Due to our nature of business, we knew one of our supplier who are willing to let go his business for retirement in Singapore, and we’re seeing a potential of this market therefore would like to take over the business. However, due to the amount of investment is quite huge so we’re seeking for investment fund to support us.
Here’s the briefly break down of their financial outlook
Selling price: 1.8 Mil (not include the properties warehouse)
Revenue : 3.2 ~ 3.6Mil
Gross Profits : 1.2 Mil
Net Profits: 0.9 Mil
Their business are quite steady now, and we’re quite confident on the prospect if we’re able to focus on certain industries to growth further especially in the Malaysia market. Hence we’re quite optimistic and targeted to break even within 3 ~ 5 years and profitable from the 4th year onward.
An overview of the market and opportunity;
The targeted company is the biggest stockist in Singapore and they has been servicing the local market since 2002. They’re also supplying to the region market including Indonesia, Thailand, & Malaysia. We’ve started the similar business in Malaysia last year and discovered many opportunity and potential of the market over here.
Why our business model can generate superior, sustainable returns;
Coz the owner did not market much on their product however, the business are able to maintain & profits since then. So as long as we’re able to stable & maintain the exiting market share and focus on certain high margin industry then we’ll be able to achieve higher.
3 year financial projections
As mentioned, we’re quite optimistic and estimated to return of investment in the 3rd year based on 0.5 mil per year and seeing profit on the 4th year onward.
Background of key managers/founders and shareholding;
It will be managed by existing manger who currently looking after the SQC wire mesh S/B in Malaysia.
Current status of our business: including investment made to date; sales made to date etc;
xxx wire mesh S/B is making a good progress and seeing profit in the second years.
0.9 Mil to take over the business and growth the market further by focusing in certain high margin industries
Equity to allocate to the Investors
30% – 49%
The figure are based on the existing stock & asset value
Expected rate of return or IRR to investor;
ROI is 30%
Investment risks and mitigating factors;
The business has been running and very steady now. The only risk is the fluctuation of material price this can be mitigated by monitoring closely on the stock level and working with the manufacturer closely.
What is the exit opportunity for investor?
Investor should be able to exit in anytime after 3 years.