Business for Sale

Plant Rental & Hire Services for Construction

  • Listing #GBB190
    LocationMpumalanga
    Selling PriceR 16,000,000
    Annual SalesR 12,906,000
    SDER 3,647,000
    ROI22.80%
    IndustryServices: Construction Plant Hire

Business Description

Very profitable proven and established business operating independently and to benefit further with a BBBEE owner.

An exceptional opportunity to either enter this lucrative market, or to expand existing operations.

This business hires out heavy Plant like Graders, Rollers, Excavators, etc. to the construction and building contractors and private individuals. The mix of product services offering is mainly the construction and maintenance of roads, bridges, bulk earthworks, foundations, other civil construction for municipal, provincial, state and private. This allows the business to target and attract customers from a wide range including farmers, developers and for tenders rewarded by the Government and Municipalities.

The business is centrally located in Mpumalanga allowing the business to source customers from a wide geographical area. The business has around 50 full time employees with good training and skills in place including important safety skills. The business supports and provide training of historically disadvantage individuals from local communities for upliftment and skills.

The equipment rental business has a very large asset base which can service the needs of most customers without purchasing new equipment. The staff is competent and fully trained in all aspects of the business.

The business has been operating for many years and is well established. The current owner started the business and it has grown into a large independent operation.

Sellers Discretionary Earnings, also known as EBPITD (Earnings Before Proprietors Compensation, Interest, Tax and Depreciation) based on historical trading amounts to R303,922 pm. Offers an excellent ROI of 22.8% and payback period of 54 months notwithstanding the high asset base. The EBPITD figure stated is excluding an allowance for Landlord rent.

Included in the price of R16,0m plus VAT (if applicable) is assets to the value of +- R14,6m. Plant consist of Graders, Rollers, Excavators, TLB’s, Trucks, Bobcats, Various Bakkies, Caravans, Trailers, Tools/Workshop Equipment and Office Equipment which are in good condition. All assets are owned with no lease agreements. An asset list is available to serious buyers.

Repairs and/or replacements are being done onsite in a well equipped Workshop on a regular basis to ensure and maintain customer satisfaction.

Also available is the Commercial Property in a separate entity that is well located for R4,0m plus transfer fees over and above the business price of R16,0m. The size of the land is 2,424 sqm. and the buildings occupy 432 sqm. The building consists mainly of a very large and extremely neat Workshop, plus Reception area, Office area and Storage. There is a separate adjacent building with rooms for accommodation for the staff if needed. Also covered Parking and a Wash Bay , owner Diesel tanks, etc.

Renting is not a preference for the Seller in view of the reason for him wanting to sell the business.

The reason for the owner wanting to sale is that he wants to emigrate together with his family to his country of origin after many years starting and growing the business in a successful and reputable and profitable entity. The owner is involved on a day-to-day basis, overseeing operations , etc.

Sales and growth up to F2018 and F2019 remained strong but sales decreased due to the difficult economic conditions that prevailed in the building and construction industry. The business is poised for multi-outlet growth. This will ensure continued growth into the future. A BBBEE owner will also be able to bring in other business opportunities to the business in the form of semi- and national government business.

The business is well established with good recognizable branding and repeat business having carved a niche with excellent service, well trained staff and a broad loyal customer base.

The business is also duly CIBD (Construction Industry Development Board) compliant up to Level 7 or R100m worth of a project.

The business is being sold as turnkey and the owner will ensure and provide adequate training. There is a full staff complement that handles the day to day operations.

If you are passionate about South Africa and share the vision of Construction Industry bodies, companies and analysts welcomed President Cyril Ramaphosa’s State of the Nation (Sona) statement that the Infrastructure Fund has a project pipeline with potential investments of over R700 billion over the next 10 years that will result in
“The cranes and yellow equipment that we have longed to see across the landscape of our country will once again soon be an everyday sight” – than this might be the business opportunity for you.