Specialty Masonry & Outdoor Building Supply Distributor, 13-Year New Jersey Operation

$14.0M

Revenue

$2.6M

SDE

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Full Editorial Writeup

This is a specialty distributor of masonry and outdoor building materials based in Morristown, New Jersey, founded in 2013. The company positions itself as a one-stop shop for landscaping and hardscape contractors, carrying a deep catalog that spans pavers, bluestone, limestone, thin and full-bed stone veneer, retaining wall materials, residential and architectural brick, cast stone, and CMU block. Bulk and bagged product lines add rock salt, sand, Quikrete, cement, mortar, gravel, decorative stone, and storm water drainage products, and the business also offers custom fabrication of bluestone and limestone including thermal, rock-facing, and radius cutting from templates.

The customer base is the real strength here: 200-plus accounts made up of contractors, builders, site and general contractors, and municipalities. Management describes sales as highly repetitive, which for a building-materials yard means the same contractors reorder across jobs even without formal contracts. A lean team of 12 including the owner and a general manager runs yard operations, delivery, fabrication, and an inside sales desk of three, operating non-union out of 1.5 acres of separately owned property plus two leased adjacent lots.

At $14M in revenue and $2.6M in cash flow, this is a genuinely profitable regional distributor with roughly an 18.6 percent SDE margin, which is strong for building-materials distribution. The owner is retiring and will commit to a full year of transition, which matters because supplier relationships, pricing, and account loyalty often live in the owner's head. The asking price is undisclosed, so the entry multiple and real estate terms will need to be nailed down directly.

Why we like it

Earnings quality is real and substantial: $2.6M of cash flow on $14M of revenue is an 18.6 percent SDE margin, which is above typical building-materials distribution. The business is described as highly profitable with well-managed inventory enabling quick delivery, the operational hallmark of a yard that actually turns product rather than sitting on dead stock.
The customer book is sticky and diversified across 200-plus accounts spanning contractors, builders, site contractors, and municipalities. Sales are described as highly repetitive, which means contractors keep reordering across jobs, and municipal accounts add a credit-worthy, slow-to-churn base that smooths demand.
Hardscape and outdoor building materials ride suburban remodeling and site-development spend in affluent northern New Jersey. The one-stop breadth plus custom bluestone and limestone fabrication creates a differentiated local position that national big-box channels do not fully replicate for contractor-grade material.
A lean 12-person non-union team with an in-place general manager means the business is not fully dependent on a single rainmaker owner. The retiring seller's 1-year transition commitment is unusually generous and de-risks the handover of supplier pricing and account relationships.

How to improve it

Formalize contractor purchasing into standing accounts and volume rebate tiers to convert repetitive buying into something closer to committed, predictable revenue. Layered pricing agreements with the top 20 accounts would lock loyalty and give you forward visibility into demand.
Push the custom fabrication line harder as a margin engine. Thermal, rock-facing, and radius cutting are higher-value services than pass-through material sales, so market fabrication capacity directly to architects and high-end residential contractors to lift blended gross margin.
Build a seasonal counter-cyclical plan around rock salt, bulk sand, and storm water drainage products. These winter and weather-driven lines offset the spring and summer hardscape peak, so proactively contract municipal salt supply to smooth the revenue curve across the year.
Tighten inventory analytics and introduce delivery routing software to protect the quick-delivery advantage as volume grows. Faster turns and lower carrying cost directly expand cash flow, and better routing frees driver and forklift capacity without adding headcount.
Assess whether the separately owned 1.5-acre parcel can be acquired to control the location long-term and stop lease risk on the two adjacent lots. Owning the yard protects the business from landlord leverage and creates optional real estate value under the deal.
Add a basic digital presence and online quoting portal for contractor accounts to reduce phone-desk load and capture reorders faster. Even a simple account portal shifts routine reorders off the three-person inside desk and lets salespeople chase new accounts.
Recruit and document a successor for the retiring owner during the 1-year transition so supplier terms, pricing logic, and key relationships are institutionalized. The handover window is the single most valuable asset in this deal and should be used to remove owner dependency entirely.

Diligence notes

Separate owner compensation and true discretionary add-backs from the $2.6M cash flow figure, since SDE includes owner salary and perks. Confirm what a hired general manager would actually cost to run the business so you can model real operating EBITDA to a passive buyer.
Scrutinize the real estate: the 1.5 acres is separately owned and two adjacent lots are leased. Get the lease terms, renewal options, and rent on all three parcels, because yard location is existential for a materials distributor and a lease loss could cripple operations.
Analyze customer concentration within the 200-plus accounts to confirm no single contractor or municipality dominates revenue. Review accounts receivable aging, since contractor and municipal customers can be slow payers, and understand how bad debt has trended through cycles.
Stress-test cyclicality given exposure to residential remodeling and site development, which soften in a housing downturn. Pull revenue by year since 2013 to see how the business performed through rate-driven construction slowdowns, as hardscape is partly discretionary.
Verify supplier relationships and pricing, especially for bluestone, limestone, and bagged products. Material distribution margins depend heavily on vendor terms and allocation, so confirm those relationships transfer and are not personal to the retiring owner.
Confirm the actual asking price and deal structure, since it is undisclosed. Clarify whether inventory is included at book or on top of the price, as a materials yard can carry significant working capital that dramatically changes the effective entry multiple.

Source

Originally listed on BizBuySell. View original listing →