This 25 year old towing company had good sales and profitability and the seller owned the real estate which was 3.6 acres including a small office and large towing-storage yard. The owner engaged our firm as their Business Broker to represent them in the sale of the business.
Situation & Challenges
- While the company was profitable, it had more assets than required for the present level of business. Some equipment included heavy duty big rig tow trucks which are very expensive, yet were not adding much value to the transaction from a financial standpoint.
- Towing contracts may be difficult to transfer.
- This location was grandfathered with the city for use as a towing yard, however, no new towing yards will be approved by the city. Thus, if the real estate is not purchased the business would have to relocate out of the city. The seller did not want to lease the property.
- We found a buyer that owned an LA towing company in need of an Inland Empire location.
- The buyer had contracts and approval from the major insurance companies
- The buyer also had existing police contracts which made obtaining the transfer of the local police contract more certain.
- We obtained SBA financing for the business, equipment and the real estate.
- We were able to close the transaction at full value with SBA financing for the business, equipment and real estate.
- All of the contracts were preserved and transferred to the new owner.