Potential Cash Flow
This meat manufacturing company is the quintessential family business. The company owns its production plant and leases refrigeration and freezer space. An estimated 100k pounds of meat are processed weekly, 80k of pork and 20k of chicken and beef. Raw materials arrive fresh and are prepared, cooked and shipped frozen. The firm’s customer demand exceeds their production capacity.
The production plant, which is valued between $2.2 - $2.5 million, will not be sold without the business, though the business may be sold without the property with a $1.50+ psf/month lease rate that will remain a function of overall deal terms.
The sale price includes the 5,782 square foot plant that occupies a freeway adjacent location. This includes a $200k oven and $100k spiral freezer. A 5,300 square foot storage facility, comprised of refrigeration and freezer space, is on a new 5 year lease. The company’s furniture, fixtures, equipment and related goodwill will be included in the price, though inventory, working capital, accounts receivable (or payables) will be sold at cost at close.
Though competition exists, primarily from major industry brands, the company is the incumbent supplier to its retail end-users who rely on this firm’s key component for some of their most popular products. Further, the opportunity is in an industry segment that values authenticity, which this family operated business espouses due to its 45-year history, family orientation and “old country” ties, recipes and cooking methods.
Growth & Expansion
The company has operated at or near what their preferred capacity to be for some time. Their gross revenues have hovered in the $10 ml - $12 ml range as a result. They operate 1 shift 5-6 days per week so output could theoretically be increased, however offsite cold storage space would then be required. Finally, management prefers to have a family member present during production, which become less feasible with extended hours. Additional opportunity exists to grow the co-packing and private label business. Due to capacity constraints coupled with high area property values, new management will ideally operate a larger, lower cost production facility with greater capacity, abundant cooler and freezer space and a loading dock. Opportunity also exists to expand the firm’s private label and co-packing business, or to become a component supplier for additional manufacturers.
Support & Training
Reason for Selling
The production plant, which is valued between $2.2 - $2.5 million, is available will not be sold without the business