Fourth-Generation Plumbing & HVAC Company, 100-Year Chicago Contractor

$3.5M

Revenue

$1.3M

SDE

4.2x

Multiple

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Full Editorial Writeup

This is a fourth-generation Illinois plumbing and HVAC contractor based in Chicago with more than 100 years of operating history, roughly $3.5 million in trailing-12-month revenue and $1.3 million in reported EBITDA. The work mix is diversified across two complementary trades and three revenue types: approximately 50% service, 25% new construction and 25% remodeling, with a residential HVAC division layered on top. That spread matters because it reduces the cyclicality that pure new-construction shops carry, and the service component provides a steadier base of repeat demand.

The business is union staffed with roughly 9 to 10 employees and runs a fleet of 11 to 12 trucks, the oldest dating to 2016. The seller reports about $2 million in equipment and $1 million in inventory (inventory not included in the asking price), so a meaningful chunk of the $5.5 million ask reflects hard assets rather than pure goodwill. Existing service contracts generate approximately $4,000 to $6,000 per month, a small but real recurring base that a disciplined operator could expand into a far larger maintenance book.

The owners are retiring after four generations, which is the classic setup for a transition risk but also a clean strategic rationale. At a 4.23x EBITDA multiple the headline number looks reasonable for the trade, though the margin profile (37% EBITDA on $3.5M revenue for a union shop) deserves scrutiny because it runs rich versus typical plumbing and HVAC comps. This fits a well-capitalized operator, an existing plumbing or HVAC company rolling up, or an investor who can install management given the retiring ownership.

Why we like it

Earnings quality looks strong on paper at $1.3M EBITDA on $3.5M revenue, a 37% margin that is unusually high for a union plumbing and HVAC shop. That margin is the single biggest thing to verify, because if real it is excellent and if inflated it rewrites the entire deal. The revenue mix of 50% service lowers dependence on lumpy construction cycles.
A 100-year, fourth-generation operating history is a genuine moat in the trades, where reputation, licensing, union relationships and a century of referral flow are hard to replicate. Customers in plumbing and HVAC default to the known local name, and that brand equity transfers if the handover is handled well. The dual-trade setup also creates cross-sell density within an existing customer base.
Plumbing and HVAC are about as recession-resistant as home services get, because busted pipes and dead furnaces are non-discretionary emergencies regardless of the economy. The Chicago climate makes HVAC demand structurally seasonal but reliable, and replacement work does not wait for a boom. This is the kind of boring, essential cash flow that compounds.
The buyer inherits an operating business with people, a 11 to 12 truck fleet (newest vehicles from 2016+) and roughly $2M in equipment, not a startup. The existing $4,000 to $6,000 monthly service contract base is a ready-made foundation to expand into a much larger recurring maintenance program. That is a real operator advantage versus building a book from scratch.

How to improve it

Attack the service contract book immediately, because $4,000 to $6,000 per month is tiny relative to the install and service base this company touches. Launch a structured maintenance membership program with annual plumbing inspections and HVAC tune-ups, and tie every service and install call to a membership offer at the point of sale. Even modest enrollment growth compounds into high-margin recurring revenue.
Systematically cross-sell between the plumbing and HVAC divisions, which appear to operate as two lines rather than one integrated offer. Train technicians to flag and quote the other trade on every visit, and bundle maintenance plans covering both. A single customer relationship serviced across both trades roughly doubles lifetime value with near-zero customer acquisition cost.
Implement local digital marketing and reputation management, which a 100-year-old family shop almost certainly underinvests in. Claim and optimize Google Business Profile, run geo-targeted paid search for emergency plumbing and HVAC terms, and build a review engine. Capturing high-intent local demand is the cheapest growth lever in this trade.
Modernize operations with field-service management software for dispatch, scheduling, quoting and automated customer follow-up. A century-old family operation likely runs on tribal knowledge and manual processes that create key-person risk and lost revenue. Tightening job costing and technician utilization directly protects the margin that makes this deal work.
Right-size and manage the union labor cost structure carefully, since 9 to 10 union staff on $3.5M revenue drives the cost base. Audit technician billable hours, overtime and per-truck revenue, then push underperforming trucks toward target productivity. Adding technicians only where per-truck economics are proven avoids diluting the margin.
Expand into nearby suburban communities using the existing fleet and brand rather than opening new locations. Incremental geographic reach adds route density and revenue without new fixed overhead. Hire technicians against confirmed demand so headcount scales with booked work, not speculation.

Diligence notes

Verify the 37% EBITDA margin above all else, because it is well above typical plumbing and HVAC comps and union shops in particular. Pull 3 years of tax returns and financials, confirm owner compensation and any add-backs, and check whether the $1.3M figure is normalized or raw. If the margin is dressed up with aggressive add-backs or owner labor not replaced, the real multiple and price are very different.
Scrutinize the asset mix inside the $5.5M ask, since the seller reports roughly $2M equipment (FF&E included) plus $1M inventory (not included). Independently appraise the fleet and equipment, confirm what actually transfers, and separate hard-asset value from goodwill. A large share of the price sitting in used trucks and equipment changes the quality of the earnings you are buying.
Examine the union labor agreement in detail, including wage escalators, pension and benefit obligations, and any multiemployer pension withdrawal liability. Withdrawal liability in particular can create a large hidden obligation that survives the sale. Understand how the collective bargaining agreement constrains staffing flexibility and future cost increases.
Pin down the real durability of the $4,000 to $6,000 monthly service contracts, including contract terms, renewal rates, churn and whether they are true agreements or informal arrangements. Also quantify customer concentration across the construction and remodeling revenue, which can be lumpy and relationship-dependent. Retirement transitions in family trades carry real risk of customer and referral attrition.
Assess key-person and transition risk given four generations of family ownership and no disclosed seller transition or training commitment in the listing. Determine who holds the master licenses, key customer relationships and vendor terms, and whether they leave at close. Negotiate a defined transition period and license continuity, because losing the licensed principal can halt operations.

Source

Originally listed on BizBuySell. View original listing →