Established Plumbing & Water Restoration Company - Georgia Metro Contractor

$5.6M

Revenue

$1.0M

SDE

7.2x

Multiple

Subscribe Free

Read the full deal writeup

Get Free Access

Already a member? Sign in

Full Editorial Writeup

This is a full-service plumbing and water restoration company operating across a major Georgia metro within roughly a 50-mile radius. The revenue mix is predominantly residential at about 90 percent, split evenly between direct homeowners and recurring property management and home warranty relationships. Service breadth is wide and sticky: water mitigation (leak repair, dry-out, demo and rebuild), plumbing, drain and sewer, main water lines, water heaters, whole-house filtration, sonar leak detection, full repipes, and hydrojetting.

The operation generates $5.6M in revenue and $1.034M in cash flow, with 28 trained employees and a seasoned General Manager who handles office management, property manager relationships, dispatch oversight, and hiring. Dispatching is outsourced to control cost, and the GM is expected to stay. That management depth is what makes this a credible semi-passive or platform acquisition rather than a job you have to show up to every day.

The asking price of $7.4M reflects a 7.16x multiple on cash flow, which is rich for a residential services business and includes roughly $610K of FF&E (5 executive trucks, 5 service vans, a pickup, and a box truck plus the restoration and plumbing equipment package). The water restoration component is the interesting wrinkle: it adds non-discretionary, often insurance-funded emergency revenue on top of the steady plumbing base, and the home warranty and property manager channels provide a repeatable lead flow most plumbers would kill for.

Why we like it

Earnings quality is strong on paper with $1.034M of cash flow on $5.6M of revenue, an 18 percent margin that is healthy for residential plumbing. The 50/50 split between direct homeowners and contracted property manager and home warranty relationships means a meaningful chunk of revenue is recurring and channel-driven rather than purely lead-dependent.
The moat here is the combination of plumbing plus water restoration under one roof, which lets the company capture the full job from leak detection through demo and rebuild. Established home warranty and property management contracts are hard to replicate quickly and create switching costs and predictable volume that a pure call-and-quote plumber never gets.
Both plumbing and water mitigation are non-discretionary and frequently insurance or warranty funded, so demand holds up in a downturn. Pipes burst, heaters fail, and homes flood regardless of the economic cycle, which is exactly the kind of boring, durable cash flow worth paying for.
The operator advantage is real: a seasoned GM already runs dispatch, hiring, and property manager relationships, and all 28 employees plus the GM are expected to stay. This is a platform you can buy and step on top of, not a business that collapses the day the founder leaves.

How to improve it

Audit and renegotiate the home warranty and property management contracts in the first 90 days. These channels often pay below-market rates in exchange for volume, so understanding the per-job economics and pushing for better terms or shedding the worst accounts can lift margin without losing the good volume.
Build a structured emergency water restoration intake and insurance billing process if one is not already formalized. Mitigation jobs that flow into demo and rebuild are the highest-ticket work, and tightening the insurance documentation and supplementing process directly increases average job value.
Add disciplined membership or service agreement programs for the direct homeowner base. Annual plumbing inspections, water heater maintenance, and filtration service plans convert one-time customers into recurring revenue and feed leak detection and repipe upsells.
Layer in digital lead generation and reputation management on top of the existing website. With strong market presence already in place, paid search and Google review velocity can grow the direct homeowner side that carries better margins than the warranty channel.
Implement technician-level job costing and per-truck profitability tracking across the fleet of 12 vehicles. Knowing which crews and service lines actually make money lets you reallocate marketing spend and headcount toward the highest-return work.
Cross-train and dispatch to push the commercial mix above the current 10 percent. Commercial plumbing and restoration jobs tend to be larger and more repeatable, and the existing equipment and crew can absorb that work with better fleet utilization.

Diligence notes

Scrutinize the customer concentration within the home warranty and property management channels. Since that side is half the revenue, you need to know how many warranty firms and PM companies drive it, the contract terms, cancellation provisions, and how renewal-dependent the cash flow really is.
Verify the $1.034M cash flow figure and confirm what add-backs are included. A 7.16x multiple leaves no room for surprises, so reconcile the SDE to tax returns and bank statements and separate true owner discretionary expense from normalized operating cost.
Pressure-test the GM dependency and retention. The thesis rests on the GM staying and managing the property manager relationships, so confirm compensation, any non-compete, whether relationships are personal to the GM, and what happens to volume if that person leaves within 18 months.
Examine the insurance and licensing exposure on the restoration side. Water mitigation and rebuild work carries liability, mold and IICRC certification requirements, and insurance billing compliance risk, so confirm all licenses, certifications, and claims history are clean.
Reconcile the FF&E and fleet condition against the $610K stated value. Confirm the 12 vehicles and restoration equipment are owned free and clear, review age and maintenance records, and assess near-term capex needed to keep the fleet running.

Source

Originally listed on BusinessBroker.net. View original listing →