Steel Tubing and Piping Products Distributor For Sale
Location: Greater Toronto Area
Industry: Wholesale & Distribution
This is an opportunity to acquire a distributor of high-quality steel tubing and piping products to a wide range of manufacturing industries across Canada and the United States. The company provides its customers with access to a variety of steel products, including structural tubing to complement welded mechanical tubing and a full line of pre-galvanized pipes. It also coordinates complementary services with suppliers, such as steel cutting and swaging. Due to its asset-light business model, strong supplier relations, loyal niche market and consistent sales growth, the company has achieved revenue growth of over 200% in the past four years. The company is looking for a purchaser to take over its solid foundation within the market and lead its future development.
The company adopts an asset-light, inventory-free distribution business model, acting solely as a middleman between steel suppliers and small-end users. Upon receiving orders and payments from customers who have no direct access to steel manufacturers, the company places their orders to suppliers and acts as an intermediary between the two. The absence of a physical warehouse allows the business to operate with low fixed costs, while the upfront customer deposits ensure the business is always cash flow positive.
Internally, from a managerial perspective, the business owner is supported by another commissioned salesperson and an administrative assistant. With this lean organizational structure, the company is easily scalable by hiring additional salespeople. Maintaining long-standing relationships with suppliers and steel mills across North America, the company offers direct shipping to clients and lower procurement costs.
Externally, the company is positioned in a market that has already shown early signs of growth. As the macroeconomic environment recovers from the pandemic and generates more employment opportunities, demand for steel tubing - especially for residential applications - has increased significantly. As a steel distributor, the company is expected to benefit from the robustness of the steel industry in the foreseeable future. Willing to remain for an extended transition post-acquisition, the company owner, describes this acquisition as the perfect opportunity for someone who is familiar with the steel industry and looking to broaden their career in this field.
Cash Flow: $344,000
Reason For Sale: Retirement