Read the full deal writeup
Sign up for a free Accredited account to read the editorial writeup, financials, and broker contact for this deal.
Full Editorial Writeup
This is an 18-year-old horizontal directional drilling (HDD) and underground utility contractor based in Southwest Louisiana, with crews working across Louisiana and Texas. The company installs, rehabilitates, and maintains underground infrastructure for communication, fiber-optic, water, sewer, gas, and pipeline projects, running roughly 50 employees and a fleet of drilling rigs. It does about $16M in average annual revenue at a seller-reported $3.2M adjusted EBITDA, a 20% margin, and had already booked $11.23M in revenue through late September 2026.
The revenue base is heavily tied to oil and gas, with 80 to 90% of work coming from pipeline construction contractors and the remaining 10 to 20% from municipal utility projects. About 30% of revenue is rehabilitation and maintenance, which is stickier and less tied to new-build capital cycles than greenfield drilling. The seller reports demand currently exceeds the company's operating capacity, which is a good problem but also a signal the business is constrained by rigs, crews, and working capital rather than by sales.
The asking price is $15M against $3.2M EBITDA, a 4.69x multiple, and the seller estimates the equipment base alone at $15M to $20M. That framing matters: a large portion of the enterprise value here is hard iron, not pure cash-flow goodwill. The opportunity is a retirement sale of a regionally established infrastructure platform suitable for a strategic acquirer rolling up utility construction or a financial buyer seeking exposure to underground infrastructure spend.
Why we like it
- At 4.69x $3.2M EBITDA, roughly 80% of revenue is recurring from pipeline construction contractor relationships built over 18 years, and the seller says demand exceeds capacity. A 20% EBITDA margin on $16M of heavy-construction revenue is healthy for the space, and the business is pacing ahead of plan with $11.23M booked through late September 2026.
- HDD is a specialized, licensed, capital-intensive trade with real barriers to entry. The seller estimates $15M to $20M of equipment, 50 trained employees, and established crews, which is not something a competitor spins up quickly. The roughly 30% of revenue from rehabilitation and maintenance adds a more durable, repeat-oriented layer beneath the lumpier new-build work.
- Fiber, communication, water, sewer, and gas infrastructure all sit in multi-year investment cycles driven by broadband buildout, aging utility replacement, and pipeline integrity spending. The business already spans both oil-and-gas and municipal utility work, giving a new owner two distinct demand pools to lean into.
- This is capacity-constrained, meaning the growth path is operational, not sales-driven. An operator who adds rigs, crews, and working capital can convert existing unmet demand into revenue without having to win a market from scratch, and the seller is offering financing and exiting for retirement, which supports clean deal structuring.
How to improve it
- Quantify and prioritize the backlog the seller says exceeds capacity. In the first 90 days, map every job currently turned away or delayed, then model the incremental EBITDA from adding one to two drilling rigs and crews against the capital outlay to confirm the expansion thesis is real, not aspirational.
- Shift the revenue mix toward the stickier 10 to 20% municipal and the 30% rehab/maintenance segments. These are less cyclical than oil-and-gas new-build, carry steadier margins, and reduce the customer concentration risk of leaning on a handful of major pipeline contractors.
- Build a formal preventive maintenance and fleet-management program for the $15M to $20M equipment base. Tracking utilization, downtime, and replacement timing protects margins, extends asset life, and gives you hard data to defend the equipment valuation that underpins a chunk of the purchase price.
- Institutionalize customer relationships before the owner leaves. If demand and bookings run through the seller's personal ties to pipeline contractors, build a documented account-management process and contractual master service agreements so revenue survives the retirement transition.
- Pursue larger and multi-year infrastructure contracts, especially federally and state-funded fiber and water/sewer work. The crews and equipment already qualify the company for bigger jobs; a dedicated estimator and business development hire could move it up the project-size ladder.
- Tighten working capital and billing cycles. Heavy construction ties up cash in receivables and WIP, so implementing disciplined progress billing, retainage recovery, and collections will free capital that can fund the rig expansion rather than requiring outside financing.
- Diversify beyond the 80 to 90% oil-and-gas dependency over 24 to 36 months. Regulatory shifts, commodity prices, and pipeline capex cuts all hit this concentration hard, so deliberately growing fiber and municipal share de-risks the cash flow and improves the eventual resale multiple.
Diligence notes
- Scrutinize the oil-and-gas concentration and the specific customers behind 80 to 90% of revenue. Request a customer-by-customer revenue breakdown for three years, because loss of one or two major pipeline contractors could materially impair the business given how concentrated the demand appears to be.
- Validate the seller-reported $3.2M adjusted EBITDA and the equipment valuation independently. Get audited or reviewed financials, a detailed add-back schedule, and a third-party appraisal of the fleet, since both the margin and the $15M to $20M equipment estimate are seller-reported and drive the entire valuation.
- Examine the backlog and the 2026 run-rate closely. The business booked $11.23M through September 29, 2026, so confirm whether that pace is a genuine step-up or front-loaded, and verify how much of the pipeline is contracted versus expected, given that oil-and-gas work can be lumpy.
- Assess the capital expenditure and maintenance burden of the fleet. Heavy equipment depreciates and needs replacement, so review the age, condition, and remaining life of each rig, plus historical capex, to understand true free cash flow after the EBITDA that an equipment-heavy business reports.
- Confirm licensing, bonding, safety record, and key-crew retention. HDD requires skilled operators and clean safety and compliance history to keep bidding on utility and pipeline work, so review EMR ratings, bonding capacity, and whether crews and supervisors will stay post-retirement.
- Clarify what is actually included in the $15M asking price and the seller financing terms. Determine whether real estate, yards, or facilities are part of the deal or separate, and nail down the financing structure, since the price sits well above the standalone cash-flow value and leans on the hard-asset base.
Source
- Established CT Survey & Civil Engineering Firm, 100-Year New Haven County Practice
- Nationwide Contracting Distribution & Service Co - Multi-Service Construction Platform
- MEP & Fire Protection Engineering Firm, 2006 Manhattan Consultancy
- Greater Boston Academic Facilities Contractor, 40-Year Massachusetts Renovation & Millwork Firm
- Multi-Trade Facility Contractor, National Account MSAs, Maryland
- Established Electrical Contractor, 10+ Year Eastern Massachusetts Commercial Specialist
Want the full analysis on every deal? Unlock the complete platform with Accredited Pro to screen live listings and read our operator-level writeups.