Hardscape & Landscape Supply Yard, Metro Detroit Distributor with Real Estate

$6.1M

Revenue

$829K

SDE

6.3x

Multiple

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Full Editorial Writeup

This is an established hardscape and landscape supply distributor serving contractors and homeowners across Metro Detroit. The business carries a full line of pavers, retaining wall systems, natural stone, and bulk and bagged landscape materials, backed by long-standing manufacturer relationships. Revenue comes from both trade accounts and walk-in retail, with a base of repeat contractor customers, an in-house delivery fleet, and an experienced yard and sales team already in place.

FY2025 produced $6.2M in revenue and $789K in SDE, with 2026 tracking toward roughly $829K SDE on similar revenue. The improvement is being driven by gross margin expanding from 27% to 31% (H1 actual, H2 projected), a meaningful move for a materials distribution business where pennies of margin matter. Note that the SDE adds back approximately $268K of rent paid to a related real estate entity, which is appropriate since the $2.7M of owned real estate is included in the $5.2M asking price.

The business is seasonal, with the bulk of sales concentrated in the second half of the year, and inventory of roughly $700K is included in the deal. Marketing is described as minimal, and the seller flags obvious extensions like installation services, snow removal, contractor programs, and expanded delivery as untapped growth. The asking price allocates about $2.7M to real estate and $2.5M to the operating business plus inventory.

Why we like it

Earnings quality is reasonable but needs scrutiny: on a reported $829K SDE, roughly $268K is a rent add-back for the related real estate, meaning the operating business plus the building together generate the cash. If you back out the real estate at a fair cap rate, the true operating SDE is closer to $560K, and that is the number the $2.5M business allocation should be measured against.
The contractor account base creates sticky, repeat demand that a pure retail store would not have. Pros buy pavers, wall block, and bulk stone project after project, and switching suppliers mid-season is painful, which gives this yard a durable local position and pricing leverage.
The real estate is a genuine asset, not just a multiple inflator. A supply yard needs acreage, outdoor storage, and truck access, so owning the dirt protects the business from rent escalation and gives a buyer a hard asset backing roughly half the purchase price.
Margin is already moving the right way, from 27% to a projected 31%. If that holds through a full year rather than being a projection-driven H2 figure, it meaningfully changes the economics on flat revenue, which is the cleanest kind of profit growth.

How to improve it

Verify and then institutionalize the margin expansion. The jump from 27% to 31% is half actual and half projected, so lock in vendor rebate programs, tighten freight and yard shrink, and audit pricing on high-turn SKUs to make sure the gain is structural and not a one-time inventory or mix event.
Launch a real marketing and contractor loyalty program. Management admits marketing is currently minimal, so a basic CRM, tiered contractor pricing, project financing, and a simple referral engine could pull volume from competing yards without adding fixed cost.
Attack the seasonality directly with winter revenue. The seller flags snow removal and winter projects as opportunities, and bolting on bulk salt, ice-melt, and snow-and-ice supply would smooth the H2-heavy revenue curve and keep the fleet and team productive year round.
Add installation and delivery as margin layers. The yard already sells to installers, so capturing a slice of the labor through a vetted installer network or an in-house crew, plus monetizing expanded delivery, moves the business up the value chain from pure materials pass-through.
Expand the product line into adjacent high-margin categories. Outdoor lighting, firepits, drainage systems, and water features carry better margins than bulk stone and are natural add-ons for the existing contractor and homeowner base.
Build inventory discipline and purchasing analytics. With $700K of inventory and a seasonal sell-through, tightening reorder points and vendor terms frees working capital and reduces the carrying cost that quietly eats distribution margins.

Diligence notes

Scrutinize the real estate allocation and the rent add-back. Confirm the $2.7M real estate value with an independent appraisal and verify the $268K related-party rent reflects market rate, because if rent was above market the normalized operating SDE is lower than it appears.
Separate actual from projected in the 2026 numbers. The $829K SDE and the 31% gross margin rely on H2 projections, so demand monthly P&Ls and trailing-twelve-month data to confirm the margin expansion is real before paying a 6.27x multiple on a partly forecasted figure.
Pressure-test customer concentration in the contractor base. Repeat accounts are a strength only if no single contractor or small group drives a large share of revenue, so request a customer-level revenue breakdown and churn history across seasons.
Assess inventory quality and seasonality cash needs. Confirm the $700K of inventory is current and salable, not aged or obsolete stone, and model the working capital swing required to restock ahead of the heavy second-half selling season.
Evaluate vendor and manufacturer relationships. The business leans on long-standing manufacturer relationships for product and margin, so verify these agreements are transferable, assess rebate structures, and understand exposure if a key supplier changes terms post-sale.
Review the team and owner dependence. With retirement as the exit reason, confirm the yard manager and sales staff will stay, document how much of the contractor relationships run through the owner personally, and secure transition terms before close.

Source

Originally listed on BizBuySell. View original listing →