Ag Equipment Sales, 55-Year Specialized Ag & Construction Equipment Dealer, Iowa

$4.6M

Revenue

$580K

SDE

3.8x

Multiple

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Full Editorial Writeup

Ag Equipment Sales is a specialized dealer of agriculture and heavy construction equipment based in Humboldt County, Iowa, operating since 1971. The business focuses on a niche set of implements: land rollers, high speed disks, and ejection scrapers, which it sells and leases to farmers and contractors nationwide. The model is hybrid: equipment can be bought outright or leased for a season, and some units are leased for 2-3 years before being sold, which creates a recurring resale channel out of a depreciating rental fleet.

The operation runs lean with four employees out of a roughly 7,820 square foot commercial building used for assembly and maintenance, plus multiple display and storage lots leased from landowners at no equipment-handling responsibility to the business. Approximately $5mm of inventory sits on hand for rent and sale, though only $500k of inventory is stated as included in the $2.2mm asking price alongside $86k of FF&E and $175k of real estate. The business reports very little competition in its specialized product lines.

At $4.57mm in revenue and $580k in cash flow, the business trades at roughly 3.79x SDE. The retiring owner is selling after 55 years, and the asking price bundles the owned building and a hard-asset equipment package, which is why the headline multiple should be read carefully against what is actually a fleet-and-real-estate deal rather than a pure operating-business comp.

Why we like it

Earnings quality is anchored to tangible assets: roughly $5mm of equipment inventory supports $580k of cash flow, and the lease-then-sell model monetizes the same unit twice through seasonal rental income and an eventual resale. That dual revenue path on a single asset is a smart way to extract yield from depreciating iron.
The products are genuinely durable demand items. Land rollers, high speed disks, and ejection scrapers are working implements farmers and contractors need to keep fields productive, so spend holds up far better than discretionary equipment in a downturn.
The seller claims very little competition in these specialized lines, which, if verified, implies pricing power and insulation from the margin compression that plagues broad full-line ag dealers. A narrow, deep niche with a 55-year reputation is hard for a new entrant to replicate quickly.
The business is relocatable and distributes nationwide with no geographic boundaries, so a buyer is not locked into Humboldt County. That mobility plus a four-person team means the fixed-overhead footprint is small relative to revenue.

How to improve it

Hire or sharpen a dedicated outside sales rep to meet farmers and contractors directly, which the listing names as the primary growth lever. A disciplined CRM and territory plan could convert the nationwide distribution claim into measurable pipeline rather than inbound-only sales.
Build a simple digital marketing engine: product-specific landing pages, paid search for land rollers and ejection scrapers, and video demos. For niche equipment with little competition, owning the top search result for each category is cheap and compounds.
Formalize the rental-to-sale lifecycle into a documented program with standardized lease terms, residual-value schedules, and buyout pricing. Turning an ad hoc practice into a repeatable product makes cash flow more predictable and easier to finance.
Add or expand parts, service, and maintenance revenue off the installed base. Service work carries higher margins and creates the repeat touchpoints this business currently lacks, moving it closer to recurring income.
Audit the $5mm inventory for aged or slow-moving units and convert dead stock to cash. Freeing up working capital tied up in equipment that is not rented or sold improves return on assets immediately.
Negotiate manufacturer or supplier terms to improve floor-plan financing and inventory cost, since equipment carry is the single largest capital driver in this model. Even small improvements in acquisition cost flow straight to the resale spread.

Diligence notes

Reconcile the inventory figures carefully: the description cites roughly $5mm on hand, but only $500k of inventory is listed as included in the $2.2mm price. Confirm exactly what hard assets transfer, what is consigned or floor-planned, and what debt sits against the fleet.
Scrutinize cash flow composition because much of the $580k may come from one-time equipment resales rather than steady rental income. Separate recurring lease revenue from lumpy sale gains to understand the true normalized earnings base.
Verify the lease arrangements on the display and storage lots, since those sites are leased from individual landowners. Check term lengths, renewal rights, and whether the business can keep storing equipment there post-sale without disruption.
Test the very little competition claim with independent channel checks among farmers, contractors, and competing dealers. Pricing power is central to the thesis, so confirm it is real and not simply a thin local market.
Assess key-man risk given 55 years of owner relationships and only four employees. Four weeks of free training is thin for a relationship-driven business, so map which customers and supplier accounts depend personally on the retiring owner.

Source

Originally listed on BizBuySell. View original listing →