Residential Electrical Contractor, Semi-Absentee Eastern Kansas

$8.1M

Revenue

$1.7M

SDE

6.2x

Multiple

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Full Editorial Writeup

This is an established residential electrical contractor in eastern Kansas doing over $8 million in annual revenue and roughly $1.5 million to $1.7 million in adjusted earnings. The company performs new-construction rough-ins, trim-outs, and service work for a diversified base of national, regional, and local homebuilders, backed by a service department and light commercial and underground capability. The critical structural detail is that work is awarded at the subdivision level rather than lot by lot, which means a single builder relationship translates into a multi-year production run rather than a one-off job.

The operation is genuinely manager-run. A full bench of foremen splits territory across the market, long-tenured subcontract crews work exclusively for the company, and master electrician licensing is held on staff independent of ownership. Ownership already sits out of the truck and spends its time on bidding and builder relationships. An owner-built estimating model with preloaded standard bids, purchase order history, and vendor accounts across multiple supply houses conveys with the sale.

What makes this notable is the combination of clean financials and identified upside. The balance sheet carries no notes payable, assets convey free and clear, billing is on completion with roughly 30-day terms and no retainage, and the material position lets the company hold price and take volume without waiting on supplier allocation. Growth has been constrained by ownership's available hours, not demand, leaving a deliberately underbuilt service division and an untapped adjacent metro across the state line as clear next moves for a buyer with capacity.

Why we like it

Earnings quality is strong for a trades business: no notes payable, assets convey free and clear, billing on completion with roughly 30-day collection terms and no retainage held. That means clean cash conversion and no working-capital trap, which is rare in construction where retainage and slow collections usually chew up profit.
The moat is the subdivision-level award model rather than lot-by-lot bidding, so a single builder win carries a multi-year production run. Builder relationships are long-standing and spread across many accounts rather than concentrated in one, and jurisdictional licensing is already held in the towns the company works.
Residential electrical for homebuilders plus a service department is durable demand. New construction is cyclical, but the diversified builder base, light commercial and underground work, and a real service arm give this more resilience than a single-channel new-build shop.
The operator advantage is inherited upside, not a turnaround. Master licensing sits on staff independent of ownership, foremen run the field, subs work exclusively for the company, and the estimating system with preloaded bids conveys, so a platform buyer steps into a functioning organization rather than rebuilding one.
The seller is staying involved in bidding and builder relationships with no stated time limit and signing a non-compete. That de-risks the single biggest transition worry in this deal, which is whether builder relationships and bidding know-how walk out the door at closing.

How to improve it

Build out the deliberately underbuilt service division. Service work is higher margin, less cyclical, and recurring compared to new-construction rough-ins, and the existing subdivision footprint already generates homeowner demand the company is not capturing today.
Open the adjacent metropolitan market across the state line using existing crews, material, and estimating systems. The company has never worked this territory, so this is greenfield expansion using assets and systems already paid for rather than a from-scratch build.
Add field capacity against work already awarded but not yet started. There is a backlog of committed revenue that ownership's hour constraint has capped, so hiring or subbing additional crews converts identified, contracted work into cash quickly.
Capture finishing and add-on work that homeowners in the company's own subdivisions currently give to other contractors. These are warm leads inside jobs the company already touched, so acquisition cost is near zero and the margin on small add-ons is attractive.
Grow the light commercial book alongside the core residential business. Commercial work diversifies away from housing-cycle sensitivity and often carries better terms, and the company already has underground and light commercial capability to build on.
Formalize the estimating and bidding function so it is not dependent on the seller long term. Document the preloaded bid logic, vendor pricing, and builder relationship playbook into a repeatable system and train a bidder, because the seller's open-ended commitment is a bridge, not a permanent solution.
Leverage the substantial material position as a working-capital and pricing weapon. Track inventory turns and use the ability to hold price and take volume without supplier allocation as a competitive pitch to builders during allocation-tight periods.

Diligence notes

Verify the true owner-dependency of bidding and builder relationships. The seller frames this as semi-absentee, but ownership still handles bidding and top builder relationships, so confirm exactly how much revenue is relationship-driven and stress-test what happens when the seller eventually fully exits despite the open-ended offer.
Confirm the licensing structure survives the sale. Master electrician licensing is said to be held on staff independent of ownership, so verify the qualifying individual's employment terms, retention risk, and whether the license transfers cleanly under Kansas rules without the seller.
Pressure-test the earnings against the housing cycle. Revenue is tied to homebuilder new construction, so pull multi-year financials to see how EBITDA held through prior rate and housing softness, and separate the more stable service revenue from cyclical new-build volume.
Scrutinize the subcontract crew arrangement. Long-tenured subs who work exclusively for the company are a strength but also a classification and continuity risk, so review contracts, worker-classification exposure, and what retains these crews if ownership changes.
Reconcile the reported figures. The listing shows $1.7M cash flow, $1.58M EBITDA, and 'over $1.5M adjusted EBITDA' at a 6.18x multiple on a $10.5M ask, so demand a clear quality-of-earnings tying add-backs, the master license cost, and any owner compensation replacement to a defensible normalized number.

Source

Originally listed on BizBuySell. View original listing →