Family Owned HVAC & Plumbing, 14-Year Alabama Contractor

$1.2M

Revenue

$662K

SDE

5.3x

Multiple

Subscribe Free

Read the full deal writeup

Get Free Access

Already a member? Sign in

Full Editorial Writeup

This is a family-owned residential and commercial HVAC and plumbing contractor operating in the growing northern Jefferson County metro area outside Birmingham, Alabama since 2012. The company generates revenue from a balanced mix of commercial work, new construction, maintenance and service, and has built its book almost entirely through referrals and a strong local reputation for reliability and quality. It comes with valuable maintenance contracts, a fleet of 7 work vehicles plus a trailer, and trained technicians who are willing to stay through the transition.

The business does roughly $1.2M in revenue and throws off $662k in owner cash flow, a fat 55% margin that signals a lean, owner-driven operation with minimal overhead. Staffing is thin at just 4 people (1 full-time, 3 contractors), which is both the reason margins are so high and the clearest constraint on growth. Management flags unfilled demand the current team simply cannot service.

The seller is retiring and offering a training and transition period. A buyer will need to hold both an Alabama HVAC Contractor license and a Master Plumbing license, or bring on a qualifier who does, which narrows the buyer pool to existing operators or licensed technicians ready to own. The 4,200 sf facility is leased from the current owner at $3,500 per month, and the business is relocatable within the service area.

Why we like it

Earnings quality is exceptional on paper: $662k of cash flow on $1.2M of revenue is a 55% margin, well above typical HVAC comps that run 15-25%. That spread almost certainly reflects an owner doing significant billable work and running lean, so the real question in diligence is how much of that cash flow survives once you pay a market-rate replacement.
HVAC and plumbing are about as recession-resistant as home services get, because a broken furnace or burst pipe is a non-negotiable spend regardless of the economy. The listing explicitly calls out valuable maintenance contracts, which convert one-off service calls into predictable recurring revenue and smooth out seasonality.
Northern Jefferson County is a growing metro corridor with steady new construction and residential density, and the listing notes unfilled demand the current team cannot service. That is a rare setup where the growth is already knocking and the constraint is purely capacity, not lead generation.
The combined HVAC plus plumbing license requirement and 14 years of referral goodwill create a real moat against fly-by-night competition. Trained technicians are willing to stay, which de-risks the handoff and preserves the field capability that actually generates the revenue.

How to improve it

Add field capacity immediately by hiring two to three additional techs to capture the unfilled demand management already identifies. With referral flow already outpacing the current 4-person team, incremental headcount should convert directly into revenue without new marketing spend.
Build out a formal maintenance agreement program with tiered annual plans and auto-renewal billing. Converting service customers into contracted members raises recurring revenue, smooths cash flow across seasons, and materially lifts the multiple at your own eventual exit.
Layer in a real marketing engine: local SEO, Google LSA, and a reviews flywheel. The business has grown almost entirely on referrals, so a modest digital acquisition budget applied to an already trusted brand should compound lead volume quickly.
Add electrical services as the listing suggests, cross-selling into the existing HVAC and plumbing customer base. Bundling a third trade increases ticket size and wallet share per household without the cost of acquiring new customers.
Formalize the operation off the owner: document pricing, dispatch, and job-costing so the business runs on systems rather than the founder. This is essential since the current 55% margin is likely owner-labor-heavy and needs to be institutionalized to protect earnings.
Negotiate the owned facility lease terms carefully, ideally locking a long-term lease at the stated $3,500 per month or exploring a purchase. Securing the location protects continuity and removes relocation risk from a business built on local presence.

Diligence notes

Scrutinize how much of the $662k cash flow depends on the owner's personal billable labor and licenses. At a 55% margin on $1.2M, a large share may vanish once you pay a market-rate licensed replacement, and that directly determines whether 5.29x is realistic or aggressive.
Verify the licensing path in detail: the buyer must hold both an Alabama HVAC Contractor license and a Master Plumbing license. Confirm whether existing staff can serve as qualifiers, because this requirement sharply narrows who can legally operate the business day one.
Quantify the maintenance contracts the listing calls valuable: number of active agreements, renewal rates, annual contract revenue, and transferability. This is the recurring backbone that justifies the premium, so it must be documented rather than assumed.
Examine the revenue mix across commercial, new construction, maintenance, and service, plus customer concentration. New construction is the most cyclical leg, so understand how much of the profit rides on building activity that could soften in a downturn.
Confirm the workforce reality: only 1 full-time employee and 3 contractors support $1.2M in revenue. Validate that the contractors are genuinely retained, understand the true labor cost, and assess re-classification and continuity risk if key people leave post-sale.

Source

Originally listed on BizBuySell. View original listing →