Outdoor Furniture Manufacturing and Distribution Company – Has Accepted Offer
Price: $52,000,000
Annual Revenue: $89,170,000
Net Cash Flow: $11,448,000
Industry: Manufacturing
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The company was founded 30 years ago and has evolved from a modest import and distribution operation into a leading force in designing, manufacturing, and distributing outdoor furniture. There are 6 locations worldwide, including a showroom in Florida, USA. With its successful history and a strong international focus, the company is poised for further growth.
The team’s unwavering commitment through pandemic challenges has resulted in extraordinary growth and financial success. Now, seeking a strategic acquirer to elevate it to the next level, this company stands as a testament to quality, scale, and global expertise, with FY23 Group Revenue of AUD124M and EBITDA of AUD15.8M.
Having nurtured strong, long-term relationships, the company collaborates with over 35 suppliers across three countries. Purchases are equally divided between Vietnam with approximately 25 suppliers, and China, with approximately 10 suppliers, while the contribution from a single Indonesian supplier is minimal.
Team: The company is led by the owner (CEO) who is supported globally by 143 resources.
Services and Customers: The product lines are categorized into three main groups:
- Timber: Manufactured in Vietnam and sold to all territories.
- Metal: Manufactured in China, primarily sold in Australasia, with significant potential in international markets.
- Wicker: Manufactured in China, primarily sold in Australasia, with significant potential in international markets.
In Vietnam, the product range includes Dining settings, Lounge settings, Benches, and Cushions. In China, it consists of Dining settings, Sun lounges/lounges, Benches, and Hanging chairs.
The company operates with a year-round product development approach, actively participating in industry trade shows and customer presentations. Their agility and flexibility in product development and production, along with seamless collaboration between hemispheres, enable them to seize diverse opportunities in the market. Products are sold on a Free on Board (FOB) basis in USD to its customers, or wholesale in AUD.
The company caters to nearly all prominent outdoor furniture suppliers in Australia and serves over 100 diverse international customers. While it maintains a significant contract to supply a specific Australian customer’s stores, no individual customer contributes more than 6% to the total revenue.
** Financials presented in AUD in the CIM
Summary
Potential Growth:
The group has identified four significant avenues for organic growth:
- North America: The U.S. market presents a substantial opportunity for timber-based products sourced from Vietnam. With the recent addition of an East Coast account manager, the business has already seen sales growth from USD3.8 million in FY21 to USD5 million in FY22, with expectations of reaching USD12 million in FY23. Strong interest from U.S. National Retailers and the extensive addressable market makes North America a promising growth area. Plans are in motion to hire a West Coast manager to fully tap into this lucrative market.
- Wicker/Metal Expansion into Europe: While currently offering timber-based products from Vietnam to European customers, there is growing demand for wicker and metal product ranges. The business is poised to enter the European market in these two categories, representing a highly attractive growth strategy.
- Australasia: There is room for market share expansion in Australasia, but it will necessitate investment in additional local resources. The business’s robust supply chain and scale efficiencies allow competitive pricing, positioning it favorably against competitors. Alternatively, a review of pricing policies could enhance margins and profitability, potentially prioritizing profitability over higher growth in Australian revenues.
- Rest of World (ROW): The ROW market, encompassing the Middle East, Asia, South Africa, and South America, holds the potential to become a volume driver. However, realizing this potential will require additional resources to raise awareness and drive activity in these regions.