CHALLENGE: Analyze acquisition of fuel retail, wholesale, and lubricant business with annual sales of $25 million dollars.
METHODOLOGY: Reviewed all aspects of operations including competition, validation of seller financials, identifying required updates for equipment and operating retail units. Developed values for ongoing business and potential strategies for maximizing return on investment after acquisition is completed.
RESULT: Business was purchased for $6 million dollars. Unprofitable assets were sold off within the first six months, improvements in operations resulted in an additional $150,000 of positive cash flow in the first year, and increased substantially in subsequent years. The purchaser return on investment was 25% after the 2nd year. The purchaser implemented all recommendations from our analysis and experienced increased cash flow, debt reduction from non core and unprofitable assets, and the complete acquisition price was paid back in 7 years.
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