variety of data signals throughout a home. Signal types such as cable television, telephones, and Ethernet computer networks are common examples.”
• Surround sound systems and home theaters are quite popular and becoming more and more in demand with home owners. Also in high demand are homes with creative bathrooms with mirrors, shower doors, and other bath accessories playing more important roles in new and remodeled homes.

Competition / Market:

About 140,000 companies build or renovate residential homes in the US. Large builders include Centex, Pulte, Lennar, and DR Horton. Most builders are small, with about 10 employees, build from five to twenty homes per year, and have annual revenue under $3million. Only about 2,000 companies have annual revenues greater than $10 million. The industry remains fragmented: the top ten builders together hold only 10 to 15 percent of the market. The company is the largest company of its kind in Connecticut. No competitor in their market offers the same scope of products and services which means this company is the only choice for customers who would like to order all their home installation (Interior Home Products and Low Voltage Products) needs from one source. The wide scope of their products & services range is one of the company's biggest competitive advantages. Most “competitors” the company encounters are “mom & pop” type businesses with a limited product & services range. Larger companies such as this company have an advantage in getting contracts because of the increasing complexity of electrical projects and systems. Also, building managers prefer to deal with contractors who can provide service in multiple markets (this company covers all of CT, Western MA and parts of NY state).

Support & training:

Seller is open to negotiate a paid transition period of up to 1 year and would consider staying on long-term as a company ambassador to give the company continued access to his excellent industry relationships.

Reasons for selling:

Retirement

Financing available:

Seller Financing will be available for a portion of the acquisition price.

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