Multi-Trade Commercial Plumbing & Mechanical Contractor, 20-Year Detroit Operator

$5.4M

Revenue

$1.3M

SDE

5.3x

Multiple

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Full Editorial Writeup

This is a 20-year-old commercial plumbing and mechanical contractor serving Southeast Michigan out of a leased shop in Livonia. The company self-performs across an unusually broad trade mix: commercial plumbing, HVAC, boilers and chillers, electrical, hydro-jet sewer cleaning, standby generators, and commercial pool construction and service. That one-call, multi-trade capability is the whole thesis, because very few competitors can deliver plumbing, HVAC, electrical, and aquatics under a single roof, and fewer still can build and service commercial pools.

The customer base is sticky and institutional: federal government facilities, national restaurant, retail and fitness chains, multifamily housing, hospitality, and institutional accounts, with more than 200 accounts served in the trailing twelve months. More than 20% of revenue (over $1M) is recurring or repeat service work, including daily national-account service calls, and the company carries a $1.5M backlog plus another $1.5M in pipeline. A $5M insurance program and bonding capacity qualify it for larger commercial and government jobs that undercapitalized single-trade shops cannot touch.

What makes this notable is the growth trajectory and the clean handoff. Revenue jumped from $2.3M in FY2024 to $5.4M TTM at a 21% adjusted EBITDA margin, all driven by referrals with zero advertising spend and no sales staff. A newly hired General Manager poached from a $15M competitor is staying on, as are the field Operations Manager and CFO, and the retiring owner will consult through an extended transition. For a buyer, that is a rare combination: proven demand, an installed management layer, and obvious underexploited growth levers.

Why we like it

Earnings quality is strong for a trades business, with $1.312M SDE and $1.162M EBITDA on $5.4M revenue at a 21% adjusted margin, well above typical single-trade contractor comps. The 62%+ plumbing and mechanical core plus service work gives a diversified revenue base rather than dependence on one project type. A $1.5M backlog and $1.5M pipeline provide near-term visibility into forward revenue.
The multi-trade, one-call model is a genuine moat in a fragmented market: single-trade shops cannot offer plumbing, HVAC, electrical, and aquatics together, and large regionals move slower with heavier overhead. The $5M insurance program and bonding capacity gate out smaller competitors from government and large commercial work. Customers who defected to cheaper vendors have returned to have work corrected, which is the clearest proof of pricing power.
Demand is recession-resistant because commercial facilities, federal buildings, multifamily, and national chains must keep plumbing, HVAC, boilers, and chillers running regardless of the cycle. Over 20% of revenue is recurring or repeat service, including daily national-account calls, which cushions any downturn. Essential mechanical maintenance is a cost businesses cannot defer for long.
The operator advantage is unusually clean: a GM poached from a $15M competitor is staying and targeting $7.5M by 2028, and the Operations Manager and CFO are also remaining. All historical growth came from referrals with no ad spend and no sales team, so a buyer inherits a business that has never been professionally marketed. That means the easiest growth lever, basic business development, is completely untouched.

How to improve it

Install a business development function and basic digital marketing on top of the all-referral base. The company has grown from $2.3M to $5.4M with zero advertising and no salespeople, so even a single BD hire plus a modern website and paid search could materially accelerate the pipeline. This is the lowest-cost, highest-certainty lever on the table.
Convert national-account and multifamily relationships into contracted recurring maintenance agreements. Today only 20% of revenue is recurring despite daily service calls into these accounts, so formalizing maintenance contracts would raise revenue predictability and lift the eventual exit multiple. Recurring contracts also smooth the lumpiness inherent in project-based mechanical work.
Add health benefits to speed technician hiring, which the listing flags as a current constraint. Labor is the binding capacity limit in trades, and a competitive benefits package would let the company staff up to clear backlog faster and bid more work. Faster hiring directly converts the existing $1.5M pipeline into booked revenue.
Grow the higher-margin service lines: standby generators, heat pumps, and energy retrofits. These are rising-demand categories tied to grid reliability and decarbonization incentives, and they command better margins than commodity plumbing. The company already has the trade licenses and crews to self-perform them.
Execute a disciplined geographic expansion into Ohio and adjacent Michigan markets where the company already does project work. Expanding an existing capability into known territory is far lower risk than greenfield entry. This extends the addressable market without diluting the multi-trade positioning.
Use the business as a tuck-in acquisition platform for single-trade shops in the region. Bolting on a plumbing-only or HVAC-only operator lets you cross-sell the full multi-trade stack into their book and strip duplicate overhead. At a 5.34x entry multiple, accretive tuck-ins bought cheaper would create immediate arbitrage value.

Diligence notes

Scrutinize the revenue jump from $2.3M in FY2024 to $5.4M TTM, because a 2.3x increase in roughly a year can reflect one or two large nonrepeating projects rather than durable base growth. Break out the TTM figure by customer and project to confirm how much is service versus one-time construction, especially within the under-20% pool construction line. Confirm the 21% margin holds on a normalized, recurring revenue base.
Verify the Michigan trade license situation before closing, since the listing explicitly warns the buyer must plan for license coverage. The retiring owner may personally hold the master licenses, and losing them without a qualified replacement would halt operations. Confirm which staying employees carry the required licenses and whether they transfer or must be re-qualified.
Validate the recurring revenue claim and account concentration across the 200+ accounts and the national chains. Determine what share of the $1M+ recurring revenue sits with a handful of national accounts and whether those relationships are contracted or informal. Government and national-chain work can carry slow payment terms, so review DSO and working capital carefully.
Stress-test the leadership continuity assumption, because the thesis leans heavily on a newly hired GM who just arrived from a competitor. Confirm the GM, Operations Manager, and CFO have signed retention or employment agreements and understand their comp expectations post-sale. A newly hired GM is unproven in this specific business, so quantify the key-person risk if any of them leave.
Review the fleet and bonding capacity in detail, since the ~20 vehicles including a crane/bucket truck and hydro-jet truck are a meaningful hard asset embedded in the price. Confirm the fleet is owned free and clear, assess remaining useful life and deferred maintenance, and verify the $5M insurance program and bonding lines survive a change of ownership. Bonding capacity often depends on the owner's personal guarantee and financials.
Examine the one-year lease with five renewal options to confirm the renewal terms, rent escalators, and whether the landlord has any consent right on a sale. The ~12,000 sq ft shop with outdoor storage is operationally central, and unfavorable renewal pricing or a relocation requirement could add real cost. Model the economics of staying versus consolidating.

Source

Originally listed on BizBuySell. View original listing →