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Gateway Business Sales (GBS) represents a Manufacturer that produces proprietary Acrylic Paints and Mediums and offers over 80 colors. The business was established in 1962 and under the current ownership since 1980. The business is unique since they sell directly to the end user by selling on-line ordering, telephone, or pick up at the location. One of the real niche aspects is direct selling large sizes at factory direct discount prices which are not available anywhere. There are approximately 30,000 customers in the data base with 5,334 unique customers making purchases in 2019. All artistic acrylic paint is produced in house which allows the Company to maintain firm control of product quality and exclusive blends. The customer base ranges from fine artists and crafters, production art, set props, and theaters as well as mural programs, community art, schools, and museums.
Business status during Covid-virus: The business has not impacted by the covid virus and sales only decreased by 6% from March-August. The e- commerce business has grown during this period and management predicts sales could continue to increase moving forward based on customers purchasing criteria.
Income & Adjusted EBITDA: The represented sales $3,147,786 and Adjusted EBITDA $670,855 were based on 2019. The Sellers Discretionary Earnings (SDE) was approximately $825,000 in 2019. Sales from January-August 2020 were $2,081,212 and Adjusted EBITDA were $378,058. Management expects sales and profits to be close to 2019 figures.
Investment: The Company’s position in the market along with successful business history as well as sales growth will lead to different value perspectives among various investors. Thus, an asking price has not been established. Parties interested in pursuing this transaction will be required to submit a non-binding proposal detailing the preliminary valuation of the company and suggested transaction structure.
Located in Los Angeles
The Company operates from a warehouse and factory totaling 4,000 sq. feet. The location features an adjacent 4,000 sq ft lot as part of the property. The Sellers own the property and are willing to offer a buyer a new lease at market rate or the business can be relocated.
The established business methodologies refined by the Company are expected to yield growth going forward. Expansion into regions where the Company does not currently have a strong presence is an opportunity for growth cited by management. The Company has achieved strong sales performance and profitability growth with very little sales and marketing efforts. Management cites the addition of social media campaigns and YouTube videos featuring customers as creative ways to appeal to more potential consumers.
The Sellers will ensure a smooth transition and be available post transaction for an agreed upon period with a new acquirer
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