Specialty Construction Company, 24-Year Treasure Valley Contractor

$13.9M

Revenue

$1.5M

SDE

3.4x

Multiple

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Full Editorial Writeup

Founded in 2001, this specialty full-service construction company operates out of Ada County, Idaho, serving the Treasure Valley and surrounding regions in the Boise metro. Over 24 years it has built a reputation for quality craftsmanship and delivering projects on time and on budget, which has earned it long-standing partnerships with leading local general contractors and a loyal repeat customer base. The business runs with roughly 30 full-time employees and a management team averaging more than 10 years of tenure, which is the single most important asset in a labor-constrained trade.

On $13.9M of revenue the company throws off $1,471,360 of cash flow, roughly an 11 percent owner-earnings margin, which is healthy for a subcontractor whose value flows through the crew rather than proprietary IP. The listing masks the specific trade (the seller keeps the actual specialty confidential), but the economics point to a mature, systemized operation rather than a one-man shop. FF&E of $908,455 is included in the $5M asking price.

The seller owns the 19,000 square foot facility outside Boise and will either sign a long-term lease with a buyer or sell the property separately, so real estate is not baked into the asking price. At 3.4x cash flow this is priced like a construction subcontractor, not a platform, and the durability of that multiple depends entirely on how much of the enterprise value walks out the door with the departing owner and how sticky the GC relationships prove to be.

Why we like it

The earnings are real and margin is respectable for the trade: $1.47M of cash flow on $13.9M of revenue, an 11 percent owner-earnings margin, on a business that has been consistently profitable since 2001. That is a mature P&L, not a startup story, and the 3.4x multiple is disciplined for construction cash flow.
The management team averages more than 10 years of tenure and is expected to stay through the transition, which de-risks the biggest threat in any trades acquisition: losing the institutional knowledge and field leadership. In a specialty where the crew is the product, a stable bench is worth more than any equipment list.
The Treasure Valley is one of the faster-growing metros in the country, and Boise-area commercial construction demand provides a genuine tailwind for a subcontractor with established GC relationships. A new owner can lean into that growth rather than fight a shrinking market.
Long-term partnerships with leading local general contractors create a repeat-business channel that is hard for a new entrant to replicate. Those relationships, plus a 24-year reputation for on-time delivery, are the closest thing to a moat a subcontractor gets.

How to improve it

Lock the management team and key field leads into retention and non-compete agreements before close, ideally with earnout or equity incentives. The entire thesis rests on continuity, so paying to keep the people is cheaper than replacing them in a tight labor market.
Build a real backlog and pipeline reporting rhythm in the first 90 days so you can see forward revenue by GC relationship and project type. Construction cash flow is lumpy, and knowing your booked work versus your capacity is the difference between confident growth and a working-capital crunch.
Push disciplined price increases and change-order discipline on the existing GC relationships. A subcontractor delivering on time for two decades usually leaves margin on the table by under-billing change orders and holding stale unit pricing.
Add estimating and project management capacity so the business can bid a higher volume of Treasure Valley commercial work without the owner as the bottleneck. The listing frames organic growth as the play, and the constraint is usually estimating throughput, not demand.
Negotiate the facility lease terms hard at close, since the seller owns the building and wants either a long-term lease or a separate sale. Lock a fair, capped-escalation lease so rent does not quietly erode the 11 percent margin over the hold.
Cross-sell adjacent services to the existing GC base or acquire a complementary trade to become a fuller-service package for the same customers. This deepens wallet share with relationships you already have rather than chasing new logos.

Diligence notes

Identify the actual specialty trade, because the listing hides it and the entire valuation hinges on the trade's cyclicality, labor availability, and pricing power. A finish trade, a mechanical trade, and a site trade carry very different risk profiles and comp multiples.
Pull customer concentration by GC and by project over the last three to five years. Long-standing partnerships are a strength until one GC is 40 percent of revenue and that relationship is personal to the departing owner.
Scrutinize how much of the $1.47M cash flow depends on the owner's direct involvement in bidding, relationship management, or field oversight. Verify the SDE addbacks and confirm what a market-rate replacement for the owner's functions would cost against that number.
Examine backlog, work-in-progress accounting, and job-level margins to confirm profitability is not being propped up by a few large one-time projects. Review retainage, warranty exposure, bonding capacity, and any pending liens or claims typical of construction.
Clarify the real estate decision early: model both the long-term lease at market rent and the separate purchase price for the 19,000 square foot facility. The deal economics at 3.4x look different once a real rent line hits the P&L.

Source

Originally listed on BizBuySell. View original listing →