Outside Plant Utility Construction, 1981 Central Texas Telecom Contractor

$3.0M

Revenue

$534K

SDE

Subscribe Free

Read the full deal writeup

Get Free Access Access Unlimited Deals

Already a member? Sign in

Full Editorial Writeup

This is a privately-owned outside plant utility construction company operating in Central Texas since 1981. The core services are aerial cable installation and underground cable installation, primarily serving the telecommunications market, with additional work in waterlines. The business runs on roughly $3M in revenue and $534K in EBITDA, giving it a healthy mid-teens margin for a field construction services operation, and it employs 24 people out of a 5,000 square foot office.

What stands out is the customer profile. The company serves 10-plus active accounts with a stated 98% repeat business rate, which for a utility construction contractor usually means ongoing master service agreements and continuous buildout and maintenance work with a small number of telecom and municipal clients. That is the kind of sticky, work-order-driven revenue that behaves more like a route than a project shop, even though it is nominally construction.

For a buyer, this is a boring, essential infrastructure business. Telecom carriers and municipalities keep spending on fiber, cable, and waterline work through cycles, and the 43-year operating history plus an experienced management team suggests the business is not dependent on the owner swinging a shovel. The risk is squarely in customer concentration, which the diligence process has to resolve before anyone writes a check.

Why we like it

Earnings quality is solid for the category: $534K EBITDA on $3M revenue is a mid-teens margin, which is strong for field construction where single digits are common. The 98% repeat business rate implies the revenue is recurring work-order volume rather than one-off project wins, making the earnings more predictable than a typical GC.
Durability and moat come from 43 years of operating history and deep client relationships in a licensed, relationship-heavy trade. Outside plant utility work requires specialized crews, equipment, safety records, and carrier prequalification that new entrants cannot replicate overnight, which protects the installed account base.
Market tailwinds are real and multi-year. Fiber expansion, rural broadband funding, and waterline infrastructure spend are all structurally funded and continue through downturns because telecom carriers and municipalities treat this as essential capex, not discretionary.
Operator advantage is built in: the listing describes a strong, experienced management team and 24 employees, so the business is not a one-man show. A buyer can step into an existing crew structure and focus on bidding more work rather than rebuilding operations from scratch.

How to improve it

Attack customer concentration immediately by quantifying revenue per account and building a pipeline to add new carrier and municipal clients. With only 10-plus active accounts, winning even two or three new master service agreements materially de-risks the business and supports a higher exit multiple.
Execute the listing's own growth levers: a focused marketing campaign and new pricing strategy. Many legacy contractors underprice because the owner has not adjusted rates in years, so a disciplined pricing review on renewal work can drop straight to EBITDA.
Geographic expansion beyond Central Texas is the obvious scale play. The same crews, equipment, and prequalifications can bid adjacent metros, and telecom buildout demand is statewide, so adding territories leverages existing overhead.
Expand the service mix into higher-margin adjacencies like fiber splicing, directional boring, and ongoing maintenance contracts. These deepen wallet share with existing accounts and convert project revenue into steadier recurring maintenance streams.
Tighten equipment utilization and job costing. In OSP construction, margin lives or dies on crew productivity and fleet downtime, so implementing basic job-level profitability tracking often surfaces 2 to 4 points of margin that the prior owner never measured.
Build a formal estimating and bidding function to increase bid volume and win rate. If the owner personally bids most jobs, systematizing that process with a dedicated estimator unlocks capacity to pursue more work without proportionally adding overhead.

Diligence notes

Customer concentration is the single biggest risk. Get revenue by account for the last three years: if one or two telecom clients drive the majority of the $3M, the 98% repeat rate is a double-edged sword and pricing or terms on the deal should reflect that fragility.
Verify the nature of the EBITDA and whether it is owner-adjusted. Cash flow (SDE) is listed as not disclosed, so confirm what add-backs were taken, whether owner compensation is normalized, and what a replacement GM would cost if the owner is still bidding and running jobs.
Scrutinize the contract structure behind the repeat business. Determine whether revenue flows from binding master service agreements with committed volumes or from informal preferred-vendor relationships that can walk, because that distinction drives both durability and financeability.
Review the equipment fleet condition, ownership, and deferred capex. OSP work is equipment-intensive, and a seller showing strong EBITDA while running aged, undercapitalized trucks and boring rigs is effectively borrowing from future maintenance spend.
Assess crew dependency and labor availability. With 24 employees in a skilled trade, confirm key foremen and crew leads are staying, review licensing and safety/EMR history, and understand the local labor market for replacing linemen and operators.

Source

Originally listed on BizBuySell. View original listing →