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Nov 1, 2019Summary: Woodchuck is a $1MM ODCF logging company located in a timber-rich region of the Southeastern U.S. generating steady and reliable cash flow from long-term relationships with its customers, the mills. The Company has coveted “dealerships” in place with all major local mills, making Woodchuck a premier supplier and limiting competition. Woodchuck collects payments weekly from customers via direct deposit. The Company has a reliable crew, and most employees have been with Woodchuck for 5-20+ years.

The Company has been run as a lifestyle business for several decades by the founder/seller, who desires to pursue land brokerage opportunities rather than daily operations of the logging business. Woodchuck is well positioned for growth with unlimited potential to increase capacity by the addition of more crews and the opportunity to capitalize on more of the 2+ million acres of forestland in its immediate service area. 2019 projections show continued consistent cash flow ($2.5MM revenue, $1MM ODCF) and historical performance is strong ($2.2MM and $2.4MM 2017 and 2018 revenue, $810k and $968k 2017 and 2018 ODCF, respectively). The Company maintains current equipment and spends $200-225k annually in capex. Limited competition exists as dealerships with mills are hard to secure, and the market is ripe for continued growth.

Facilities: The Company keeps the equipment at an empty lot owned by the seller. A new buyer will need to find their own empty lot for the equipment when it is not on location at a site.

Growth: Opportunities exist to expand production within Woodchuck’s current geographic footprint as timber demand continues to rise in the state and region. In addition, adding more crews to Woodchuck’s workforce will quickly increase capacity and allow for production outside of the Company’s immediate service area. Additionally, the Company can leverage their dealerships by getting commission from other logging companies for access to their dealerships. Woodchuck can also grow by subcontracting more work, pursuing multi-year contracts and emphasizing a strategic focus on high-volume tracts of land to elicit higher revenue streams.

Competition: Woodchuck competes locally with a few other wood dealers and logging companies that cut in slightly different timber areas. Woodchuck outperforms its wood dealer competitors by eliminating the middle-man through dealerships and getting the job done with new equipment and efficient and reliable crews.

Seller Financing: The company has sufficient assets and cash flow to warrant a full purchase price transaction. We don’t expect the Seller to have to finance any portion of the transaction.
Management Training/Support: One experienced crew run daily operations smoothly and efficiently, with active seller oversight. The Seller owns all relationships with the mills and walks tracts, bids on new land and oversees the administrative assistant who handles HR functions and payroll. The Seller is committed to a meaningful transition period after closing

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