Stone Fabrication Facility, 20-Year North Carolina Countertop Manufacturer

$15.4M

Revenue

$2.3M

SDE

4.9x

Multiple

Subscribe Free

Read the full deal writeup

Get Free Access

Already a member? Sign in

Full Editorial Writeup

This is a stone fabrication business operating in Mecklenburg County, North Carolina since 2003, producing countertops, sinks, bathroom vanities, and related stonework for both residential homeowners and commercial contractors. The operation runs out of a 52,500 square foot facility that includes a large showroom, indoor and outdoor warehouse space, and a new showroom and design center currently under construction. The company employs 46 people (45 full-time) and is described as fully manager-run, allowing for absentee ownership.

On roughly $15.4M in revenue the business throws off $2.33M in cash flow, a 15% margin that is reasonable for a fabrication and installation shop carrying meaningful equipment and labor. The asking price of $11.5M implies a 4.94x multiple on cash flow, which is rich for a services-heavy manufacturer, but the price bundles $3.4M of inventory and $1.2M of FF&E, meaning roughly $4.6M of hard assets are inside the number. The real estate is owned and appears bundled or at minimum ambiguous, so the true operating multiple depends heavily on how the building is treated.

The dual residential and commercial customer mix provides some revenue diversification, and management-run operations reduce key-person risk on paper. That said, this is a discretionary, project-based business tied directly to kitchen and bath remodels and new construction, both of which contract hard when housing activity slows and rates rise. A buyer should treat the countercyclical claims in the listing with skepticism and underwrite to a downturn scenario.

Why we like it

Real cash flow at real scale: $2.33M in SDE on $15.4M revenue is a legitimate lower-middle-market operation, not a lifestyle shop. A 15% margin on a fabrication and install business shows disciplined pricing and shop efficiency, which is the hardest part to build from scratch.
The purchase includes $3.4M of inventory and $1.2M of FF&E, so roughly $4.6M of tangible value sits inside the $11.5M price. State of the art machines and a fleet mean a buyer inherits productive capacity rather than needing a large post-close capex bill.
A 45-person team with a full management layer already runs the business daily, which is why the seller can legitimately call it absentee. For an investor buying to allocate capital rather than swing a hammer, an intact operating team is the difference between a deal and a job.
Serving both residential remodels and commercial projects gives two demand channels off one asset base. When one softens the other can carry utilization, and the second channel is a natural expansion lane for a buyer willing to push commercial bidding.

How to improve it

Nail down the real estate treatment before anything else and, if the building is bundled, restructure to buy the operating company on an EBITDA multiple while sale-leasebacking or separately valuing the 52,500 SF facility. Splitting the asset out can meaningfully lower the effective operating multiple and free up capital.
Build a preventive maintenance and re-measure service line so past countertop customers become a repeat revenue source. Fabrication is inherently one-time, so layering in service, resealing, repair, and remodel add-ons is the cleanest path to recurring dollars.
Execute the stated expansion into a second warehouse and showroom a few hours away, but only after proving demand with a satellite sales presence first. Standing up brick and mortar before validating the market is how good balance sheets get wrecked.
Add a second or third production shift to lift utilization on equipment you already own. Incremental shifts convert existing fixed machine cost into more gross profit without a proportional capex outlay.
Formalize commercial contractor relationships into standing supply agreements and preferred-vendor terms with builders and GCs. Predictable project pipelines smooth revenue and make the business far more defensible in a housing slowdown.
Institute tight KPI reporting on job-level gross margin, quote-to-close rate, and slab yield/waste. A shop this size almost always has 200 to 400 basis points of margin hiding in scrap and mispriced jobs.
Use the new design center as a lead-generation and average-ticket engine by cross-selling premium materials, sinks, and full bath and kitchen packages. Higher attach rates lift revenue per job without adding customer acquisition cost.

Diligence notes

Confirm exactly what the $11.5M buys: is the owned building and land included, and if so at what allocated value. The 4.94x cash flow multiple looks very different once real estate is carved out, so mispricing this is the single biggest risk in the deal.
Scrutinize the $3.4M inventory figure for slab age, obsolescence, and whether it is realizable at book value. Stone inventory can carry dead SKUs and discontinued colors, and paying full price for slow-moving slabs quietly inflates the multiple.
Stress test revenue and cash flow against the housing cycle by pulling monthly revenue for the last three to four years. This is a remodel and new-construction business, so verify how it performed during rate spikes and slowdowns rather than trusting the countercyclical narrative.
Verify the absentee claim by mapping who actually holds customer relationships, vendor terms, and estimating knowledge. If the departing owner is the real POC for suppliers and key builders, the transition risk is much higher than the listing implies.
Assess customer and contractor concentration on the commercial side, since a few large builder accounts can represent an outsized share of revenue. Losing one anchor GC could swing SDE materially in year one.
Review the condition, age, and remaining life of the CNC machines, saws, and fleet, plus any lease or lien encumbrances. State of the art equipment can still carry deferred maintenance or debt that offsets the apparent asset value in the price.

Source

Originally listed on BizBuySell. View original listing →