The company, located in Northwest United States, sells CNC plasma cutting tables and related equipment. The company has operated since 2010 and is currently up for sale to qualified buyers exclusively through Raincatcher. The company started as a niche market manufacturer for hobbyists and small business, but over time, its price point, industrial quality, and customer service have caused it to become a leader among introductory and light industrial table sellers.
Key Company Highlights
- Established business with an excellent reputation.
- Highly knowledgeable sales, operations, and management teams that operate independently of the owner.
- Strong gross margins (47% overall and 62% on in-house made products), with the opportunity to grow the margins through increased revenue.
SDE straight line growth of 61.33% per year for the last three years; CAGR of 41.61% for the same period.
- Company grown organically and ready to see sales explode with introduction of marketing.
- Ability to scale and significantly increase production due to new manufacturing facility.
- Continuous improvement, because the employees use the company’s products to build the their own products.
- Informed customer support specialists for the same reason.
- At least 24% growth every year since inception.
- Expected growth in 2019 and annually thereafter in excess of 20%, even without introduction of marketing.
Although most of its customers are still first-time buyers, the company sells industrial grade CNC plasma cutting tables made onsite at their Northwest location—tables made in America, by Americans, and using American parts. The owner feels that a first-time buyer should not be forced to choose between hobby grade tables that are suited for home use and far more expensive industrial tables—first time buyers deserve quality tables that are built to last, and customer service tailored to their needs. The company builds quality industrial grade tables for introductory level users, so the table will last as long as the user keeps it in service and will offer features typically found only on high end industrial tables. Its traditional two main target customers are hobbyists who want something better than a light grade tabletop cutter and small to mid-size businesses involved in fabrication or equipment manufacturing. Over time, the market has expanded, and the company sells to small and medium-size businesses, artists, schools, and companies of all types that see the need for a cutting table, even though welding and metal manufacturing may not be the typical primary trade of the customer.
The company knows its tables better than any manufacturer on the market, because its workers use their own cutting tables to build tables for their customers. They know their product because they use their product. Above all, the company provides customer service to support its tables, which is lacking in the market as a whole and is particularly important for introductory level customers. The proof is right in the customer and industry reviews.
The plasma cutting machine market is projected to be a $1.36 billion industry by 2021 with a CAGR accelerating to over 6%. The rise in automation is one of the key drivers of the industry’s continued growth. Plasma cutting machines are used at every level, from hobbyists who do woodwork in their garages to the most sophisticated welding and manufacturing facilities. The company does not target the highest end of the market, although it could be an obvious add on for a high-end manufacturer looking to get into the introductory and lighter industrial markets.
The company offers two main product lines among its cutting tables each with multiple sizes, all built to order. It also sells accessories to go with the tables, various upgrades and table modifications, consumables, and customer upselling through a variety of third-party related items. Even though the company uses better quality components and incorporates design features far surpassing those of its competitors, the company has an average gross margin of 61.88% among the products it builds.
The company does not carry any long-term debt and provides a great opportunity for someone interested in a business with strong cash flow in a growing market. The company has experienced year over year straight line SDE growth of 61.33% per year for the last three years (CAGR of 41.61%), and it never engaged in paid marketing until 2018. The first marketing campaign, launched online in 2018, used a small marketing budget of less than .3% of revenue to show proof of concept regarding low customer acquisition cost and effective targeted marketing. This marketing translated into effective, low cost customer acquisition through targeted marketing, and it is expected to have similar efficacy when applied to a broader market. Just prior to that marketing campaign, the company more than doubled the size of its manufacturing facility, so it is prepared for a buyer to turn on a much larger marketing apparatus to increase gross margin by rapidly expanding revenue and increasing material purchase quantities while keeping fixed costs steady.
The company’s owner seeks to sell 100% of the equity in the company for $30 million in cash consideration.
The deadline for submission of a letter of intent is: Friday, February 22, 2019
|Locations||Northwest U.S.||Inventory||Built to Order, but typically between $500,000 and $1,000,000|
|Years In Business||9 Years||FF&E||$136,371.99|
|Employees||28 full time employees||Terms||Negotiable|
|Hours||Mon. – Fri. 7:30AM – 4PM||Ownership||100%|
|Facilities||Leased – 22,000 square foot custom manufacturing space||Reason for Sale||To pursue new entrepreneurial endeavors|