Papakura construction hire business in receivership sale

5:00 AM Saturday April 23, 2016 True Commercial

The Trenchmate civil and construction hire yard in Papakura.

A modern and adaptable civil and construction hire business in Papakura is expected to attract immediate interest from buyers looking for a high quality investment.

Placed in receivership last week, Trenchmate is a hire business with a steady sales pipeline and a strong book of work.

Now taking expressions of interest, ABC Business Broker Graeme Finch is expecting competitive investors on this one off opportunity for a company in the construction industry to acquire a multimillion-dollar turnover business at a fire sale price.

“This business has about 40 per cent market share and an ironclad reputation within the industry. It has one of the largest menu of products with over 140 variances in its line,” says Finch, who is marketing Trenchmate for urgent sale with expressions of interest closing on Friday April 29.

Owner Tom Porter says the move to centralise the design and manufacture under one roof has reduced overheads and allowed the company to maintain quality standards that currently exceed the required safety standards.

“Many firms can benefit from a purpose-built warehouse location like this and have the backing of 35 years of combined technical and management experience which is widely recognised within industry,” says Porter.

Independently owned and operated since 1999, Trenchmate has evolved from its beginnings in manufacturing, to the manufacture and supply of hired trenching solutions to leading names in large scale construction industry, for projects such as the Waterview Connection, Waikato Expressway and the Wellington Northern Corridor.

The business now operates from Papakura, in the 1200sq m warehouse completed in May 2015.

TRUECOMMTrenchmate truck with Arm.jpg

A Trenchmate truck deploying its lifting arm.

The Trenchmate range of shoring and versa products comprise a versatile modular system that can create over 140 variations to suit every dig.

“Trenchmate provide a premium product with an extremely high level of service, and a larger range of variations of sizes and configurations than others in the segment,” says Porter.

All trench shield products have been designed and manufactured in house with Trenchmate holding the intellectual property and drawings for all products and accessories. The 140 products within the range are designed for compatibility within the product line and provide a range of solutions to accommodate different requirements. As an independent operation, Trenchmate has no affiliations to any pipe supplier or any other equipment hire firms, its sole function to provide custom solutions and assistance for every project.

An experienced team of 12, “the delivery team,” executes the service oriented focus of the company and receive specialised driver training on how to safely access sites, especially construction sites that may prove very difficult. Porter says the skills and training are a real point of difference for the company as they head into a steady period of trading.

Already as a leader in the trench shield shoring market, Trenchmate has the potential to further realise efficiency gains through expanding the business to improve its national reach after attracting the attention of five of the construction industry’s major players that account for 40 per cent of the businesses total turnover.

Receiver Tom Rodewald from Rodewald Consulting says that the business is in a good position for a director with strong management skills to take control.

Trenchmate reported an estimated Ebitda (earnings before interest, tax, depreciation and amortisation) to March 31, 2015 at $725,000 with a turnover for the 2016 year end at $2.4 million.

Current turnover during the 2016 year has ranged from between $150,000 to $250,000 per month with the business on track heading into 2016 with an estimated stock value of $6m worth of specialised shoring product.

“The business has the potential for someone in the front end of the construction industry to align with Trenchmate to provide a full service construction business, to help grow market share and capitalise on the booming construction market,” says Finch.