Montana Plumbing Contractor, 20-Year Residential & Commercial Service Business

$1.6M

Revenue

$575K

SDE

2.6x

Multiple

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Full Editorial Writeup

This is a 20-year-old plumbing contractor operating across a growing region of Montana, serving both residential and commercial customers. The business runs lean with five full-time employees including the owner, and sits on a database of thousands of past clients plus a strong local reputation built over two decades. On $1.6M in revenue it throws off $575K in cash flow, a 36% margin that is healthy for a trades business and reflects a tight, owner-involved operation.

The economics are the headline. At a $1,495,000 ask against $575K of cash flow, you are paying roughly 2.6x, and $435K of that price is FF&E, meaning you are acquiring a meaningful hard-asset base plus the goodwill and customer book. The facility is leased at $36K annually, so there is no real estate to finance and no inflated multiple hiding a building.

The catch, and it is the central diligence item, is the license. Montana requires a Master Plumber, and the current owner holds it. A buyer must either carry that license personally or retain a licensed professional to replace the departing owner. That single dependency determines whether this is a clean acquisition or a business you cannot legally operate on day one.

Why we like it

Earnings quality is strong for the trade: $575K of cash flow on $1.6M of revenue is a 36% margin, well above typical residential plumbing comps. Twenty years of operation and a client database in the thousands means most of this came from repeat and referral demand rather than paid acquisition.
Plumbing is as close to recession-proof as home services gets. Water heaters fail, pipes burst, and code-required commercial work does not pause in a downturn, so demand is non-discretionary and non-deferrable. This is durable, boring cash flow that compounds regardless of the macro cycle.
The market tailwind is real and specific. The listing cites multiple multi-million-dollar new-construction projects in progress or planned and an existing backlog the seller believes could double top-line revenue with more technicians. That is organic growth you can fund from cash flow rather than acquisition.
The deal is capital-light and clean. The $1.495M ask includes $435K of FF&E, the facility is leased rather than bought, and at 2.6x this is priced reasonably for a 20-year trades business. The operator advantage is obvious: hire techs against the existing backlog and the margin profile does the rest.

How to improve it

Lock down the Master Plumber license before close and build redundancy after. Either secure your own license path or hire and retain a second licensed professional so the business is never one person away from being unable to operate. This is the first 90-day priority and the single biggest value protector.
Launch maintenance service agreements immediately to convert one-off jobs into recurring revenue. With thousands of past clients in the database, a tune-up and inspection membership could be sold to the existing base at near-zero acquisition cost, smoothing cash flow and raising the exit multiple.
Hire against the stated backlog. The seller believes revenue can double with more technicians, so the constraint is labor, not demand. Recruit and onboard two to three techs in the first six months and measure revenue per tech to validate the doubling thesis.
Pursue the commercial new-construction pipeline directly. The region has multiple multi-million-dollar projects planned, so build relationships with the general contractors and developers driving them to secure rough-in and fixture contracts ahead of competitors.
Mine the client database with a structured reactivation campaign. Email and direct mail to thousands of past customers for annual water-heater, backflow, and inspection services can generate near-immediate revenue from already-trusting buyers.
Add complementary services like water treatment or HVAC to raise ticket size and share overhead. Cross-selling into the existing customer base is cheaper than winning new logos and increases lifetime value per household.
Modernize the front end with online scheduling and basic digital marketing. A 20-year local business often runs on word of mouth alone, and a professional booking system plus local SEO can capture demand that currently leaks to competitors.

Diligence notes

The license dependency is the whole deal. Confirm Montana's exact Master Plumber requirements, how long licensure takes, and whether any current employee already holds or can obtain it. If the only license holder is the departing owner and no viable replacement exists, the business is unworkable regardless of the financials.
Verify the cash flow quality and owner add-backs. On a five-person shop where the owner is also the licensed tradesman doing billable work, confirm how much of the $575K reflects the owner's labor that a hired replacement would have to be paid to do. Normalize earnings for a true Master Plumber salary.
Scrutinize the backlog and the doubling claim. Ask for signed contracts, deposits, and the actual dollar value of work in progress versus merely planned projects. Tie the growth thesis to documented commitments, not optimism about regional construction.
Assess revenue concentration and mix. Determine the split between residential service, commercial, and new construction, and whether any single builder or commercial account represents an outsized share that could vanish on transition.
Review the lease terms and facility fit. Confirm the $36K annual lease length, renewal options, and whether 2,000 sq. ft. is adequate if you hire additional technicians and vehicles to pursue the growth plan.
Inventory and value the $435K of FF&E independently. Confirm the trucks, equipment, and tooling are owned free and clear, in working condition, and that the stated value is realistic rather than book or wishful pricing.

Source

Originally listed on BizBuySell. View original listing →