Today’s Boring Biz (# 173): Manufacturer of Semiconductors | $2.5M Revenue | 1.4M Cashflow Seller Listed Structure - $4.5M Ask Price - $2.5M Revenue - $1.4M Cashflow - 3.2x Multiple What Does The Company Do? 1. High margin manufacturer for OEM and electrical components 2. Fabricate their own semiconductor based products 3. Based in Connecticut (CT) Notable Highlights 1. Make hard to duplicate items, less competition 2. Sole provider of parts for some of their customers 3. Established team in place with detailed operations Notable Risks/Concerns 1. Seller owns the Real Estate, Lease or Sale? 2. Higher level of technical knowledge required by new owner or team member post transition given its manufacturing 3. Not a lot of detail around the transition plan Why: How to buy a small business? How to buy a small business with SBA Loan? Note: Not our listing, highlighting this business for informational purposes only. For those who are looking to buy a first small business or better understand high-level math/ framework of how to analyze a small business for sale. Disclaimer: Hypothetical and illustrative only. Please do your own research (DYOR) or work with tax and legal professionals before making a decision. This video are intended for informational purposes only and does not constitute legal or tax advice, nor should be construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any security by SMB PE LLC or any third party.

Today's boring business is a U.S. manufacturer of semiconductor parts, cash flowing $1.4 million a year. The seller's asking here $4.5 million. The business has $2.5 million in revenue a year, and that's $1.4 million in cash flow. On a multiple basis, they're asking 3.2 times annual cash flow. Our back of the envelope math here is the 10% minimum down payment would be $450,000. That service coverage ratio would be 2.3 on a surface level and $660,000 could be net to the new owner pending any changes to due diligence. The cash flow margin is 56%. On a monthly basis, they're getting a little over $200,000 in revenue a month and netting $117,000. What does the company do? This company fabricates their own semiconductor products, starting from silicon wafers. They're a high margin manufacturer of important OEM and MRO electrical components. The seller's asking 4.5 million as mentioned before. It's listed right in line with electrical and electric equipment manufacturers. Some notable highlights, they note that business is very hard to duplicate for competitors. So in some cases, they're the sole provider for some customers. Also mentioned in the listing, they have a highly trained team in place that's been there for a long time. For some notable concerns, the seller owns the real estate, so you have to figure out a new leasing place going forward or figure out if they wanna sell the entire building as part of the transaction. This one you're gonna require some technical or industry knowledge or have someone on the team that's very knowledgeable. If you go the SBA route, a potential deal could look something like this. There's a very healthy DSCR here, given the lower multiple. Cash available to the new owner annually will be $660,000 pending any changes to due diligence or negotiations. Reminders, informational purposes only. Please do your own research. You can lose more than 100% of what you put in.