$2.1M
$752K
4.7x
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*Electrical experience required.* This acquisition represents an opportunity to acquire a profitable and established electrical services Company with recurring revenue,...
Why we like it
- Earnings quality is strong: $752K of cash flow on $2.14M of revenue is a 35% margin, which is exceptional for electrical contracting where most shops run 10-20%. That margin usually reflects skilled specialty work, pricing power, and disciplined job costing rather than volume-chasing low-bid contracts.
- The recurring revenue and maintenance contracts are the real prize here. Commercial electrical maintenance agreements produce predictable, repeat cash flow and create switching costs, which turns a project-driven contractor into something closer to an annuity. That base is what justifies paying up versus a pure new-construction bid shop.
- Forty years of operating history in Orange County is a durable moat built on reputation, licensing, and long-standing commercial relationships. Trust and track record win commercial electrical bids, and four decades of continuous operation is a referral engine that is very hard for a new entrant to replicate.
- Commercial electrical is genuinely recession-resistant demand. Buildings need power, code compliance, retrofits, and emergency repairs regardless of the economic cycle, and the shift toward EV charging, energy efficiency, and electrification only adds tailwinds. This is essential infrastructure work, not discretionary spend.
How to improve it
- Audit and expand the maintenance contract book in the first 90 days. Identify every commercial customer without a recurring agreement and convert them to scheduled service plans, because each contract added compounds the predictable base and directly lifts enterprise value at exit.
- Systematize field operations and estimating so the business is less dependent on the owner's technical involvement. The listing requires electrical experience, so build documented processes, hire or promote a licensed field lead, and reduce key-person risk to make the business truly transferable.
- Layer in EV charging installation and energy efficiency retrofits as a growth vertical. Orange County commercial properties face increasing electrification and code mandates, and this is high-margin work that fits the existing crew, licenses, and customer relationships.
- Tighten job-level financial reporting to protect the 35% margin. Implement per-project gross margin tracking, labor utilization metrics, and change-order discipline so profitability holds as volume scales and pricing pressure emerges.
- Build a simple outbound sales function targeting property managers and general contractors. Much of a 40-year business runs on referrals, and adding a proactive commercial development effort can grow the pipeline without diluting margins.
- Formalize recruiting and apprenticeship to solve the skilled labor bottleneck. Electrician availability caps growth in this trade, so a pipeline of trained journeymen and apprentices is the constraint that must be solved to scale revenue past current levels.
Diligence notes
- Quantify exactly how much of the $2.14M revenue is recurring maintenance versus one-time project work. The word 'recurring' is in the pitch, but you need contract copies, renewal rates, and revenue split to know whether you are buying an annuity or a lumpy contractor with a maintenance sideline.
- Verify the licensing structure and whether the C-10 electrical license is held by the owner personally or by a qualifying employee. The listing requires electrical experience, so confirm exactly how the license transfers post-sale and whether you need a qualified party or must obtain your own before closing.
- Assess owner dependency and key-person risk carefully. Understand who runs estimating, bids, and customer relationships, and whether those walk out the door with the seller. A 40-year owner-operator often is the business, so probe the depth of the field and management bench.
- Examine customer concentration in both projects and maintenance contracts. Confirm no single commercial client or general contractor drives an outsized share of revenue, since concentration in the maintenance book would materially change the durability of the cash flow you are paying 4.65x for.
- Confirm the cash flow figure with add-back detail and trailing financials. Validate the $752K SDE against tax returns and P&Ls, scrutinize the add-backs, and check whether margins are stable across the last three years or inflated by a recent project surge.
Source
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