South Texas Oil & Gas Parts Distributor

$3.2M

Revenue

$580K

SDE

8.4x

Multiple

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Full Editorial Writeup

Premier South Texas Refinery, Oil & Gas, Industrial Parts & Distribution Company Exceptional opportunity to acquire a well-established and highly respected Oil & Gas and Industrial Parts Distribution... Businesses Franchises Brokers Loading... Premier Refinery, Oil & Gas, Industrial Parts and Distribution Company Texas Asking Price:$4,900,000 Cash Flow (SDE):$580,000 EBITDA:Not Disclosed Gross Revenue:$3,200,000 Real Estate:Not Disclosed Established:1986 Premier Refinery, Oil & Gas, Industrial Parts and Distribution Company Business Description O&G Parts and Distribution Business Including Real Estate. Premier South Texas Refinery, Oil & Gas, Industrial Parts & Distribution Company Exceptional opportunity to acquire a well-established and highly respected Oil & Gas and Industrial Parts Distribution Company serving South Texas for more than 40 years. This turnkey operation has built a strong reputation for reliability, product availability, and customer service, resulting in a loyal and diversified customer base throughout the region. The company serves the oilfield, industrial, commercial, and maintenance sectors with a broad inventory of critical products and supplies. A competitive advantage is its complementary retail division specializing in commercial and industrial electronic parts, components, accessories, and related products, providing additional revenue streams and customer diversification. Highlights Established for over 40 years Strong reputation and long-standing customer relationships Experienced management team in place Dedicated workforce with long-term employee retention Diversified customer base across multiple industries Recurring business from repeat commercial and industrial clients Extensive inventory and equipment included Valuable real estate included in sale Turnkey operation with established systems and processes Significant opportunities for continued growth and geographic expansion Financial Overview Revenue: $3,200,000 Cash Flow: $580,000 Asking Price: $4,900,000 Included in Sale Operating Business Real Estate Equipment Inventory Established Customer Relationships Trade Name and Goodwill This is an outstanding acquisition opportunity for strategic buyers, industry consolidators, private investors, or entrepreneurs seeking a profitable and established business with experienced personnel, hard assets, and a proven track record of success. Qualified buyers only. Additional information available upon execution of a confidentiality agreement. Ad#:2513807 Detailed Information Support & Training: Seller will be available for transition. Business Location Real Estate: Owned Listing Statistics Saved This Listing Listing Last Updated Appeared in Search Listing Detail Views BizBuySell EDGE Know the True Market Value Before You Make an Offer Get valuation data to negotiate with confidence. Get a Valuation Report Business Listed By: Monika Page BizMatch Inc. View My Listings Phone Number 361-420-8075 Voice only (no SMS) Ad#:2513807 The information in this listing has been provided by the business seller or representative stated above. BizBuySell has no stake in the sale of this business, has not independently verified any of the information about the business, and assumes no responsibility for its accuracy or completeness. Read BizBuySell's Terms of Use before responding to any ad. Learn how to avoid scams. 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Why we like it

Earnings quality looks solid for the category, with $580K of cash flow on $3.2M revenue for roughly an 18 percent margin, supported by repeat business from commercial and industrial clients. Distribution of critical replacement parts tends to produce sticky, reorder-driven revenue rather than one-time project work. The 40-year track record suggests the margins have survived multiple oil cycles.
The moat is the boring kind that compounds: four decades of customer relationships, product availability, and a reputation for reliability in a region where operators reorder constantly. New entrants cannot manufacture 40 years of trust or replicate an inventory depth that lets a customer get the part they need same day. Switching costs in industrial supply are about reliability, and incumbents who deliver keep the account.
The real estate included in the deal provides genuine downside protection and a financing lever. Owned property means a buyer can potentially separate the operations from the real estate, lease it back, and pull out collateral or reduce the effective operating multiple. Hard assets plus inventory mean you are not buying pure goodwill at this price.
An experienced management team and long-tenured workforce are already in place, which lowers key-person risk and makes this a candidate for a semi-absentee or strategic-consolidator structure. A buyer who is not from the oilfield world can step in without the business collapsing on day one. That operator advantage is rare in owner-dependent SMBs of this size.

How to improve it

Separate the real estate value from the operating business value immediately and reprice the deal. If the building and land are worth $1.5M to $2M, you are actually paying around 5x for the operations, and you can finance the real estate separately to free up cash and lower your blended cost of capital.
Build a written customer concentration and reorder report in the first 90 days. Identify the top 20 accounts by revenue and margin, then put a simple account-management cadence in place to lock in those relationships before any goodwill erodes during transition.
Push the complementary electronic parts retail division harder, since it already diversifies away from pure oilfield exposure. Add an e-commerce or online ordering layer so existing customers can reorder common SKUs without a phone call, which lifts margin and stickiness at near-zero incremental cost.
Tighten inventory management with ABC analysis to free up working capital tied in slow-moving stock. A 40-year-old distributor almost always has dead inventory on the shelves, and converting that to cash improves return on capital without touching revenue.
Pursue the stated geographic expansion deliberately rather than opportunistically. Map adjacent South Texas markets where existing customers already operate and extend delivery routes there first, since you can grow on the back of relationships you already own.
Implement basic pricing discipline and review margins by product line and customer. Distributors frequently underprice loyal accounts out of habit, and a 2 to 3 point gross margin improvement on $3.2M of revenue drops meaningful dollars straight to cash flow.
Document and systematize the institutional knowledge held by long-tenured employees before any retire. Build SOPs for sourcing, vendor terms, and key customer quirks so the business is transferable and so you reduce dependence on a small group of veterans.

Diligence notes

Demand a clean allocation of the $4.9M asking price across real estate, inventory, equipment, and goodwill. The 8.45x cash flow multiple is meaningless until you know how much is hard assets, and you should get an independent appraisal on the property and a physical inventory count.
Scrutinize oilfield exposure and customer concentration carefully. Ask for revenue by customer and by end market over the last five years to see how cash flow behaved during the 2015-2016 and 2020 oil downturns, since this region lives and dies with rig activity.
Verify the cash flow with tax returns and bank statements, not just a seller-prepared P&L. Confirm what add-backs build to the $580K SDE and whether they are legitimate, because distribution businesses often carry owner perks and inventory adjustments that inflate reported earnings.
Assess the age and retention plan for the experienced management team and long-tenured workforce. If key sourcing and customer relationships sit with one or two people near retirement, you need employment agreements and a transition plan, or the moat walks out the door.
Confirm vendor and supplier terms, including whether any key distribution agreements or exclusivities transfer with the sale. Loss of a primary supplier or unfavorable repricing post-close could quietly erode the gross margin you are underwriting.
Review aged inventory and accounts receivable quality. A four-decade-old distributor may carry significant obsolete stock and stale receivables, both of which affect the real working capital you inherit and the true value of the inventory included in the price.

Source

Originally listed on BizBuySell. View original listing →