May 2020
Featured Clients this issue:
**Details of each client below article
– Highly Profitable Telecom Construction Company #0820 NEW
– Contract Research and Testing Services #1120
– Relocatable B2B Value-Added Distributor #1919
  Back to the Future

Now that we have been living with COVID-19 and its social and economic ramifications for approximately two months, it appears that we, as an economy, are starting to adjust and get back to business, albeit, somewhat differently.  For those of you who lost a loved one or friend, we extend our condolences and understand that the health danger is not over and there will be more casualties from the virus.  There will also be businesses that have been mandated to close that will not have the capital to reopen and businesses that reopen that will not have the capital to wait for the economy to recover enough to return to profitability.  Unfortunately, that means that there will be employees that will not have a job.  Certain industries are faring better than others, and there will be a shift in the way business will be conducted going forward.

The business acquisition industry is also impacted.  Fortunately, technology enables us to work remotely, in fact, I am writing this article from my home office.  We are conducting more conference calls and “Zoom” type meetings, but we are getting to the point where buyers are becoming more comfortable that the economy is not going to collapse. They are writing offers, usually with some COVID caveat provisions, and scheduling trips to inspect the business and meet with management.  The due diligence prior to submitting an offer is more intense and it is important for businesses that are on the market to have their financial house in order.  It is critical in this environment to document the impact of the “safer at home” economy on the business and have a plan for going forward.

We believe that there will be exceptionally good opportunities for well capitalized buyers to acquire good businesses to grow and prosper, as a result of marginal businesses failing and creating a larger pool of qualified employees.  If you have a good business,  it might be the right time to sell because there is less competition from other companies on the market.  If you are a buyer, you may also have less competition because of the less confident, risk adverse buyers watching from the sidelines.  Having a strong advisory team will help you in this time of transition, and the team at The FBB Group, Ltd. would like the opportunity to earn your business.

Below is a link you might find helpful in regards to the CARES Act and how it may impact the purchase of a business.

The majority of our business is derived from referrals. Please consider referring our services if you encounter a situation involving the potential purchase or sale of a business.

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Ronald V. Chernak

Inspiring business relationships since 1982!

Highly Profitable Telecom Construction Company #0820
This well-established construction company is continuing its exceptionally strong growth. Sales are up over 32% in the first quarter of 2020 and have not slowed down in the current economic conditions. No additional capital investment is anticipated for 2020 and 2021 unless the company exceeds planned growth or diversifies into other services. It purchased over $220,000 of new equipment at the end of 2019, which should support at least a 50% growth in sales. The staff is well-trained, and the overhead is very low due to factors identified in the Confidential Information Memorandum (CIM). Multiple opportunities, including existing contract structures, have been identified for significant expansion. This company serves a segment of the economy that is anticipated to expand.
  • Purchase Price…$2,250,000
  • Down Payment…$465,000
  • Gross Sales…$1,645,207
  • ADJUSTED EBITDA…$908,731
For more information contact Gary Curran,
Contract Research and Testing Services #1120
HemoGenix, Inc. was founded in 2000 and continues to be a key player in stem cell assay market. The company has developed superior proprietary procedures for toxicology testing which have been used by top biopharmaceutical companies for new drug candidates. Many of the tests sold worldwide have been further developed for in-house testing for stem cell and veterinary research, cellular therapy, and regenerative medicine. In 2017, Preferred Cell Systems, Inc. (PCS) was formed and the new website was launched to help further educate, productize, and market these advanced testing kits and assays. HemoGenix currently has a research contract related to COVID-19 for toxicity testing which is required by the FDA for any new drug. Subject to additional approvals the contract could be significantly larger. With the renewed global emphasis on reliable testing platforms, HemoGenix and Preferred Cell Systems are ready for new ownership to leverage long established industry relationships for contract services and further scale the distribution of its many developed kits and assays. The current owner has built an experienced, well-trained team in place to fulfill all orders and only works to help procure new business. He is looking to retire but would like to consult for a negotiated timeframe to help in the successful transition of the intellectual property and all in‐house lab procedures.
  • Purchase Price…TBS
  • Gross Sales…$549,684
  • Adjusted EBITDA…$115,296
For more information contact Rob Amerine,
Relocatable B2B Value-Added Distributor #1919
This RELOCATABLE value-added distributor is in the business of providing custom park and playground equipment from around the world, with a focus on fun, creativity, and safety, to landscape architects, general contractors/developers, parks departments, amusement parks, schools, child care centers, and HOAs. Currently, there is $4,800,000+ of signed contracts in the pipeline for this year. The company does not work with individual homeowners, but that market could be an opportunity for expansion. Throughout the years, the company has consolidated its suppliers and focused on uniqueness, resulting in the company becoming a more exclusive business model. This business could be expanded into surrounding states as another opportunity for expansion.
  • Purchase Price…$1,795,000
  • Down Payment…$360,000
  • Gross Sales…$2,420,528
  • SDE…$442,815
For more information contact Mem Garrison,
**Terms & Definitions
TBS (To be suggested by Purchaser) – Seller, in his/her sole discretion, has the right to accept or reject all offers.
Seller’s Discretionary Earnings (SDE): A term used to denote a business’s cash flow or the amount of pretax money a buyer can expect to earn in first-year operations.
EBITDA (Earnings Before Interest, Taxes, Depreciation & Amortization): All interest, tax, depreciation and amortization entries in the Income Statement are reversed out from the bottom line Net Income (It purports to measure cash earnings without accrual accounting, canceling tax-jurisdiction effects, and canceling the effects of different capital structures.)
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