Commercial & Industrial Electrical Contractor, Greater Chicago

$1.1M

SDE

2.5x

Multiple

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Full Editorial Writeup

This is a commercial and industrial electrical contractor operating in the Greater Chicago area, serving general contractors, healthcare operators, and school districts. The work mix spans new installations, ongoing maintenance, and code-compliance surveys, which gives it a blend of project-driven revenue and recurring inspection and service work. As a union signatory, the company can flex its labor force up and down to match project demand without carrying bench cost between jobs, a structural advantage in a cyclical construction trade.

The customer base is notable. Healthcare facilities and school districts are among the most stable, well-funded buyers of electrical work, often backed by bonds, capital budgets, and regulatory requirements rather than discretionary spend. That buyer profile, combined with a limited regional supply of qualified electrical contractors, gives the business pricing power and a steady pipeline of bid invitations, some of which it currently declines for lack of estimating capacity.

At $2.8M asking against $1.1M SDE, this is a 2.55x multiple on a trade business with essential demand, institutional customers, and a retiring seller offering transition support. The listing flags concrete growth levers already identified, including data center work, expanded estimating, and converting ad-hoc service into annual contracts. The main unknowns are revenue, backlog quality, and how much of the SDE depends on owner relationships versus a durable organization.

Why we like it

At 2.55x on $1.1M SDE, you are paying roughly $2.8M for a business whose end markets (healthcare, schools, general contractors) keep spending on electrical work through cycles. Electrical is non-discretionary, code-driven, and often legally required, which protects earnings when the broader construction market softens.
The customer concentration leans toward institutional, bond-funded buyers rather than speculative developers, which lowers collection risk and smooths demand. Healthcare operators and school districts replace, upgrade, and inspect electrical systems on mandated cycles, not just when sentiment is high.
Qualified electrical contractors are in short regional supply, and the listing notes the company already turns away bid invitations due to limited estimating capacity. That is a demand-exceeds-capacity signal, and the growth is sitting in the funnel waiting on back-office throughput rather than on net-new demand generation.
The union signatory model lets the company scale labor to project load without carrying idle headcount between jobs. That flexibility protects margin in down periods and lets a new owner chase larger jobs without a fixed payroll bet.

How to improve it

Expand estimating capacity immediately by hiring or contracting additional estimators to convert the bid invitations the company currently declines. Each incremental bid pursued is pure revenue upside with no new marketing spend, since the demand is already being handed to the company.
Convert ad-hoc service accounts into annual service and maintenance contracts to build a recurring revenue base underneath the project work. Contracted maintenance smooths cash flow, raises enterprise value at exit, and deepens switching costs with existing healthcare and school clients.
Pursue the targeted data center opportunity the listing names, since data center electrical work commands premium pricing and multi-year buildout pipelines. Even a limited entry into this segment diversifies revenue away from traditional institutional construction cycles.
Build a formal sales and marketing function, which the listing implies is underinvested. A dedicated business development effort can systematize relationships with general contractors and expand the account base beyond what owner relationships currently drive.
Document and systematize the estimating, project management, and code-survey workflows before the owners exit, to reduce key-person dependency. Codifying how bids are priced and jobs are run protects margin and makes the business sellable at a higher multiple later.
Negotiate preferred pricing and inventory terms with electrical suppliers given $60k of inventory and recurring material spend. In a trade where materials are a large cost line, even a few points of purchasing improvement flow straight to SDE.
Add capacity to self-perform higher-margin specialty work (switchgear, controls, compliance retrofits) rather than subbing it out. Capturing more scope per project lifts job margins and strengthens the pitch to institutional clients who prefer single-source contractors.

Diligence notes

Revenue is not disclosed, so reconstruct it before anything else. On $1.1M SDE you need to know whether this is a $6M or $12M revenue shop, because labor intensity, backlog, and working capital needs differ dramatically and directly affect how transferable the earnings are.
Quantify customer concentration across the healthcare, school district, and general contractor base. If a single GC or district drives an outsized share of jobs, the moat narrows and the multiple should reflect that risk, especially with the owners exiting.
Examine the union signatory agreement in detail, including wage scales, benefit obligations, pension withdrawal liability, and how labor availability is secured during peak demand. Multi-employer pension withdrawal liability is a common hidden landmine in union contractor deals and can dwarf the purchase price.
Assess backlog, work-in-progress, and the pipeline of signed versus bid work, since project businesses can show strong trailing SDE while the forward book is thin. Verify that current SDE is supported by committed jobs, not a one-time surge.
Clarify how much of SDE and customer relationships rest with the retiring ownership group versus a durable management and estimating team. Trade businesses often live on the owner's relationships and licensing, so confirm who holds the master electrician license and whether it transfers.
Review FF&E and work vehicle condition behind the stated $200k, plus any equipment leases or financed assets. Confirm the fleet and tools can carry current and expanded project volume without near-term replacement capex that would eat into cash flow.

Source

Originally listed on BizBuySell. View original listing →