Field Notes: Sky’s the Limit?

Exploring an Unusual Aviation Business Opportunity

I love finding unusual businesses for sale. At first glance this listing gives you an “Air America” vibe to be sure, or maybe even Lord of War? This aircraft parts supplier business could be a potentially lucrative investment for a buyer with expertise in or connections to the defense and aviation industry. The asking price seems justifiable given the strategic assets, including real estate and established customer relationships. but the lack of detailed financial information like cash flow or EBITDA makes it a tough nut to crack from just the listing. Is there enough there to dig further? Let’s take a look:

Financial Overview

• Asking Price: $2,500,000
• Gross Revenue: $2,600,000
• Cash Flow: Not disclosed
• EBITDA: Not disclosed
• Inventory: $841,000 (not included in asking price)
• Real Estate: $500,000 (included in asking price)
• Established: 2001

Business Operations

• Location: Lake City, FL
• Industry: Aircraft parts supply, primarily for military contracts
• Employees: 4
• Facilities: 3 acres facility with 3,000 sq ft of office and warehouse space, located near the Lake City, FL Regional Airport

Analysis

Valuation and Price Justification:

• The asking price is close to the gross revenue figure, and might be justified if the business has high profit margins typically associated with specialty supply contracts.
• The real estate inclusion in the asking price adds substantial value, particularly given its strategic location near an airport, enhancing logistical operations.
• Lack of available EBITDA and cash flow details necessitates caution; these figures are critical for assessing the business’s operational efficiency and profitability.

Strengths:

• The business has ISO 9001–2015 certification, which is a significant asset in the defense contracting world.
• Established relationships with foreign air forces and a specialized niche in F16 aircraft parts offer a competitive edge.
• The business is well-established with over two decades in the market, suggesting deep industry knowledge and a stable customer base.

Risks and Considerations:

• The specialized nature of the business means it could be heavily dependent on military spending and foreign policy, which are susceptible to fluctuations.
• The company competes with at least two other businesses in this niche market, and while competition is limited, it remains a factor.
• The business’s reliance on the owner for relationships and expertise presents a risk if not properly managed during the transition.

Opportunities for Growth:

• Expanding the range of parts supplied or entering new markets within the military or civilian sectors could drive growth.
• Leveraging the company’s ISO certification to secure additional contracts with other countries or in other defense-related areas.
• Potential to enhance online presence and marketing efforts to reach a broader base of potential clients, especially in Latin America through the Miami office.

Market and Location:

• The business operates in a niche and specialized market with steady demand, particularly for military and defense equipment.
• The location offers significant logistical advantages, which are crucial for an operation dependent on timely delivery of parts.

About: Silverwave Field Notes combs through and analyzes thousands of businesses available for sale that may be of interest to entrepreneurs looking to acquire an existing business. We are not affiliated with the business listed for sale unless otherwise disclosed. The business highlighted above is represented by Eduardo Sandoval.