Long-Established Texas Commercial Electrical Contractor

$10.0M

Revenue

$875K

SDE

5.4x

Multiple

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Full Editorial Writeup

This is a full-service commercial electrical contractor in Texas, established in 2004, with a roster of 49 full-time employees spanning field electricians to administrative staff. The company has built its book primarily in the commercial sector, focused on ground-up construction projects, while also serving private-sector clients and local municipalities. All licensing and operating infrastructure are in place, and the seller positions the business as turnkey for a new owner who does not need to be a licensed electrician personally.

At $10M in revenue and $875K in cash flow, this is a meaningful regional contractor rather than a one-truck shop. The 8.75% cash flow margin is on the thin side for trades, which is typical of ground-up commercial electrical work where labor and material pass-throughs compress margins versus service-and-repair work. The asking price of $4.7M implies a 5.37x cash flow multiple, which is rich for a labor-heavy contractor unless the backlog, contracts, and management depth justify it.

The seller is retiring and offering attractive structured financing: $2M down with $2.7M carried at 9% over 36 months. That seller note is roughly 57% of the purchase price, which signals confidence in the cash flow and gives a buyer real downside protection if earnings hold. For a strategic buyer in an adjacent trade or a platform rolling up Texas electrical contractors, this is a credible bolt-on with established licensing and crews already in place.

Why we like it

Earnings quality rests on $875K of cash flow against $10M revenue from commercial and municipal work, which tends to be contract-backed and repeatable rather than one-off. Municipal and ground-up commercial projects are typically bid, documented, and paid through formal channels, giving cleaner provable earnings than residential service cash flow.
The moat here is licensing, a 49-person trained crew, and two decades of brand and relationship equity in the Texas market. Licensed master electricians and reliable field labor are the binding constraint in this trade right now, so an established crew with the licenses in place is genuinely hard to replicate from scratch.
Texas is one of the strongest construction markets in the country, with sustained commercial, industrial, and infrastructure spending driving electrical demand. Electrification trends, data centers, and ongoing ground-up commercial activity give this business structural tailwinds beyond any single economic cycle.
The seller financing structure is a major signal: $2.7M carried at 9% over 36 months means the seller has skin in the game and believes the cash flow services that note comfortably. A buyer puts $2M down to control a $10M revenue business, and the carried paper de-risks the deal materially.
The business is positioned as turnkey for a non-electrician owner, with full infrastructure and a seller willing to train. That broadens the buyer pool to financial operators and adjacent-trade consolidators, not just licensed contractors, which supports both entry value and eventual resale.

How to improve it

Audit project margins by job type within the first 90 days to separate higher-margin service and tenant-improvement work from low-margin ground-up bids. Shifting mix toward service, maintenance, and repair contracts can lift the 8.75% cash flow margin meaningfully without adding revenue.
Build a recurring service and maintenance arm on top of the construction base, targeting the commercial clients already served on ground-up jobs. Recurring maintenance agreements smooth revenue, raise margins, and increase the eventual exit multiple versus pure project work.
Tighten estimating and change-order discipline, since ground-up commercial electrical bleeds margin through underbid jobs and uncaptured scope changes. Even a modest improvement in change-order capture and bid accuracy flows almost entirely to the bottom line.
Implement or upgrade job-costing and scheduling software to improve crew utilization across 49 employees. Labor is the single largest cost in this business, so a few points of utilization improvement directly expands cash flow.
Develop a documented succession plan for the licensed master electricians whose credentials the company operates under. Cross-training and securing additional licensed personnel reduces single-point-of-failure risk and protects the value of the asset.
Pursue higher-margin specialty niches such as data center electrical, EV charging infrastructure, or industrial controls where Texas demand is surging. These segments command premium pricing and differentiate the firm from commodity ground-up competitors.
Formalize a sales and business development function rather than relying on legacy relationships from the retiring owner. Replacing owner-driven relationships with a repeatable pipeline is essential to protecting revenue through the ownership transition.

Diligence notes

Scrutinize customer and project concentration, since ground-up commercial work can hinge on a few large general contractors or developers. Loss of one or two key GC relationships post-sale could swing the $875K cash flow dramatically.
Verify the licensing structure and confirm exactly whose master electrician license the company operates under and whether that person stays after the sale. If the licensing runs through the retiring owner, securing a qualified replacement is a deal-critical contingency.
Examine work-in-progress, backlog, and signed contracts to confirm the $10M revenue is forward-looking and not a trailing peak. Construction revenue is lumpy, so a single strong year of ground-up projects can overstate sustainable run-rate.
Reconcile the $875K cash flow to tax returns and bank statements, and identify which owner add-backs are included given the retirement sale. Confirm the FF&E ($650K) and inventory ($200K) are genuinely current and usable rather than aging assets padding the price.
Review aged receivables and the working capital cycle, which can be brutal in commercial construction due to slow GC payments and retainage holdbacks. Understand how much working capital a buyer must inject to fund operations after closing.
Test the depth of the management bench and field supervision below the owner, since a non-electrician buyer is fully dependent on existing leadership. Identify the key project managers and superintendents and confirm their intent to stay through and beyond the transition.

Source

Originally listed on BizBuySell. View original listing →