MakerCo Shipping Pallets

 

Summary

MakerCorp Image result for graphic: shipping palletis a long established Calgary manufacturer of shipping pallets. Three years of financials and an equipment list are available to qualified buyers.

Operations

They are successful to the point that a buyer will have to consider relocation. Since they deal with industrial customers, relocation would not have the same impact as firms relying on ‘drive by’ trade or other customers drawn by location.

They also have a limited number of suppliers. These all deliver by large truck. Their inventory hovers in the neighbourhood of $100,000 or about a two week to four week supply depending on the item. Their suppliers deliver anywhere from next day to a full week depending on items.

Staff includes the owners (operations management and administration), over half a dozen full timers and up to half a dozen part timers on Saturdays and school holidays. Of these, the sellers estimate that three could be considered ‘key staff’.

The only licence required is to operate the forklift. (The new owner should have a class 1 truck licence.) The firm is very busy and the sellers do not think business could expand without hiring additional staff or another shift.

There is a safety program in place and they have a excellent WCB history.

There is little seasonal influence on revenues, so operations are fairly balanced through out the year.

They do their own in-house equipment maintenance and everything is in good working order. The sellers believe the firm could grow with the need for new equipment.

Customer Base

The firm is operating at pretty much capacity serving long established customers. They do little or no advertising. Any new customers are referrals from existing customers.

There is a concentration in that their top five customers account for well over half their business.

Their ideal customer is an industrial manufacturer producing items or product which requires pallets to ship their product to their customers.

Further Information

Three years of financial statements and a complete equipment list is available for qualified buyers.

Management Discussion

Q Why you are selling?

Time to retire/health preservation.

Q In your words, what does the firm do?

We provide pallet related services and remanufactured lumber products for a select group of Calgary businesses second to no one else in the city or surrounding area

Q What functions does the owner perform? What talents will the new owner have to replace when you leave?

Drive truck ( class 1 ) and deliver, cut lumber, plant and equipment maintenance, operate forklift ( load /unload trucks )

Q How long will you stay after the sale to help in the transition?

Negotiable

Q Can you estimate what it would cost for a competitor to start up?

  • Dust system 100,000
  • Electrical 50,000
  • bandsaw  50,000
  • ripsaw 80,000
  • forklifts 80 – 90,000
  • tooling/ compressor 70,000
  • trucks/trailers 100,000
  • chopsaws 12,000
  • tablesaw 5-7000
  • band dismantler 14,000
  • cut off saw 6,000
  • scrap wood tippers (4 ) 8,000
  • etc.

Q Have the accounts receivable been purged of bad debts? (This will is really a lawyer question).

Yes, we really have had no significant issues

Q Will you agree to a non-competition clause?

Yes/ negotiable

Q Who should buy this business?

Someone hands on, involved and enthusiastic with a mechanical aptitude.

Q Is there anything else you think a potential buyer might want to know?

We are a certified supplier of phytosanitary materials.  IE heat treat pallets for European / overseas shipping.

Q Will the new owner have to move premises?

Yes, because we have a confirmed sale of the building which closes Nov 30, 2018.

And . . .

BIG FLAG!

We are out of room on this site.

Additional growth now is contingent on more building footage and yard space.

Most if not all of our growth over the last five years has been organic, in that our existing customer base has grown their activities and we have been able to keep up with that increased demand.  New work is also the result of customer personnel moving to new placements and subsequently bringing us with them.

I love the business as does my wife ( despite the bookwork and the required govt hoops ) winters are now getting more difficult and we have not had a real vacation since we started the company.  The growth in our workload has narrowed my activities in the shop with very little space for some of the tinkering and improvements I have planned or intended.

Following a discussion with our original accountant, we have on offer a customer list, good will and all the required bits and pieces to continue serving the customers on that list.  Any potential purchaser will have these accounts to lose.

In the twenty plus years we have been doing this in Calgary, we have seen 6 -7 different pallet players start up and meet their demise.  Currently there is an operation in Lethbridge who is shut down and headed for receivership.

With regards moving to another facility, our realtor has some potential locations in mind.  From our own experience, we have moved this operation from our original site through this the fourth spot. I would have no problem helping or coordinating a move and setup.

The pallet market in Calgary right now has limited providers.  This is an excellent opportunity for someone with foresight and vision since more opportunities are available than are being met, not only by us but also the competition.

Interested? Next steps:

1. Fax / scan the non-disclosure document 
2. Phone discussion
3. Release of financial information
4. Meeting with seller and tour of premises
5. Discussions that may lead to a deal

NOTICE

The information on contained in this document has been provided from sources believed to be reliable. You must seek independent verification of these facts through due diligence before taking any action based on this information

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David Page | An Alberta Business Broker

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