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Water Treatment and Chemical Dosing Solutions Provider

Price: $2,497,296

Annual Revenue: $3,288,813

Net Cash Flow: $525,746

Industry: Manufacturing

Location: Australia

The Company is based in Australia, and it specializes in the design, fabrication, and installation of chemical dosing and water treatment systems. Founded in 1997, the company was born a project contractor: planning resources, mapping, and installing water treatment systems for municipal and commercial clients. In 2012 however, management began pivoting the company away from the project contractor / re-seller model and leaned into the development and sale of its own proprietary products as a means to scale revenue and significantly increase profit margins.

To do so, management re-invested capital, funneling it directly into the R&D of its early chemical electrolysis and chemical generators. After several years of steady product evolution and market penetration, the company has built up a strong sales platform and international client list with many fortune 500 clients who demonstrate an ongoing interest in the quality and customizability of the company’s products.

In 2011, as the company continued to drive US sales, management formed a US pass-through entity. It serves only as a portal to do business with US customers and purchase US vendors’ components if necessary. The entity has no staff, no premises, and reports no profit (or losses).

Location

Facilities Information:

The company has a 5,200 sq foot rented premises in Australia that includes an office and a workshop for the manufacturing of its proprietary generator systems. The company moved to this new, larger space in February of 2021 to accommodate its continual growth.

Summary

Competition:

In the electrochemical generation of chlorine dioxide, the company has one major competitor. This competitor has been in the market for more than 15 years but does it not a direct competitor since it does not sell generators as a “service”. The company’s remaining (3 or 4) competitors are significantly smaller manufacturers, and they are more focused on the production of sodium hypochlorite, not generation, dosing, and control of chlorine gas.

Potential Growth:

Management has focused its product expansion in the chlorine dioxide and generators sales channel and is currently expanding its new chemical and electrochemical generation solutions. Demand from its current distributors in the US, New Zealand, and South Korea, has given management confidence to expect sustained growth upward. Prospective acquirers who can launch deeper into these regions and further internationally will reap the greatest benefits of the company’s rich and expanding product line. To further grow profitability, acquirers can move some or all of the company’s production to the United States. Doing so will not only cut down on foreign exchange and freight costs, but it will primarily reduce the cost of production by 3 to 5 times since Australian human capital is significantly more expensive in the production line.

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