$41.8M
$2.7M
7.3x
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The Company is a full-service roofing contractor operating in Florida, offering residential roofing services complemented by an expanding commercial division.With over 20 years of operating history, the business has developed a strong market presence driven by consistent execution, quality workmanship, and long-standing customer relationships.The Company is supported by an experienced workforce and operational infrastructure capable of handling a high volume of projects across multiple service lines.Ownership is seeking a transition to retirement and is open to providing support to ensure continuity.
Why we like it
- Cash generation machine with $2.7M in cash flow on proven 20-year track record. The 6.5% cash flow margin is solid for construction trades, and the absolute dollar generation provides substantial reinvestment capability and owner benefits.
- Essential service in Florida's high-growth, weather-driven market creates natural demand drivers. Roofing is non-discretionary spending driven by insurance claims, storm damage, and building codes, providing recession-resistant revenue streams with geographic tailwinds.
- Established operational infrastructure capable of handling high project volumes suggests systems and processes that can support growth. The experienced workforce and multi-service line capability create barriers to entry for smaller competitors.
- Expanding commercial division represents clear growth vector with typically higher margins and longer-term contracts than residential work. Commercial roofing projects often involve repeat customers and larger contract values, improving revenue predictability.
How to improve it
- Audit and optimize commercial division expansion strategy by analyzing current commercial vs residential revenue mix, margin differential, and pipeline quality. Focus sales efforts on commercial contracts which typically offer better margins and more predictable cash flows.
- Implement advanced project management and estimating software to improve bid accuracy and project profitability. Construction businesses often leak profit through poor estimating and change order management, areas where technology can provide immediate ROI.
- Develop strategic partnerships with insurance adjusters, property management companies, and general contractors to create recurring referral streams. Roofing is relationship-driven, and formalizing these partnerships can reduce customer acquisition costs.
- Establish vendor financing programs for larger residential projects to capture price-sensitive customers and increase average project value. Many homeowners delay roofing projects due to upfront cost, creating opportunity for financing-enabled sales growth.
- Create preventive maintenance service contracts for commercial clients to generate recurring revenue streams. Annual roof inspections and maintenance agreements provide predictable cash flow and early visibility into replacement opportunities.
Diligence notes
- Verify revenue seasonality and weather dependency by reviewing monthly cash flow patterns over multiple years. Florida's hurricane season and storm patterns could create significant quarterly volatility that impacts working capital needs and cash planning.
- Analyze workforce structure, licensing requirements, and key person dependencies since skilled roofing labor is scarce. Review worker compensation insurance costs, safety records, and any pending OSHA issues that could impact operations or insurance costs.
- Deep dive into commercial vs residential revenue mix, margin profiles, and customer concentration. Understanding which segments drive profitability and whether any single customers represent concentration risk is critical for valuation and growth planning.
- Review all insurance policies, bonding capacity, and licensing across Florida jurisdictions. Roofing contractors face significant liability exposure, and understanding current coverage limits and renewal costs is essential for operating cost projections.