Established Bay Area Pharmaceutical Delivery Service

Home Based. High Profit Margin. Coveted Pharmacy Relationships

Specifications

 Price:
$350,000
Revenue:
$326,387 (2021)
Cash Flow:
$100,049 (2021)
Location:
Bay Area, CA
Service Area:
San Francisco Bay Area
Adjusted Net:
30.6%
 Employees:
4 FT Drivers
Reason for Sale:
The Sellers are Retiring
Goodwill:
26 years
Year Established:  1995
Services:  Delivery from pharmacies to home bound clients
Equipment:  Minimal office equipment
Operation: Monday through Friday deliveries
Clients: Anyone who needs medications delivered, growing population as boomers age up
Lease:  Home Based. Relocatable to an extent
Personnel:  4 to 5 full time drivers as needed

The presented acquisition opportunity is for a well-established, niche delivery business, providing services for contracted pharmacies whose clients are home-bound. The business obtained it’s favored relationships within the highly scrutinized, Bay Area pharmacy industry by developing first-class operations and practices that meet the level of professionalism, organization and care required.

Sales transactions & delivery requirements are received directly from contracted pharmacies.

During the pandemic, the business realized growth and is expected to continue this trend throughout the upcoming wave of the retiring US Baby Boomer population. Low contact healthcare options have also become more standard and in-demand in the aftermath of the pandemic.

A buyer for this business must be highly organized and possess some experience in logistics to navigate this highly regulated industry. Accountability and attention to detail are the key elements for the successful future of this geographically focused business. All drivers are 1099 contractors.

Value Proposition

  • One of the first Pharmaceutical Delivery Services
  • In contract with 3 key pharmacies
  • Easily integrated into existing delivery business
  • Relocatable
  • Key employee can run office
  • Buyer will have a high degree of detail and organization
  • Business model can be expanded into other territories
  • Buyer will run office and be able to deliver when needed
  • Very simple to run, attention to detail is key
  • Growth can be had by increasing pharmacy relations

Revenue Breakdown

Financial Highlights

  • Listing Price: $350,000 no invintory
  • 2020 Cashflow (SDE): $140,201
  • Average SDE is 40.37% of Gross
  • Gross sales increased during pandemic
  • Fees are paid directly by pharmacies
  • Average of 4 deliveries per hour
  • Average delivery rate $15.00
  • Average delivery working hours per day 6
  • Average driver makes $25/hour
  • Drivers are delivery area specific
  • Main delivery type averages 584 deliveries/month

Cashflow Analysis

Asking Price

The asking price is determined using a cash flow and historical sales. Cash flow is the sum of net income from the business plus any non-cash expenses, non-recurring items and any seller’s personal expenses. The historical sales show a multiple of 3x SDE. A multi-factor multiplier is applied to the cash flow based on the condition of the business and the uniqueness of the business.

For this business, a three-year average cash flow is applied making the business price more favorable to the buyer. The multiplier applied in this case is 3x.

The SDE value takes into account time to build up the goodwill and customer base. If you were to start another like business startup costs would be low, gaining credibility with pharmacies would be difficult.

Funding Example

Purchase Price: $350,000

20% Buyer Down Payment

$70,000

Buyer’s Equity

80% Bank Loan

$280,000

10-Yearterm at a rate of 6.75% = Monthly loan payment of $2680

  • Cash Flow (SDE in 2020): $117,803
  • Annual Payment to Bank: $32,158
  • Net Profit (After Expenses and loan payment): $85,645

* Please note that the decision of whether to extend a loan on any sale belongs to the bank, and this document does not guarantee specific terms or verify that financing is available.