Concrete and Asphalt Tool Manufacturer and Retail Supply Company

We represent a West Coast-based, leading provider of specialized concrete and asphalt tools and equipment. The Company’s success and long standing reputation has been based on creating, designing and manufacturing quality and specialty tools for construction professionals. Key highlights include: • Profitable company with average revenue of $15 million for the last few years, the Company surpassed $17 million in revenue for 2021. • Gross profit margin of around 40% over the last three years. • Committed leadership team with extensive industry experience. • Excellent reputation built over many decades in business. Management believes the timing is right for new ownership, with greater financial resources and marketing channels, to more fully exploit nationwide opportunities for the Company’s products. If you would be interested in obtaining a Confidential Memorandum with additional information, please sign, date and return the attached NDA. Please feel free to email or call should you have any questions. I look forward to following up with you. Location: Orange County, California Year Established: 1948 Number of Employees: 46 Real Estate: Leased Rent: $35,000.00 Per Month Lease Expiration: 8/26/2022 Facilities: The location includes 60,000 sq ft of land, composed of 45% retail, 45% production, and 10% office space. Market Outlook/ Competition: Demand for the Company’s products is driven by construction. Forecasts in the Company’s primary market, Southern California, include: According to the California Economic Forecast, homebuilding and infrastructure projects are underway throughout the state, leading to a rapid recovery in construction activity. Construction employment will soon be completely recovered from the decline caused by the pandemic in 2020. With conditions forecast to largely return to normal by midyear, California GDP is estimated to rise 3.8% this year with strong gains in the second half. Employment surges are expected in construction, professional services, and healthcare. The construction workforce has already been restored to 94% of its February 2020 peak. In Southern California, the California Department of Transportation has taken advantage of reduced traffic during the COVID-19 pandemic to forge ahead on much-needed construction projects. According to a biannual Commercial Real Estate Survey for Winter 2021, conducted jointly by the UCLA Anderson Management School and law firm Allen Matkins, the industrial and multifamily housing market sectors are expected to see significant growth. Demand for industrial spaces is expected to grow faster than supply, which is expected to spark an increase in warehouse building over the next three years. The Biden administration’s recently unveiled American Jobs Plan is a $2 trillion infrastructure plan that seeks to invest in rebuilding the nation’s roads and bridges. The American Jobs Plan would also invest in building and upgrading public schools and community colleges, childcare facilities, affordable housing, VA hospitals and clinics, and federal buildings. National retailers like Home Depot and Lowe’s typically cater to home/DIY enthusiasts. Recently they have tried to penetrate the professional market, such as with Home Depot’s Pro Desk (https://www.homedepot.com/c/professional_contractor). Most professional contractors avoid these big box stores except for certain extenuating circumstances such as sudden on-the-job necessities in remote locations. Growth & Expansion: Additional Manufacturing Shifts — The Company currently operates one manufacturing day shift. By expanding manufacturing to a second (evening) shift and adding 8 hours of additional production each day, the Company could produce more tools, trowels, etc., thereby expanding its product offerings and increasing its revenue potential. o The Company has small customer bases throughout other areas of the U.S. including the East Coast. Increased production capacity would allow the Company to ship additional products to these markets, yielding significant additional revenue. Increased Automation of Manufacturing Processes — By implementing more automated (or semi-automated) production assistance, such as rough grind tools or robotic welding and grinding, the Company could dramatically boost production while reducing labor costs. Additional Retail Locations — The Company could install several smaller storefront locations throughout Southern California. By leveraging its brand name recognition, the Company stands poised to capitalize on a greatly increased serviceable market. Satellite stores could operate with minimal staff of 5–6 employees on a 5,000 sq ft secure yard, potentially generating additional revenue of $3–4 million per year. The Company could increase its reach with satellite locations north of Los Angeles, east out to the Inland Empire, and south down to the border in San Diego. Online Sales — Currently the Company conducts its business through its retail location and through orders placed via telephone. A sizeable opportunity exists in expanding its website to include website retail functionality in the form of a dedicated online storefront, representing the potential for significant revenue growth. International Sales — The Company maintains direct relationships with distributors around the world through its wholesale product line. Through its dedicated international sales rep, the Company has regular sales in Norway, England, and France. The Company believes that significant growth is possible with additional sales personnel for international markets. Specialized Tools: Construction Adhesives — One of the largest market areas for adhesives and sealants is in building/construction. The Company has the opportunity to cross-sell specialized adhesive tools to their existing customer base. There are myriad applications in which these products are used. Steel Multislab Brace Concrete Forms — The Company’s steel concrete forms are an attractive development in concrete setting that can provide rapid setting and stripping. They offer greater strength and durability than wood forms and can save contractors approximately 50% in labor costs. This technique is popular in Texas currently and is just starting to gain traction in Southern California. The Company currently maintains an inventory of steel forms. As the Company continues to educate its current customers on the benefits of steel forms, revenue will continue to grow.