Annual Revenue: $1,768,000
Net Cash Flow: $681,000
The company is an established provider of professional skill or competency development software systems and associated services. It delivers its solutions through a cloud-based Software-as-a-service (SaaS) model to several well-known corporate clients across a wide range of industries such as government, transportation, manufacturing, healthcare, education, financial services, etc. It also offers project management solutions.
The company has a stable, high-margin business that generates over 70% profit contribution margin, and has consistently delivered profitable earnings every year since it was founded around 18 years ago. It also has a robust new business pipeline worth over $650k for the next two quarters.
Employees: The company’s full-time employees include a product engineering and solutions manager, a customer success manager, and two software development staff. One of the two owners is also involved full-time with the company’s operations.
Competition: Most of the companies operating in the corporate learning and development space try to force-fit their performance management and learning management tracking modules to accommodate employee development needs. The company differentiates itself by offering a niche, specific solution for companies that are looking for a competency-based professional development system that is more agile and more responsive to changing customer requirements.
Transition Support: To ensure a smooth transition after the sale, the two owners are willing to work with the acquirer as required. One of the owners is willing to continue working with the acquirer for an extended duration, based on negotiated terms.
Reason for Selling: The owners want to retire.
Growth: The new owner can leverage the company’s software capabilities to capture a share of the high-growth ~$240bn global corporate learning and development market without any significant capital investment. An increased marketing and business development spend, along with its well-known existing clients, which can serve as references, can help the new owner acquire new clients and scale quickly. Any future growth investments made into the company will generate high ROI, given that its lifetime profit per client is ~11x the client acquisition & maintenance cost.
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