Profitable Fire Protection Company For Sale

Business description

Well-established non-union fire protection company, located in Atlantic Canada, with a great reputation, is considering a complete share sale of their business. The company provides fire alarm/detection, fire suppression (albeit a much smaller component), security, and communication solutions to businesses. In addition, they provide preventative maintenance contracts which comply fully with mandated fire system service requirements in the province.

The Company
Established for more than 20 years, the company has grown in size, volume and reputation to the point where they are now regarded as the preferred provider to many of their customers. Revenue for the fiscal year ending November 30, 2007 was $2.6M. Continued growth is expected and revenue for the first 7 months of fiscal 2008 is $2.1M, up approximately 40% over the same period for fiscal 2007.

Strong gross margins have resulted from a solid track record of superior customer service with repeat large customers. Current satisfied customers include customers in both the private and public sector. Adjusted EBITDA averaged $580K over the past 2 years. Net Book Value for fiscal 2007 was approximately $1 million. The Company is in a strong financial position, with absolutely no debt

Property information

Real Estate:

Lease

Lease terms:

Owner owns the premises where the business is located and leases it on a month-to-month basis. It was built in 2006 specifically for the business. It is approximately 3600 square feet.

Other information

Expansion potential:

Growth Opportunities
The biggest growth opportunity is to expand their security product line to include CCTV, access systems, etc. They have some large customers, with whom they have built very strong relationships. Most have been with them over 20 years and the Company at this time, only captures the fire portion of their security spending budgets. By offering an expanded security product line, they would be able to capture a significantly larger portion of their customer’s total security spending.

Competition / Market:

The Market According to Lehman Brothers, the global fire protection industry is worth approximately US$30 billion, with approximately $15-$20 billion in North America. Traditional fire detection is part of the fire protection industry and is estimated to be over US$6 billion for North America. The major competitors in this sector are Tyco, Honeywell, Siemens, GE and Johnson Controls, all major corporations. In the Company’s local market, they are #2. There is a slow trend toward integrated building management, including fire detection and alarm functions alongside systems for access control and staff attendance. Growth in the industry fluctuates with non-residential construction. There is an increasing level of regulation and mandated safety standard compliance, which helps drive growth.

Reasons for selling:

Reason for Divestiture The owner is planning his exit strategy from the business and is available for up to 3 years, after which he intends to retire. Other employees plan to stay on with the new owner.

Inventory / Stock value:

$60,000 (included in the asking price)