Utah Plumbing Contractor, Residential & Commercial

$3.5M

Revenue

$500K

SDE

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Full Editorial Writeup

This is a Utah-based plumbing contractor serving a blend of residential (70%), commercial (25%), and industrial (5%) customers. The business generates roughly $3.5M in annual revenue and $500K in EBITDA, putting it at about a 14% margin, which is respectable for a mixed new-construction and service plumbing shop. It owns its real estate, though the listing does not confirm whether that property is part of the transaction.

The most important fact in this listing is customer concentration. DR Horton, the national homebuilder, accounts for 30% of revenue through new-construction work, while the next four customers combined contribute only 13%. That means this is heavily a builder-services business tied to one anchor account, not a diversified residential service and repair operation with a deep base of repeat homeowners.

The upside here is that plumbing is genuinely essential work with steady demand, and the residential majority gives it exposure to both new build and repair. The risk is that new-construction volume is cyclical and the single-customer dependency on DR Horton makes the cash flow far less durable than the headline margin suggests. A buyer is really underwriting the DR Horton relationship first and the standalone plumbing business second.

Why we like it

Plumbing is about as essential as home services get, and this business earns a clean $500K EBITDA on $3.5M revenue, a solid 14% margin for a mixed new-construction and service shop. Water and drainage problems do not wait for the economy to recover, which gives the underlying trade real staying power.
The business owns its real estate, which typically means a buyer can either roll the facility into the deal or arrange a lease-back that provides rent-side optionality. Owning the yard and shop also removes landlord risk and gives control over a critical operating asset for a trade that needs vehicle and material storage.
Utah has been one of the strongest population and housing-growth markets in the country, which is exactly why a homebuilder like DR Horton is driving 30% of revenue. That tailwind supports both new-construction and eventual service and replacement demand as the installed base of homes ages.
The residential-heavy mix (70%) is attractive because it opens a clear path to build a higher-margin, recurring service and repair book on top of the current builder-dependent revenue. An operator who shifts volume toward service calls and maintenance can materially improve margin quality and reduce cyclicality.

How to improve it

Immediately map the DR Horton relationship in granular detail: contract terms, pricing, backlog, and the personal relationships that drive it. In the first 90 days, lock in whatever continuity you can and begin quoting other production builders so you are not a single storm away from losing a third of revenue.
Build out a residential service and repair division to complement the new-construction work. Repair and replacement generate higher margins, faster cash collection, and repeat customers, which is the exact opposite of the lumpy, concentrated builder revenue you are inheriting.
Launch a maintenance and membership program for existing residential customers to create genuinely recurring revenue. Even a modest base of monthly or annual service plans smooths cash flow and creates a defensible customer relationship that a competing builder-services shop cannot easily poach.
Diversify the commercial and industrial book, currently only 30% combined. Targeting property managers, facility operators, and general contractors for service contracts adds counter-cyclical revenue that holds up better than new-build when housing starts slow.
Tighten job-costing and dispatch systems to protect the 14% margin as you scale. Plumbing shops leak profit through truck rolls, callbacks, and poor scheduling, so a field-service software rollout in the first year pays for itself in utilization gains.
Invest in recruiting and retaining licensed plumbers, since labor is the true constraint in this trade. An apprenticeship pipeline and clear pay progression let you take on more work without being capped by the current headcount.

Diligence notes

The DR Horton concentration is the whole ballgame. Verify whether the relationship is contractual or handshake, how long it has run, whether it survives the ownership change, and what a 30% revenue loss would do to the $500K EBITDA. This single item should drive both the valuation and the deal structure, likely with an earnout tied to customer retention.
Confirm exactly what is being sold regarding the real estate. The listing shows real estate as owned but not disclosed in the price, so clarify whether it is included, sold separately, or lease-back, because that changes the effective multiple and total capital required.
Pull the new-construction versus service revenue split and margin by segment. New-build plumbing is lower-margin and cyclical, so understand how much of the $500K EBITDA depends on builder volume that could dry up in a housing slowdown.
Scrutinize the licensed-plumber roster, wage rates, and whether the owner personally holds the master license required to operate. If the business depends on the seller's license or a single key foreman, that is a continuity risk that must be resolved before closing.
Request the aged work-in-progress and receivables detail, since builder-driven plumbing often carries slow-paying retainage and long AR cycles. Working-capital needs here can be significant and should be negotiated into the deal rather than discovered after close.

Source

Originally listed on BizBuySell. View original listing →