Description A distributor of specially imported food products, established in 2006, has decided to sell a portion of their business that's dedicated to the sales of their Factory Brands and instead focus solely on the Private Brand division of their business.
The Sellers Factory Brands provides healthy nutritious and affordable gourmet food products that they source from all over the world. They operate without benefit or expense of a warehouse or trucks, instead depending on public Warehouse and Trucking Co. The Sellers's Factory Brands distribution businesses' margins currently are approximately 30-32%. A new Buyer, currently in the food distribution business, will likely find many of the Sellers current operating expense redundant and therefore either eliminated or reduced. Rent, salesperson's salary/commission and other operating expenses would be eliminated.
Consequently, this is a great bolt-on opportunity for a larger distributor to fold this revenue stream into their existing operations (at less operating costs and higher margins) and thereby further enhance the already rich gross margins the Seller currently enjoys. In addition to benefiting from reduced overhead, a new Buyer will furthermore find attractive cross-selling opportunities for their products with the Sellers large diverse customer base of over 150 well-established accounts.
The Customer mix comprises: other distributors, natural & health food stores, local super market chains; independent ethnic Hispanic, Asian and Middle Eastern stores. Ethnic product includes: Hispanic, Asian, Armenian, and Middle Eastern. Gross sales for the Factory Brands segment they want to sell are approximately $1-million annually. The business is currently generating a net profit of roughly $150,000 (with their overhead) and is attractively priced at $319,500.