Third Generation International Electrical Distributor, Texas-Based Export Supply Business

$23.9M

Revenue

$1.7M

SDE

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Full Editorial Writeup

This is a third-generation, Texas-headquartered distributor of electrical, industrial, and telecom materials that sources from over 2,000 manufacturers worldwide and ships to an entirely international customer base. The company serves electric power utilities, oil service companies, industrial firms, telecom providers, EPC contractors, and marine sector clients, splitting its book between large-scale project orders and steady MRO (maintenance, repair, and operations) demand. At roughly $23.9M in revenue and $1.75M in adjusted EBITDA, it is a real operating business with three generations of relationships and a proprietary SQL-based ERP (branded PRAEFCS) that runs quoting, RFQ management, and purchase order tracking.

The standout structural fact is that 100% of revenue comes from foreign, non-US clients. That makes this a US-based export/logistics arbitrage business: it sits between American and global manufacturers on one side and overseas industrial buyers on the other, monetizing sourcing depth, reliable international logistics, and name recognition built over decades. The MRO component is the durable part of the model, since utilities, oil service, and marine operators need replacement parts regardless of the economic cycle.

The headline growth is attractive on paper: from 2023 through the TTM ending July 2026, revenue compounded at 11.9% and adjusted EBITDA at 25.1%, implying real operating leverage as the mix shifted or costs were disciplined. With five shareholders (two active in operations) all seeking a full exit and open to various deal structures, this is a business where the buyer must quickly reconstruct the roles the two active owners play and rebuild the relationship layer that three generations created.

Why we like it

Earnings quality is anchored by an MRO book layered on top of project work, which means recurring replacement-part demand from utilities, oil service, telecom, and marine operators who cannot afford downtime. Adjusted EBITDA of $1.75M on $23.9M of revenue reflects a thin but real distribution margin, and the 25.1% EBITDA CAGR since 2023 suggests genuine operating leverage rather than one-time spikes.
The moat is relationship-based and logistics-based, not capital-based: a supplier network of over 2,000 manufacturers, three generations of reputation, and proven reliability moving material internationally are hard to replicate quickly. The proprietary PRAEFCS ERP for quoting, RFQ, and PO tracking adds switching-cost friction and operational discipline that a new entrant cannot buy off the shelf.
Market tailwinds favor essential industrial infrastructure spend, with global electrification, grid buildout, oil service MRO, and telecom expansion all driving durable demand for the exact materials this company supplies. Serving EPC firms and utilities means exposure to long-lived infrastructure projects rather than discretionary consumer cycles.
The operator advantage is real for a buyer who can systematize sourcing and add digital logistics: management flags underserved domestic sectors, new manufacturer partnerships, and cloud ERP migration as untapped levers. A distribution operator with capital could bolt on adjacent product lines and geographic coverage on top of an already-scaling base.

How to improve it

Immediately map and de-risk the two active shareholders' roles, because in a relationship-driven export distributor the founders often ARE the supplier and customer relationships. Build retention packages, earnouts, or consulting agreements that keep them tied to the largest accounts through at least a 12 to 24 month transition.
Diversify away from 100% foreign revenue by pursuing the underserved domestic sectors management already identified, which reduces FX, customs, and geopolitical concentration risk while widening the addressable market. A domestic MRO channel would also smooth the lumpiness of large international project orders.
Migrate the proprietary SQL-based PRAEFCS platform to a cloud ERP with e-commerce and self-service quoting, turning the internal tool into a customer-facing ordering portal. This lowers cost-to-serve on small MRO reorders and creates the digital logistics scalability the seller calls out as an opportunity.
Push margin by analyzing gross margin by product line, manufacturer, and customer, then repricing or exiting low-margin project work that consumes working capital for thin returns. On $23.9M of revenue, even a 100 basis point gross margin gain is roughly $239K of incremental contribution.
Add value-added services such as kitting, consolidation, and vendor-managed inventory for MRO accounts, which raises switching costs and captures higher-margin fees beyond pure resale. This deepens the recurring MRO relationships that make the earnings durable.
Formalize supplier agreements with the top manufacturers to lock in pricing, availability, and rebate/volume tiers rather than relying on informal, relationship-based sourcing. This protects gross margin and reduces the risk that key supply relationships walk out with the departing shareholders.
Institute disciplined working capital management around international inventory and receivables, since export distribution ties up significant cash in in-transit goods and cross-border payment terms. Tightening the cash conversion cycle directly funds growth without new debt.

Diligence notes

The single biggest item is the 100% foreign revenue concentration: verify customer concentration by account and country, understand FX exposure, payment terms, currency of invoicing, and any political or sanctions risk in the served regions. Confirm how collections work and what percentage of receivables are aged or at risk.
Scrutinize the adjusted EBITDA bridge, because the 25.1% EBITDA CAGR against an 11.9% revenue CAGR implies large add-backs or margin shifts that need line-item validation. Ask specifically what adjustments were made to reach $1.746M and whether they are truly non-recurring or normalized.
Reconstruct exactly what the two active shareholders do day to day, which supplier and customer relationships depend on them personally, and whether those relationships transfer. With five shareholders all exiting, the loss of institutional knowledge is the most acute post-close risk.
Assess the proprietary PRAEFCS ERP for key-man dependency, documentation, and technical debt, since a bespoke SQL platform can become a liability if the developer leaves. Confirm whether the code, IP, and support are owned by the company and transferable.
Analyze the revenue mix between lumpy large-scale project orders and steady MRO business, because the durability thesis rests on the MRO share being sticky and recurring. Request multi-year data on project versus MRO revenue and customer repeat rates to confirm the recurring component.

Source

Originally listed on BizBuySell. View original listing →