Looking for advice on evaluating a local overhead crane service company

September 29, 2021

by a searcher from Rice University - Jesse H. Jones Graduate School of Business in Katy, TX, USA

15 year old company provides overhead crane new installation, services, and periodical inspection. Has 2-3M revenue, 200k to 450k ebitda, 8-12 headcount, 30-40% re occurring business, rest are project based revenue. Seller expecting 5-6x ebitda. I couldn't find any data on multiples for overhead crane installation, Inspection & service companies. I did find the BVR data on crane manufacturer, which may not be a right comparison. Has anyone evaluated a company like this. I appreciate all the suggestions.

I did listened to the podcast on "Operating in the crane business" by Alex. This helps to understand the business.

A rollup happened in this industry for the past 5 years by Crane 1 which has 220 technicians and recently bought out by L Squared Capital Partners. Crane 1 offers OSHA-mandated inspections, maintenance, repair, design and installation of overhead crane systems and below-the-hook lifting devices.

Reply by a searcher
from University of Texas at Austin in Austin, TX, USA

First, from a valuation perspective - there are folks out there that will do this for you - and I've seen costs from $250-$###-###-#### just depends on the size, and the terms of the ask. If you are past NDA and considering an offer - and just looking for a checkpoint, you could try Peercomps - I think it's $49 for a search and $99 for a valuation. That would just be a data point.

Reply by a searcher
from INSEAD in New Jersey, USA

I have seen other equipment rental companies sell from 2-5x multiple. Something keep in mind during valuation is age of the cranes and cost of maintenance / replacement and how far are you from having to do it post transaction.

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