Phoenix SPF Roofing Contractor, 50-Year Commercial & Residential Operator

$5.1M

Revenue

$1.0M

SDE

2.9x

Multiple

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Full Editorial Writeup

This is a full-service roofing contractor serving commercial, industrial, and residential customers across the greater Phoenix metro. The deal packages two commonly owned brands into one acquisition: a legacy company founded in 1972 with more than fifty years in market, and a sister brand established in 1997. Both operate from a single shared facility under common ownership. The defining specialty is spray-applied polyurethane foam (SPF) roofing for flat and low-slope structures, which is the dominant roof type across the desert Southwest.

The SPF model is the reason this listing is more interesting than a typical roofing job shop. The proprietary foam system creates a continuous, self-flashing membrane that can be renewed with periodic recoats rather than fully replaced. That converts one-time installs into a maintenance annuity, extending roof life for the customer while generating follow-on recoat work for the company. Around this core the business installs elastomeric coatings, concrete and sand-cast tile, asphalt shingles, and subterranean waterproofing across both new construction and reroof work.

The company positions on quality, technical expertise, and warranty-backed reliability rather than price. It holds state contractor licensing for each entity, belongs to the state roofing association, carries an A+ BBB rating, and its systems hold third-party approvals for demanding institutional applications. At $5.05m revenue and roughly $1.02m of owner cash flow, the 2.93x asking multiple sits in a reasonable band for a durable, long-tenured trades business, and the twenty-year-plus project database is an underexploited asset.

Why we like it

Earnings quality is solid for a trades business, with $1.02m of cash flow on $5.05m revenue for roughly 20 percent owner margin, plus $774k of stated EBITDA. The 2.93x multiple is grounded, and $800k of FF&E is included in the price, meaning a meaningful share of the purchase transfers hard assets rather than pure goodwill.
The SPF recoat model is a genuine moat within roofing. Because foam roofs are renewed rather than replaced, every install seeds a future maintenance relationship, and a 45-year multi-field project database gives the buyer a ready map of expiring warranties to mine for contracted recoat revenue.
Phoenix is a structural tailwind. A 5m-plus MSA that keeps building, combined with a desert climate where flat low-slope foam roofing is the predominant construction type, means both new-construction demand and a large installed base needing recoats sit in the company's home market.
The operator upside is unusually clean because the prior owners never advertised and grew purely on referral. A buyer can layer a marketing engine and proactive database outreach onto an already-profitable base rather than fixing broken operations, which is the ideal setup for a hands-on acquirer.

How to improve it

Activate the project database immediately. Pull every install with an expiring or expired warranty and run a structured recoat and maintenance outreach campaign, converting the installed base into contracted, higher-margin recurring revenue within the first two quarters.
Build the marketing function the sellers never had. Stand up a real digital presence, local search visibility, Google Business optimization, and vehicle branding so the business captures the growing share of commercial buyers who source contractors online rather than by referral.
Formalize recoat and maintenance service agreements. Package periodic foam recoats into multi-year contracts with scheduled inspections, turning episodic follow-on work into predictable annual revenue that also raises the exit multiple for the next buyer.
Resolve the licensure and qualifying-party dependency early. Roofing entities live and die by their contractor license, so lock down the qualifying-party succession during the seller transition and cross-train or hire a backup qualifier to remove single-person key-man risk.
Push margin on new construction versus reroof mix. Analyze job-level profitability across the two brands and steer bidding toward the highest-margin SPF and coating work, using the technical and warranty positioning to defend price rather than chase low-margin volume.
Negotiate the facility lease before close. The property is retained by the seller in a separate LLC at $7,500 per month with a lease expiring 01/01/2030, so secure a longer term with defined escalators to protect against rent shock and preserve the 2.6-acre site with expansion room.
Institutionalize the twenty employees and culture. Document estimating, crew, and safety procedures so the quality-focused reputation survives ownership transfer, and add incentive structures that retain the loyal crew who represent much of the intangible value.

Diligence notes

Reconcile the two-entity structure. Confirm how revenue, cash flow, and $1.02m SDE split between Company A and Company B, verify there are no inter-company adjustments inflating combined results, and ensure both brands and their licenses transfer cleanly in a single deal.
Scrutinize warranty liabilities. The SPF model carries multi-year warranty obligations, so quantify outstanding warranty exposure, historical claim and callback costs, and whether reserves are adequate before assuming the recoat annuity is pure upside.
Validate the recurring recoat revenue claim. Ask for the actual split of revenue between one-time new construction, reroof projects, and repeat recoat or maintenance work, since the durability thesis depends heavily on how large and contracted that recurring base really is.
Confirm the FF&E and equipment value. Inspect the $800k of equipment and any vehicle fleet to verify condition, ownership free and clear, and remaining useful life, since a large portion of the purchase price is attributed to these hard assets.
Assess customer and project concentration. Review the top accounts and the backlog to ensure no single commercial or institutional client dominates revenue, and evaluate how much of the pipeline is contracted versus dependent on the sellers' personal relationships.
Verify licensing continuity risk. Understand exactly which individual holds the qualifying-party status for each entity, the timeline and requirements to transfer or re-qualify, and any gap period that could halt bidding or operations post-close.

Source

Originally listed on BizBuySell. View original listing →