East Texas Roofing Leader, 55-Year Residential & Commercial Contractor

$4.5M

Revenue

$844K

SDE

3.8x

Multiple

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Full Editorial Writeup

This is a confidential acquisition of an East Texas roofing contractor that has been operating since 1965, serving both residential and commercial customers across a broad regional footprint. The company installs and repairs asphalt-shingle and standing-seam metal roofing, and handles estimating, project supervision, and quality control through a mix of experienced field crews and subcontractor labor. Fifty-five years of continuous operation, durable supplier relationships, and a base of repeat and referral business are the core of what a buyer is paying for.

The financials are solid but require unpacking. Filed tax returns support roughly $5.05 million in average annual revenue for 2023 through 2025, though FY2025 revenue dipped to $4.47 million. Seller-adjusted cash flow of about $844K is presented before a buyer-specific replacement management expense, and it leans on average 2023-2024 EBITDA plus documented family compensation. In plain terms, that $844K SDE assumes the buyer can replace family labor cheaply, which is exactly why the seller is offering to stay on in construction oversight at $100K per year.

At a $3.2M asking price against $844K SDE, this is a 3.79x multiple for a legacy home-services business with real assets: transferable operating contracts, company vehicles, and equipment. Real estate is not included. The pitch to strategic and financial buyers is the same one every 55-year contractor runs: durable demand, an underinvested sales and digital function, and room for purchasing and overhead synergies for anyone who already runs roofing crews in adjacent Texas markets.

Why we like it

Roofing is about as recession-resistant as home services gets, because a leaking or storm-damaged roof is non-discretionary and often insurance-funded. A 55-year operating history through multiple downturns and a strong storm-prone Texas geography give this real earnings durability. The mix of both residential and commercial work smooths out demand across cycles.
The moat here is time and relationships, not technology. Five decades of durable customer, supplier, and production relationships plus repeat and referral business create switching inertia that a two-year-old competitor cannot replicate. Supplier relationships also matter for material pricing and availability, which is where roofing margins live or die.
The seller is offering to stay in construction oversight at a defined $100K per year, which de-risks the single biggest threat in a legacy contractor: loss of production knowledge and crew loyalty at handoff. That is a rare, concrete continuity offer versus the vague transition promises most listings make. It also gives you time to install your own operator without a revenue cliff.
The improvement thesis is genuinely credible and underexploited. Management admits there is no dedicated sales leadership, weak digital lead conversion, and no centralized purchasing or reporting. For an operator who runs a tight sales and marketing motion, that is upside sitting in plain sight rather than a business already squeezed dry.

How to improve it

Install dedicated sales leadership and a follow-up system in the first 90 days, because the listing explicitly flags weak sales follow-up as a gap. A single competent sales manager working the existing inbound and referral flow can lift close rates on jobs the company is already quoting. This is the fastest path to reversing the FY2025 revenue dip back toward the $5M average.
Rebuild digital lead conversion with a modern website, Google Local Service Ads, and review generation across the East Texas footprint. Legacy roofers routinely leave homeowner leads on the table because they rely entirely on word of mouth. Even a modest paid-search program in storm-prone Texas markets can add high-margin residential jobs.
Centralize purchasing and lock in volume pricing on shingles and metal from core suppliers. Material cost is the largest variable in roofing gross margin, and a business this size may be buying at retail-adjacent rates. Renegotiating supplier terms flows straight to EBITDA with no revenue growth required.
Build a formal recruiting and crew-retention pipeline to reduce reliance on ad hoc subcontractor labor. Labor availability caps how many jobs you can run at once, so a steady flow of trained field resources directly expands capacity. This is essential before any geographic expansion.
Push into the higher-margin standing-seam metal and commercial segments, which command better pricing and longer job values than residential re-roofs. The company already offers metal roofing, so this is deepening an existing capability rather than a cold start. Commercial contracts also add larger, more predictable project backlogs.
Stand up basic management reporting: job-level margins, pipeline, and cash conversion. A 55-year owner-run shop likely manages by feel, and you cannot improve what you cannot measure. Clean dashboards also make the next add-on acquisition far easier to underwrite and integrate.
Introduce recurring maintenance and inspection agreements for commercial roofs to add a repeat-revenue layer to an otherwise project-based business. Annual inspection contracts create predictable cash flow and put you first in line when a full re-roof is eventually needed. This directly addresses the model's biggest weakness, that every job must be newly won.

Diligence notes

Scrutinize the $844K SDE bridge closely, because it is presented before a buyer-specific replacement management expense and relies on average 2023-2024 EBITDA plus documented family compensation. If you cannot replace family labor at or below the $100K the operator is asking, real SDE is materially lower. Pin down exactly how many family members work in the business and what they are actually paid versus market rate.
Investigate the revenue trend, since FY2025 at $4.47M is below the 2023-2025 average of roughly $5.05M. Determine whether that decline reflects a soft storm year, lost accounts, capacity constraints, or an owner winding down effort ahead of sale. A shrinking top line changes both the growth story and the defensible multiple.
Quantify how much of production runs through subcontractor crews versus employed field staff. Heavy subcontractor reliance affects margin stability, quality control, and warranty exposure, and it raises questions about how transferable the crews really are. Confirm whether key crews and their loyalty transfer with the deal.
Verify the condition, value, and lien status of the included vehicles and equipment, since the listing conditions the sale on title review and lien verification. Roofing fleets and equipment carry meaningful replacement cost, so confirm what is owned free and clear versus financed or leased. This directly affects how much of the $3.2M price is asset-backed.
Review warranty and workmanship liability, insurance claims history, and any open litigation, given 55 years of installed roofs across a large footprint. Latent warranty obligations and past storm-claim disputes can create real tail liabilities. Confirm bonding, licensing, and insurance are all current and transferable.
Assess customer concentration and the split between insurance-driven storm work and organic replacement demand. Heavy dependence on a few commercial accounts or on a single big storm season creates lumpy, hard-to-forecast revenue. Understand how much of the base is genuine repeat and referral versus one-time storm chasing.

Source

Originally listed on BizBuySell. View original listing →