Heavy Civil Construction Contractor, 18-Year California SB/HUB Zone Firm

$23.8M

Revenue

$4.0M

SDE

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Full Editorial Writeup

This is a heavy civil construction contractor operating in California since 2006, focused on large-scale infrastructure work including highways, bridges, and tunnels. The firm serves both public and private clients and has built its position on a track record of delivering projects on time and on budget. It holds A-General Engineering and B-General Building licenses, runs non-union, and carries SB/SMB and HUB Zone certifications at both the state and federal levels, with all revenue generated under that small-business status. On roughly $23.8M of revenue it throws off about $4.0M of adjusted EBITDA, a 17% margin that is healthy for the heavy civil space.

The most valuable asset here may be relationships rather than equipment. The company has maintained a 17+ year relationship with a major government works entity, which anchors revenue continuity and speaks to bonding capacity and reliable execution. The small-business and HUB Zone certifications create a structural advantage in public bidding, effectively narrowing the competitive field on set-aside contracts. That said, those certifications are tied to size and ownership status, so a large strategic acquirer could inadvertently disqualify the entity from the very work that drives its numbers.

The business runs with 50 employees and a strong management team, and the sellers, who are retiring, will stay on for a negotiated transition. The sale runs as an open-bid process with a hard gate: buyers must show heavy civil experience and at least $5M in liquid capital, plus appropriate licenses, bonding, and insurance. Real estate (a quarter-acre lot with a building, valued around $1.99M) is available for sale or long-term lease but is not included in the asking price. Seller financing is available for a qualified buyer.

Why we like it

Earnings quality is real and substantial: roughly $4.0M of adjusted EBITDA on $23.8M of revenue is a 17% margin, and the cash flow is backed by executed public and private infrastructure contracts rather than speculative pipeline. Note the EBITDA is adjusted, so the quality of those adjustments is the first thing to underwrite.
The moat is regulatory and relational, which is rare in construction. SB/SMB and HUB Zone certifications wall off a slice of public bidding, and a 17+ year relationship with a major government works entity provides continuity, bonding credibility, and repeat award history that a new entrant cannot replicate quickly.
Market tailwinds favor this work: heavy civil infrastructure spending in the US remains strong into 2026, and California highway, bridge, and tunnel budgets are durable across economic cycles. The listing also flags LA fire rebuild participation as incremental demand.
Operator advantage is built in: 50 employees, an existing strong management team, and retiring sellers willing to stay through a negotiated transition mean the business is not a founder-dependent shop. A qualified operator can step in without rebuilding the org chart.

How to improve it

Immediately pressure-test the certification structure before close. Model whether the SB/SMB and HUB Zone status survives the ownership change, because all revenue is generated under that status and losing it would gut the bid pipeline. Structure the acquisition (holding entity, ownership percentages, size standards) to preserve eligibility.
Diversify the government customer concentration. A single 17+ year relationship with one major government works entity is both an asset and a single point of failure. In the first 90 days, map current backlog by client and begin bidding adjacent agencies and private work to reduce dependence on one payer.
Formalize bonding capacity and banking relationships early. Heavy civil is bonding-constrained, so lock in surety lines under the new ownership before they expire, and use the retained management team's track record to negotiate higher single-project and aggregate limits to chase larger awards.
Scrutinize and standardize the EBITDA adjustments, then rebuild a clean run-rate P&L. Convert the adjusted figure into a defensible normalized number for lender and surety conversations, which strengthens both financing terms and future bid competitiveness.
Evaluate the real estate decision deliberately. The quarter-acre yard and building are available to buy (around $1.99M) or lease long-term. Decide whether owning the yard improves logistics and locks occupancy cost, or whether leasing preserves capital for equipment and bonding.
Capture the LA fire rebuild and captive insurance opportunities the seller flagged. Assign a management lead to pursue disaster recovery infrastructure work in the first quarter, and evaluate the captive insurance structure for real cost savings on the company's substantial liability and workers comp exposure.
Build a project margin dashboard by job type. Highways, bridges, and tunnels carry very different risk and margin profiles, so instrument the estimating and job-costing system to steer future bids toward the highest-margin categories rather than chasing top-line revenue.

Diligence notes

Verify the adjusted EBITDA line by line. The listing explicitly states the $4.0M figure is adjusted, so obtain three to five years of tax returns and financials, and confirm each add-back is legitimate and non-recurring rather than masking real operating costs.
Confirm certification transferability and revenue dependence. Since all revenue flows through SB/SMB and HUB Zone status, get written confirmation of how much backlog and historical award volume depends on set-aside eligibility and whether a change of control triggers recertification or disqualification.
Analyze customer and contract concentration in detail. Quantify what share of revenue and gross profit comes from the single major government works entity, review contract terms, renewal mechanics, and whether the relationship is contractual or bid-by-bid.
Examine backlog quality and bonding capacity. Request the current signed backlog, work-in-progress schedule, and surety bonding limits, because a heavy civil firm's future is only as good as its committed pipeline and its ability to bond larger jobs.
Review the workforce and management retention risk. With 50 employees and non-union status, confirm key project managers and estimators are under retention agreements, and understand which relationships and licenses are personal to the retiring sellers versus institutional.
Clarify the open-bid process and real estate terms. Understand how offers are evaluated, what liquidity and experience proof is required, and negotiate the buy-versus-lease decision on the roughly $1.99M yard and building since it sits outside the asking price.

Source

Originally listed on BizBuySell. View original listing →