Opportunity to secure a well-established distribution business with low scale manufacturing and assembly capability, of labelling and coding identification technology products to the food, beverage and pharmaceutical manufacturing industries.
About the business
The business is an Australian owned company with a focus on design and manufacture/assembly of label application machinery as well as distribution of specialist coding equipment produced by a leading US manufacturer.
The business is segmented into two clearly defined business lines – Coding and Labelling. Labelling operations are established in Australia, USA and Asia whilst the Coding business line operates solely in Australia and New Zealand. Each business line is further segmented as follows:
- sales of machines; and
- after sales servicing/maintenance and parts (consumables) of machines previously installed.
The business services a broad and geographically diverse customer base across a range of sub-sectors in the manufacturing industry including food and beverage, pharmaceuticals and plastic packaging. Customers are made up of major, well known multinational food, beverage and pharmaceutical companies of all shapes and sizes.
The business benefits from a high level of repeat business and diversity of revenue streams which indicates a relatively low concentration risk.
The business has also secured exclusive distribution rights for a leading US coding equipment manufacturer which secures a large base of customers in Australia and NZ. There are also well established supply relationships in place for parts and components associated with the manufacture/assembly of Labelling machines, as well as access to a large pool of competing suppliers thus providing the business added flexibility.
The business’ engineering expertise and applications knowledge developed over 25 years has been captured in detailed documentation of thousands of applications. Rights to all intellectual property relating to the business’ Labelling business line will be transferred to the Purchaser including all drawings, designs and patents held.
The business’ brand is a well-established and reputable name synonymous with quality and customisable labelling and coding equipment and efficient, superior service and therefore is well placed for growth both domestically and internationally. The business has a solid track record, with established systems and processes in place.
JPAbusiness Pty Ltd operating under Principal Business Agents License No. 1710192
History and Potential
The business was founded in 1983 and opened its first office in Sydney in 1987. Since then the company has expanded to cover a broad geographic region with sales and service offices in Sydney, Melbourne, Brisbane, Adelaide and Perth as well as New Zealand, USA, Malaysia and Indonesia. The company also has a joint venture arrangement with an entity in Brazil which distributes the business’ Labelling equipment.
The business has extensive sales and servicing networks both within Australia and New Zealand as well as an expanding presence across the North America and Asia. In addition there is a number of distribution agreements in place across UK, UAE, Egypt, Korea, South Africa, Thailand, Philippines, China and Vietnam which have potential to be further exploited.
The healthy after-sales revenue stream offers a sustainable pipeline which increases year on year as a result of an expanding install base. The business also has recently won a large tender with a major food and beverage manufacturer set to provide ~$2.7M in revenue over the next 3 years.
With strong diversity, high levels of repeat business and solid reputation for quality products and service, this business offers purchasers substantial opportunity for growth.
Location and Premises
Head Office and factory located in Melbourne, VIC
Sales and service offices located in Sydney, Melbourne, Adelaide, Brisbane and Perth
Low scale assembly facilities and sales offices located in Auckland (NZ), Jakarta (Indonesia), Kuala Lumpur (Malaysia) and Indiana (USA).
The business has manufacturing/assembly facilities in Melbourne (Victoria) and Indiana (USA). Sales and service offices are located in Sydney, Melbourne, Brisbane, Adelaide and Perth as well as New Zealand, USA, Malaysia and Indonesia. All premises are rented via operating leases with varying terms and conditions.
The premises in Melbourne functions as the head office and the primary manufacturing/assembly plant. The premises is a large building of 4,514m² situated on 0.77ha of land, comprising of fully fitted offices and factory floor space. All other Australian offices are sales and service offices located in zoned industrial or commercial areas close to manufacturing hubs in order to maintain close proximity to the majority of the business’ customers.
The North American operations have been established in Indiana since 1993 to position the business in the heart of one of the US’ major manufacturing and trade regions. This location has allowed the business to develop and maintain close relationships with their customer base and position the business for further growth.
International offices have also been established in Auckland (New Zealand), Kuala Lumpur (Malaysia) and Jakarta (Indonesia). Each location has been selected to respond to an increasing or already well-established concentration of manufacturing businesses in the vicinity and therefore provide a highly responsive customer service experience.
All premises are well maintained and present a professional image for the business. There is an opportunity for prospective purchasers to take over the lease of all or one of the premises, or relocate, offering flexibility and potential savings on overheads.
Skills and Employees
This business would suit other direct industry participants and/or businesses from adjacent sectors interested in diversifying operations across different sectors or into new geographical regions looking to benefit from the business’ established global presence in both the labelling and coding industries.
Similarly a new entrant into the market (with prior exposure to the industry) would benefit from securing the distribution rights for the business’ key coding brands and products. The business benefits from strong existing relationships with suppliers and customers, which will be carefully transitioned to the new owners.
The business currently employs ~90 staff worldwide across 9 offices, approximately 40% of which are sales and servicing staff who are dedicated to delivering quality customer service. Staff retention is high with 80% of current employees in Australia being employed for 5 years or more. There are 4 Directors all approaching semi-retirement who are available to continue working for a period to transition the business following a sale transfer, subject to agreed terms.
Expressions of Interest
Reason for Sale:
The business' shareholders have owned and operated the business for 10 years and have reached a point in their careers where a transition to semi-retirement is an attractive option in the near future. This provides interested parties an opportunity to purchase a fully integrated labelling machinery and coding distribution business.
All interested parties will be required to execute a Confidentiality Agreement prior to receiving the detailed Information Memorandum.
The Vendors are seeking initial Expressions of Interest, for the going concern business including all associated business assets, the 31st October 2016.
Enquire About this Business Now
Quick FactsPrint Brochure
- Annualised FY15 revenue is projected to be approximately $25M
- Gross profit margins ranging from 42% - 45% over last 3 years
- Global presence with operations throughout Australia and New Zealand as well as USA and Asia
- Extensive and well established sales and service network with high levels of repeat business
- Highly reputable and well known brand, which has been promoted and supported for over 30 years
Important Information for Prospective Purchasers:
All information in this document is of a general nature only and not exhaustive. Interested parties should conduct their own due diligence and feasibility assessments. The Vendor of the business described here, and advisors JPAbusiness Pty Ltd, are not liable for any loss or damages associated with reliance on this information or the Expressions of Interest process.
JPAbusiness Pty Ltd operating under Business Agents Licence No. 1710192 (NSW); Real Estate Agent Licence No. 3485836 (QLD); Estate Agent’s Licence No. 073491L (Vic). James Price AAPI Certified Practising Valuer (Business) Member No 83822.