B2B Technology Procurement Firm, 40-Year Suffolk County NY Reseller

$10.3M

Revenue

$508K

SDE

3.9x

Multiple

Subscribe Free

Read the full deal writeup

Get Free Access Access Unlimited Deals

Already a member? Sign in

Full Editorial Writeup

This is a 40-year-old technology procurement and reseller business based in Suffolk County, NY, that sources and fulfills IT infrastructure, networking gear, electronics, and IP surveillance/security equipment for institutional, commercial, and government-related customers. The company functions as a middleman: it wins orders, coordinates sourcing through manufacturer and distributor relationships, and manages fulfillment and project support. At roughly $10.3M in revenue on $508k of SDE, this is a classic high-volume, low-margin distribution model where the SDE margin sits under 5 percent.

The business is built on long-standing vendor and customer relationships and, critically, on M/WBE certification that is described as integral to its operations. That certification is both the moat and the constraint: a meaningful slice of revenue likely flows through set-aside or preference programs tied to minority/women-owned status, which is why any buyer must themselves qualify for and obtain MBE or WBE certification after close. This narrows the buyer pool substantially and is the single most important feature of the deal.

The operation runs lean with just 5 employees, a 2,300 SF leased space, and modest working assets ($25k inventory, $22k FF&E). The seller is retiring and offering 6 weeks of training plus a small $200k seller note. At a 3.94x SDE multiple and SBA prequalification, the price is reasonable for a profitable distribution business, but the certification requirement and thin margins define the risk profile.

Why we like it

Four decades of operating history and a sub-5x SDE multiple with SBA prequalification give a capital-efficient entry into a cash-generating distribution business. At $2M asking against $508k SDE, the headline economics are defensible if the earnings hold through transition. The small $200k seller note signals some alignment but is light relative to the price.
The M/WBE certification is a genuine, hard-to-replicate moat. Set-aside and preference programs steer government and institutional contracts to certified vendors, which means this business competes in a protected lane rather than against every national reseller on price. That protected channel is exactly why the listing restricts buyers to those who can obtain certification.
The customer base is institutional, commercial, and government-adjacent with repeat technology needs, and organizations continue investing in networking, surveillance, and infrastructure modernization. These are durable B2B spending categories, especially in physical security and government IT refresh cycles. A buyer who maintains the vendor relationships inherits a steady order flow.
The business is lean and manager-supported with only 5 employees and low turnover, so overhead is minimal and the operating model is scalable. A certified, well-capitalized owner could pursue larger infrastructure and security projects and deepen account penetration without a heavy cost base. The streamlined structure keeps breakeven low.

How to improve it

Audit the revenue mix by customer and by whether each dollar depends on M/WBE set-aside status versus open-market sales. Understanding exactly how much revenue is tied to certification tells you how durable the business is and where pricing power actually exists. This is the first 30-day priority before any growth plan.
Push aggressively on gross margin, which is the real lever in a sub-5 percent SDE distribution model. Renegotiate vendor rebate and volume tiers, add higher-margin services like installation, project coordination, and managed procurement, and bundle surveillance/security work where margins are richer than commodity hardware. Even a point or two of margin meaningfully moves SDE.
Build recurring revenue by converting one-off hardware procurement into maintenance, refresh, and managed-service agreements. Security and networking equipment lends itself to service contracts and scheduled upgrade cycles that smooth out lumpy order flow. Recurring agreements also raise the eventual exit multiple.
Formalize and expand the M/WBE certification footprint across additional states and agencies. Many jurisdictions run separate certification programs, and each one unlocks a new protected pipeline of contracts. Pursuing multiple certifications multiplies the addressable set-aside market.
Add a dedicated sales function to chase larger institutional and infrastructure projects rather than relying on inbound repeat orders. The listing explicitly flags larger project pursuit as upside, and a single outside salesperson could materially grow account penetration. Track pipeline and win rates from day one.
Document vendor relationships, pricing agreements, and purchasing processes before the seller departs. With only 5 employees and 40 years of informal relationships, key-person risk is high and institutional knowledge likely lives in a few heads. Codifying this protects continuity and makes future delegation possible.
Tighten working capital management around inventory and receivables given the high revenue-to-SDE ratio. In a low-margin, high-volume model, cash conversion and payment terms matter more than headline growth. Optimizing payables and receivables can free up meaningful cash.

Diligence notes

Verify the exact mechanics and revenue dependency of the M/WBE certification. Confirm how much revenue flows through set-aside or preference programs, whether a new owner can realistically obtain certification post-close, and how long that process takes. If certification lapses or cannot be re-obtained quickly, a large portion of revenue could evaporate.
Scrutinize customer concentration and contract structure given government-adjacent and institutional buyers. Determine whether revenue comes from a handful of large accounts, whether contracts are recurring or purely transactional, and how sticky those relationships are without the retiring founder. Lumpy project revenue would make the earnings far less durable.
Examine gross margin trends and vendor terms over the last three to five years. A sub-5 percent SDE margin on $10M revenue means small shifts in pricing, rebates, or cost of goods swing profitability dramatically. Confirm whether margins are stable or compressing in a competitive hardware market.
Normalize the SDE and confirm the add-backs, especially owner compensation and any one-time items. Validate that the $508k SDE reflects a truly transferable business rather than earnings dependent on the retiring owner's personal relationships and hustle. Reconcile reported SDE against tax returns and bank statements.
Assess the lease on the 2,300 SF facility at $3,508 per month, including remaining term and renewal options. Confirm the space supports current operations and any growth plans, and whether the landlord relationship transfers cleanly. A short or unfavorable lease adds relocation risk to a thin-margin business.

Source

Originally listed on BizBuySell. View original listing →