Texas Trenchless CIPP Pipe Lining Contractor, 18-Year Specialty Infrastructure Firm

$6.0M

Revenue

$2.0M

SDE

4.8x

Multiple

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Full Editorial Writeup

This is an 18-year-old Texas specialty contractor that rehabilitates failing pipe from the inside without excavation. Core services are cured in place pipe (CIPP) lining, spray applied pipe lining, epoxy coating and structural point repair, supported by CCTV inspection, robotic cutting and hydro jetting. The company focuses on large diameter storm, sewer, culvert and process piping that most plumbing contractors are not equipped to touch, which lets it compete as a dedicated specialist rather than a generalist adding lining as a sideline.

The customer roster is the standout asset: investor owned utilities, a global semiconductor manufacturer, federal military installations, major municipal water utilities, national construction management firms and institutional real estate operators. Nearly every top account is a repeat customer, several under annual contracts, and several have named the company their preferred pipe rehabilitation provider. Revenue is growing on the commercial and industrial side, where trenchless work avoids the shutdowns, road closures and restoration costs of open cut replacement.

Be careful with the headline numbers. The $6.0M revenue and $1.98M SDE are 2026 figures annualized from eight months and normalized, and they are unaudited. The filed 2025 federal return shows roughly $4.2M revenue and $1.1M SDE. That is a large gap between what is on paper and what is being asked, and it drives the entire diligence workstream. The sale includes an equipment package with roughly $600k to $800k of fair market value, the service fleet and accounts receivable, conveys free of interest bearing debt, and offers seller financing to a qualified buyer.

Why we like it

The business earns from marquee, credit-worthy accounts that return year after year, with several under annual contracts and preferred-provider status at global semiconductor, federal, and municipal buyers. Receivables are current and collecting, with over $1 million converted to cash in August alone, which signals real billing quality rather than paper earnings. That client concentration in blue chip names is both the strength and the thing to size carefully.
Barriers to entry are genuine: the equipment package runs into seven figures at original cost, crews require specialized certification, and industrial and municipal buyers award work on demonstrated project history, not lowest price. A buyer inherits an established brand, a certified crew, and a customer list that the listing credibly claims would take a decade to replicate. Being a dedicated pipe lining specialist rather than a plumber-with-a-sideline is how it wins the large diameter work generalists cannot self-perform.
Aging underground infrastructure, tightening environmental rules, and the cost of open cut replacement all push demand toward trenchless rehabilitation. Municipal water and sewer systems, federal installations, and industrial process piping all need this whether the economy is up or down, which is what makes pipe rehab a defensive, non-discretionary spend. The commercial and industrial segment driving recent growth carries better margins than pure municipal bid work.
The heavy, largely depreciated equipment fleet means book value understates operating capacity, and a strategic acquirer building a trenchless or specialty trades platform gets an instant Texas beachhead. A GM, sales manager, operations and safety manager, and field superintendent are already in place, so the org is not entirely owner-dependent. Seller financing availability signals the owner has skin in a clean transition.

How to improve it

Reconcile the annualized 2026 numbers against the filed 2025 return before doing anything else, then rebuild a defensible run-rate. Deals priced off an eight-month annualization command a discount, so use the gap between $4.2M actual 2025 revenue and the $6.0M headline as negotiating leverage on price or structure. Push more consideration into an earnout tied to trailing twelve month results.
Convert repeat relationships into formal multi-year master service agreements with the largest industrial and utility accounts. Several already buy under annual contracts, and locking preferred-provider status into paper raises revenue visibility and the exit multiple. This is the single highest-value contracting move in the first 90 days.
Pursue the additional facilities the largest industrial customer has already identified but not yet served. This is captured, warm demand inside an existing relationship, meaning near-zero customer acquisition cost and fast conversion. Assign an account owner and a 90-day plan to quote every unserved site.
Open or plan a second Texas yard to cut the travel, hotel, and per diem costs that come from mobilizing crews across the state and surrounding states. Lower mobilization cost widens job margins and lets crews take work that is currently uneconomic due to distance. Model the crew utilization gain before committing capital.
Reduce single-customer concentration risk by expanding into adjacent municipal and institutional accounts using the demonstrated project history that already wins work. Diversifying the revenue base protects the multiple at the next sale and buffers against the loss of any one blue chip account. Build a named-target pipeline and track win rates.
Tighten the equipment financing picture by deciding at close which financed units to assume versus retire, and building a replacement capex schedule for the fully depreciated fleet still in daily service. That gear works today but will need reinvestment, and an honest capex forecast prevents a nasty surprise year two. Fold the plan into the LOI economics.
Formalize crew certification, safety, and succession so the business survives the departure of any key installer or the owner. Specialized certification is a barrier to entry and also a key-person risk, so document processes and cross-train. A manager-run playbook makes this a true platform asset rather than an owner-tethered shop.

Diligence notes

The valuation rests on unaudited 2026 figures annualized from eight months and normalized for job cost timing and depreciation, versus a filed 2025 return of roughly $4.2M revenue and $1.1M SDE. Insist on full statements, the normalization schedule, monthly job-level data, and tax returns for three years to test whether the run-rate is real or a favorable window. This gap is the whole deal: confirm it or reprice.
Customer concentration is severe by design, with a handful of blue chip accounts driving results. Quantify revenue by customer over three years, verify which accounts are truly under contract versus repeat-by-choice, and understand renewal terms, preferred-provider durability, and switching risk if the owner leaves. Loss of the top one or two accounts could impair the earnings that justify the price.
Validate the equipment package independently: original cost is about $1.7M across roughly 45 line items but fair market value is estimated at only $600k to $800k, and certain units carry financing. Get an itemized schedule with make, model, condition, and lien status, plus a realistic replacement capex forecast for gear fully depreciated but still in daily service. The FF&E figure of $700k should be verified against an independent appraisal.
The facility is leased and not included, so review lease term, rate, renewal options, and whether the shop and yard can support the second-location growth thesis. Confirm the receivables being conveyed are current and collectible, given the $1M-plus August collection cited, and age the AR by customer. Also confirm the business truly conveys free of interest bearing debt with seller retaining cash.
Assess key-person and crew risk: certified installers and the field superintendent are essential, and the market awards work on project history that lives with people. Verify certifications, tenure, turnover, and non-compete or retention terms for the GM, sales manager, and superintendent. Understand exactly what the owner does day to day and structure a transition and non-compete accordingly.
Confirm the backlog and pipeline behind the 18% year-over-year growth claim, including signed work versus quoted work and the mix of industrial versus municipal jobs. Bid-based municipal work and project-based industrial work can be lumpy, so scrutinize revenue seasonality and the sustainability of margins as labor cost is said to have held flat. Understand bonding capacity and any large-project risk.

Source

Originally listed on BizBuySell. View original listing →