PUBLIC NOTICE OF SALE: Traffic Control Service Provider

Strategic Investment Opportunity:
Traffic Control Service Provider
DBE/DVBE/MBE/SBE certified business

COMPANY OVERVIEW

The Company, established in 2008, is a family-owned and operated business that provides labor, permitting services and traffic control equipment for transportation related construction zones. The Company is a DBE/DVBE/MBE/SBE certified traffic control expert involved with field setups, equipment rental and sales, project management, traffic plan drafting and consulting with general contractors on their traffic control requirements. Safety and cost efficiency around the construction work zone in a road, highway or interstate work zone is paramount. Customer contracts can last several years as projects often are large infrastructure based (largest contract to date is approximately $3MM/year over 3 to 4 years). The Company’s workers are the first and last parties to leave the work zone each day.

Headquartered in Southern California, the Company mostly serves Los Angeles, Orange, and San Diego Counties. California Department of Transportation (Cal Trans) is the primary agency overseeing transportation projects for the state highways. Additional agencies oversee local projects, including substantial work that is underway for the 2028 Summer Olympics taking place in Los Angeles. The Company is a sub-contractor that has strong relationships with the general contractors in the region doing this work (are classified as a Preferred sub-contractor by 90% of their customers). The company has 75 employees, of which 50 are union workers (Laborers International Union – contract expires in 2026).

Note: As a certified DBE/DVBE/MBE/SBE company, the Company, or their customers (general contractors) receive bid preference from the state of California. The Company’s certifications are active and up to date.

SITUATION OVERVIEW

The Company experienced losses during 2021- 2023 due to several factors i) a former business partner caused disruption along with a dozen line employees, ii) GC’s are consistently slow payers causing operational and planning inefficiencies managing multiple projects, iii) significant and extended rains in Southern CA the first 6 months of 2023 caused large project delays and then overload and catch up pressures the second half of the year, and iv) competitive pricing pressure as a small company in this highly regulated market. This has resulted in strained cash flow causing AP ($3.4MM) to be extended (lawsuits from various suppliers currently), payroll taxes to be in arrears ($3.5MM) and an AR over advance from lender (AR based facility with a factoring company). Newpoint Advisors has been engaged to assist the Company with i) enhancing operational efficiencies and processes ii) implementing a 13-week cash flow model and iii) exploring a new strategic owner/partner. Tax Guard has been engaged by the Company (waiting on assignment of revenue officer).

OPPORTUNITY

The Company operates in a space that has significant project potential during the foreseeable future, and their customers (GC’s) tend to always pay given Cal Tran funded, however to operate more effectively and profitably they need a) a new operations leader (COO) to manage the day-to-day operations and implement better oversight and planning and b) a new strategic and financial alliance that will allow the Company to better take advantage of the opportunities in LA County and surrounding areas going forward.

NOTE: The Company’s business plan and financials have not been audited by Newpoint Advisors Corporation and are subject to the potential financier’s due diligence. The purpose of this document is to gauge potential interest in the Company described above.

About Newpoint Advisors Corporation

Newpoint Advisors Corporation  is a financial advisory firm dedicated to improving troubled and financially underperforming businesses with revenues of $5MM-50MM. Our collaborative, process-oriented approach allows us to deliver objective solutions for a fixed fee and on a fixed timeline. Newpoint Advisors believes in a cooperative team approach: we work with our clients to educate them in ways that maximize profitability and growth. Please contact any members of our team if you are interested in this opportunity.

David Scott
[email protected]
(630) 914-0080

Katie Butler
[email protected]
(775) 997-4703