Premium Tile & Stone Installation Firm, Delaware Mid-Atlantic Contractor

$6.3M

Revenue

$1.0M

SDE

3.4x

Multiple

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Full Editorial Writeup

This is a specialty tile and stone installation contractor operating across Delaware, Pennsylvania, and Maryland, serving a deliberately split client base: high-margin luxury residential projects on one side and prevailing-wage public-sector and institutional commercial accounts on the other. Revenue has grown to roughly $6.35M on CPA-reviewed financials, with cash flow of $1,025,000, giving the business a healthy mid-teens owner-earnings margin that is strong for a labor-intensive trade.

The real asset here is the workforce. Installation crews are CTEF-certified, a credential held by fewer than 2,000 tradespeople nationwide, and the company reports near-zero turnover among a team that takes years to develop. That skilled-labor moat, combined with roughly $2M single-project and $6M aggregate bonding capacity and the compliance infrastructure to perform prevailing-wage public work, puts the firm in a small group of contractors in the state qualified to chase government interiors and multi-unit developments.

Operationally the business runs with a seasoned in-house estimator handling the bid function and experienced field foremen running jobs with minimal oversight. The 45-year-old owner works at the strategic level (sales, finance, business development) rather than in the field, and is pursuing an early transition with either a clean exit and handover or a partnership with a strategic scaler. The facility is leased through 2037 with sub-market rent escalations capped at 3%, and no real estate conveys with the sale.

Why we like it

Earnings quality is solid for the trade: $1,025,000 of cash flow on $6.35M revenue is roughly a 16% margin, backed by CPA-reviewed financials rather than a shoebox of receipts. The public-sector mix provides pipeline depth and payment reliability that purely residential installers lack.
The moat is real and rare. CTEF-certified crews (fewer than 2,000 nationwide), near-zero turnover, and prevailing-wage qualification plus ~$2M/$6M bonding capacity create barriers a competitor would need years to replicate. A buyer is paying for a trained, bonded, compliant field organization, not just a brand.
Revenue is diversified across two very different demand curves: luxury residential and institutional/government commercial. When high-end remodels slow, public prevailing-wage work tends to hold, which smooths the cyclicality that usually makes construction scary.
The owner already sits above field operations, running sales and finance rather than swinging a trowel. That means a buyer inherits a functioning management layer with an in-house estimator and capable foremen, lowering the operational cliff risk that kills many owner-operator trade deals.

How to improve it

Formalize a recurring commercial maintenance and service line (grout restoration, repairs, warranty callbacks) to convert one-off installs into a repeat revenue stream. This reduces dependence on winning each new bid and smooths cash flow between large projects.
Push the bonding capacity harder. With $2M single and $6M aggregate already in place, pursue larger and more numerous public contracts, and work with the surety to expand limits as the backlog grows. Government backlog is the most defensible growth lever here.
Document and systematize the CTEF training pipeline so the skilled-labor moat scales rather than caps growth. Build an internal apprenticeship track to grow certified setters in-house, since talent availability, not demand, is the binding constraint on revenue.
Expand deliberately into adjacent Pennsylvania and Maryland prevailing-wage markets where the firm already operates but may be under-penetrated. Replicating the compliance and bonding playbook across state lines is cheaper than building it from scratch.
Tighten estimating and job-costing analytics to protect margin as volume scales. A single seasoned estimator is a key-person risk, so build a second estimator and a data-driven bid-win model before growing the top line further.
Negotiate volume pricing with tile and stone suppliers given the growth trajectory, and consider a small inventory/logistics function to reduce material lead times on institutional jobs. Better input costs flow straight to the 16% margin.

Diligence notes

Scrutinize revenue concentration and backlog. The pitch emphasizes winning some of the largest regional contracts, so confirm what percentage of the $6.35M comes from the top three customers or projects, and how much signed backlog carries into the next 12 months.
Verify the real cash flow quality. Cash flow is labeled SDE, so separate owner compensation from true discretionary earnings, and confirm whether the $1,025,000 is recurring or inflated by a handful of unusually large or non-repeatable jobs during the recent growth spike.
Confirm the durability of the key-labor claim. Review turnover records, CTEF certifications, wage rates, and whether crews are W-2 or subcontracted. The entire moat rests on crew retention, so understand what happens to the team post-sale and whether non-competes or retention bonuses are needed.
Validate bonding, licensing, and prevailing-wage compliance. Pull the surety relationship terms, confirm the $2M/$6M limits survive a change of ownership, and audit payroll, drug-testing, and workforce compliance on public contracts where a violation can jeopardize eligibility.
Examine the lease through 2037. Confirm assignability on a change of control, the 3% escalation cap, renewal options, and condition of the facility, since the below-market rent is cited as a value driver but no real estate conveys.
Clarify the owner's true day-to-day role and the transition structure. The owner at 45 offers either a clean exit or a partnership, so quantify how much of sales and business development walks out the door and how customer relationships transfer during the handover.

Source

Originally listed on BizBuySell. View original listing →