Established Paving & Walkway Contractor, 40-Year New York Operator

$5.5M

Revenue

$1.6M

SDE

2.8x

Multiple

Subscribe Free

Read the full deal writeup

Get Free Access

Already a member? Sign in

Full Editorial Writeup

This is a paving and walkway construction company founded in 1983, operating for roughly four decades in one of New York's most affluent markets. The company handles residential and commercial paving with a $1.2M equipment package included in the sale, a 30-person full-time crew, and a management team that already runs daily operations. The seller also runs a seasonal snowplowing service in winter, which layers some counter-cyclical work onto the summer-weighted paving calendar.

On the numbers, the business does $5.45M in revenue and $1.6M in cash flow, a healthy 29% owner-earnings margin for a construction services firm. At a $4.5M ask, that is 2.81x cash flow, which is fair to attractive for a paving business with real equipment behind it and a management layer that lowers key-man risk. The catch is that $1.2M of the price is FF&E and equipment, so a large portion of what you are buying is depreciating steel rather than pure goodwill.

The seller owns the property and is retiring to focus on rental real estate. The building is not in the deal; it is offered on a long-term lease at $20K per month through 2035, which is a real $240K annual fixed cost that must be underwritten into forward EBITDA. The affluent, less price-sensitive customer base is a genuine positive for margins, but paving is a project-based business with no contractual recurring revenue, so the durability question is whether that demand and reputation carry through a slower construction cycle.

Why we like it

Earnings quality is solid for the category: $1.6M cash flow on $5.45M revenue is a 29% margin, and EBITDA of $1.635M sits right alongside SDE, suggesting limited owner add-back gymnastics. A four-decade operating history through multiple cycles supports the idea that these earnings are real and repeatable rather than a one-year spike.
The moat here is reputation plus positioning in one of New York's wealthiest regions, where customers value workmanship over price and pay accordingly. Forty years of continuous operation in that market builds referral density and a brand that is hard for a new entrant to replicate quickly.
The included $1.2M equipment package gives you immediate operational capability and removes near-term capex you would otherwise have to fund. Owning the fleet also lets you flex between paving in the warm months and snowplowing in winter without leasing gaps.
An experienced management team already oversees daily operations, which materially lowers transition and key-man risk for a buyer stepping in. This is close to a manager-run structure, meaning an operator can focus on growth and geographic expansion rather than getting stuck in the field on day one.

How to improve it

Attack the geographic expansion the seller flagged: adjacent affluent counties are the obvious first move. With a crew and equipment base already in place, adding a second service territory can lift utilization on existing overhead without proportional cost.
Formalize the snowplowing side into contracted seasonal agreements rather than weather-dependent one-offs. Multi-year plow contracts with commercial properties and HOAs would add the only recurring, counter-cyclical revenue this business can realistically build.
Build a maintenance and resealing program that brings past paving customers back on a scheduled cycle. Asphalt needs sealcoating and repair every few years, so a proactive callback system turns a one-time install into a recurring relationship in an affluent, sticky client base.
Tighten pricing and job-costing systems to make sure the less price-sensitive market is actually being captured in margin. In affluent markets there is often room to raise average ticket 5 to 10% with better proposals and premium finish options.
Reduce reliance on the seller's relationships by documenting the sales pipeline, key referral sources, and estimating process before close. Codifying how work gets won protects the goodwill you are paying for once the founder retires.
Evaluate the $20K per month lease against buying the property from the seller down the line. At $240K a year, controlling the yard and indoor maintenance facility could remove a major fixed cost and add real-estate equity to the deal.

Diligence notes

Underwrite the $240K annual lease into forward earnings. The seller owns the property and is keeping it, so the $1.6M cash flow must be checked for whether current rent is already reflected or whether $20K per month is a new post-sale cost that compresses true EBITDA.
Separate goodwill from hard assets in the valuation. With $1.2M of FF&E in a $4.5M ask, get an independent appraisal of the equipment fleet's age, condition, and remaining useful life, because you may be paying growth multiples on depreciating steel.
Verify revenue seasonality and customer concentration across paving and snowplowing. Ask for three years of monthly revenue, top-customer breakdown, and how much of the plow revenue is repeat versus one-off, since the listing offers no contract detail.
Confirm the management team's tenure, compensation, and willingness to stay post-close. The manager-run structure is a core part of the thesis, so retention agreements and a real understanding of who actually wins and runs jobs are essential.
Stress-test demand durability through a construction slowdown. Paving is discretionary project work tied to property improvement, so review how revenue held during 2008 to 2010 and 2020 to gauge how the affluent-market cushion actually performs under stress.
Scrutinize the listing's professionalism and data hygiene given the typos and all-caps notes in the ad. Insist on CPA-reviewed or tax-return-backed financials rather than seller-prepared figures before trusting the 2.81x multiple.

Source

Originally listed on BizBuySell. View original listing →