National Stone Installation Contractor, 30-Year Indiana Specialty Contractor

$3.6M

Revenue

$638K

SDE

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Full Editorial Writeup

This is a specialty stone installation contractor with a 30-plus year track record installing granite, limestone, and marble on landmark public and institutional projects. Headquartered in the Midwest (Indiana), the firm serves general contractors, public development commissions, landscape architecture firms, and federal government agencies across 12-plus states. Its portfolio spans public plazas, waterfronts, high-rise facades, parks, fountains, and memorials, with individual project contracts running from $150,000 to $3 million.

The business trailed at roughly $3.57 million in revenue with $637,804 in cash flow, though the seller projects a step-change to $5.9 million revenue and $1.72 million cash flow in 2026 on the back of margin expansion and a fuller backlog. Management reports approximately $10.7 million in signed, contracted work for 2026-2027, an active pipeline of roughly $9 million in additional potential work, near-zero debt, and a working capital position of $1.0 to $1.2 million. A top-tier federal contractor safety rating and elite pre-qualification status are positioned as a durable source of inbound government work.

The headline story is a margin transformation: blended gross margins have reportedly moved from a historical ~18% to a current target of ~40%, with net margins climbing from ~11% to ~20%. If real and sustainable, that is the difference between a break-even project shop and a genuinely valuable cash-flow business. The entire diligence exercise hinges on whether that margin jump is structural or a favorable read on a couple of good contracts.

Why we like it

Forward visibility is unusually strong for a project-based contractor, with roughly $10.7 million in signed work across 2026-2027 plus a ~$9 million active pipeline. That backlog materially de-risks the near-term revenue picture and supports the case that trailing cash flow understates the run-rate. For a buyer, contracted work in hand is worth more than a promising sales funnel.
The federal contractor pre-qualification and top-tier safety rating are real barriers to entry. Government stone work on plazas, memorials, and public facades is relationship-heavy and bonding-heavy, and a 30-year track record with agencies is not something a new entrant can replicate quickly. That moat is what protects the margins the seller is claiming.
The margin expansion story, if verified, is compelling: gross margins reportedly moving from ~18% to ~40% and net from ~11% to ~20%. That reflects genuine pricing power through longstanding supplier and buyer relationships rather than volume alone. A business that can raise prices without losing anchor customers is a fundamentally better business than the trailing numbers suggest.
Near-zero debt and $1.0 to $1.2 million in working capital give a buyer a clean balance sheet to underwrite against. Specialty contractors often carry heavy leverage and thin cash; this one funds its own project cycle. That reduces the financing burden and the risk of a cash crunch mid-project.

How to improve it

Pressure-test and then institutionalize the margin gains. Build a project-level margin dashboard so pricing discipline survives the founder's exit, and lock in supplier pricing agreements in writing so the ~40% gross margin is not dependent on informal relationships that could walk with the seller.
Systematize the federal pre-qualification and bonding capacity into a repeatable business-development engine. The listing flags untapped government agencies and regions, so hire or assign a dedicated capture manager to pursue GSA schedules, agency set-asides, and adjacent public owners rather than relying on inbound relationships.
Diversify the customer base to reduce project-concentration risk. With contracts running up to $3 million, a single large job can swing a year, so widen the roster of general contractors and design firms and target a mix of smaller recurring-style maintenance and restoration contracts to smooth revenue.
Formalize succession for the field and estimating leadership. Stone installation quality and bid accuracy live in a few key people; document estimating assumptions, create a foreman training track, and put retention agreements in place so the operational knowledge does not evaporate post-close.
Build a restoration and maintenance service line off the installed base. Every plaza, fountain, and memorial the firm has built is a future repair and refurbishment customer, which would layer genuinely recurring, higher-margin revenue on top of the lumpy new-build project work.
Tighten working capital and progress-billing discipline. On $150k to $3 million contracts, milestone billing, retainage recovery, and receivables management materially affect cash conversion, so implement rigorous billing cadence to free up cash currently tied in projects.

Diligence notes

The margin claim is the whole deal. Trailing cash flow is $637,804 on $3.57 million revenue, yet 2026 is budgeted at $1.72 million cash flow on $5.9 million revenue, which nearly triples earnings. Demand three to five years of project-level P&Ls to determine whether the ~18% to ~40% gross margin jump is structural or the product of one or two unusually profitable contracts.
Scrutinize the $10.7 million backlog and $9 million pipeline. Get the actual signed contracts, confirm they are firm-fixed or clearly defined scope, check for cancellation and change-order terms, and separate truly contracted work from speculative pipeline. Backlog that can be repriced or walked away from is not the same as revenue.
Interrogate the 80% recurring revenue claim carefully. Stone installation is project-based, not subscription or route-based, so what the seller calls recurring is really repeat relationship-driven bidding. Quantify how much revenue actually recurs from the same customers year over year versus how much must be re-won on each new project.
Verify the federal pre-qualification, bonding capacity, and safety rating in writing. These are the moat, so confirm the specific agency qualifications, current bonding limits, and safety ratings are transferable to a new owner and will not lapse or require re-qualification upon a change of control.
Assess key-person and labor dependency. A 30-year founder-led contractor often carries relationships, estimating judgment, and skilled installation crews that are hard to replace; understand who holds the customer relationships, whether the crews are employees or subcontractors, and what happens to bidding accuracy without the founder.

Source

Originally listed on BusinessBroker.net. View original listing →