Voice & Data Telecom Services, 25-Year Colorado Government Contractor

$4.6M

Revenue

$1.7M

SDE

3.7x

Multiple

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Full Editorial Writeup

This is a 25-year-old telecommunications services company that designs, deploys, and maintains voice and data network solutions for government and private clients. The anchor of the book is an essential-services federal department that has been a continuous customer for more than 25 years, supported through ongoing multi-year maintenance agreements covering tens of thousands of federal workers. Beyond that flagship relationship, the company serves roughly 20 additional active clients spread across state and local government and the private sector.

The business runs lean: 14 full-time employees, a single leased server room that could be relocated anywhere, and effectively zero sales and marketing infrastructure. Every dollar of the $4.6M in revenue has come through word-of-mouth referrals and vendor-partner introductions, which tells you two things. First, the underlying delivery quality is high enough to compound goodwill over decades. Second, there is an obvious, untapped growth lever sitting idle.

At $6.25M asking against $1.7M in cash flow, this prices at 3.68x. That is a reasonable multiple for a services firm carrying a 25-year federal anchor relationship and multi-year contracted maintenance revenue, though the concentration risk in that anchor is the entire ballgame for a buyer.

Why we like it

Earnings quality is strong for a services business: $1.7M of cash flow on $4.6M revenue is a 37% margin, driven by multi-year maintenance agreements rather than one-time project work. Recurring maintenance revenue on mission-critical federal infrastructure is about as sticky as service revenue gets, and it has renewed for 25 years running.
The moat is switching cost and incumbency, not brand or IP. When you support the voice and data networks that tens of thousands of federal workers rely on daily, the incumbent almost always wins renewal because the cost and risk of ripping them out is enormous. Decades of continuous engagement prove the relationship survives budget cycles and administration changes.
This is genuinely recession-resistant demand. Government agencies do not turn off their voice and data networks in a downturn, and maintenance on essential infrastructure is a non-negotiable line item. The federal anchor in particular is insulated from the private-sector spending cuts that hit most B2B service firms.
The operator upside is unusually clean here. The business has zero direct sales and marketing effort and still generates $4.6M in revenue purely on referrals. A buyer who simply adds a competent business-development function is bolting a growth engine onto a machine that has never had one.

How to improve it

Stand up a basic government-focused business development function in the first 90 days. The company admits it has no direct sales or marketing effort, so even one experienced federal-contracting rep pursuing SEWP, GSA schedules, and adjacent agency work could meaningfully expand the pipeline beyond the current 20-odd private and local clients.
Quantify and de-risk the federal anchor immediately. Map every active contract's expiration date, renewal history, and contract vehicle, then push to lengthen and diversify the anchor relationship across multiple task orders so a single procurement decision cannot sink the business.
Formalize and productize the maintenance offering into tiered recurring contracts. Converting ad-hoc or single-agreement maintenance into standardized annual or multi-year service tiers improves revenue predictability and creates a cleaner story for the next buyer or lender.
Institutionalize the vendor-partner referral channel that already drives new business. Build formal reseller and referral agreements with the vendor partners who introduce clients, turning an informal word-of-mouth funnel into a repeatable, contractually reinforced channel.
Document tribal knowledge and reduce key-person risk across the 14-person team. Identify which employees hold critical client relationships and technical certifications, then build redundancy and retention incentives before the seller transitions out.
Explore geographic and agency expansion using the existing federal credential as proof. A 25-year track record supporting an essential federal department is a powerful reference for winning similar contracts with other agencies and in other states, especially given the server room is fully relocatable.

Diligence notes

Customer concentration is the single most important item. The listing centers everything on one essential-services federal department anchoring 25 years of revenue, so quantify exactly what percentage of the $4.6M revenue and $1.7M cash flow that one client represents and understand the true walk-away risk.
Scrutinize the contract vehicles and renewal mechanics on the federal work. Confirm whether the anchor relationship runs through a prime contract, a subcontract, or specific task orders, when they expire, whether they are competitively re-bid, and whether the contracts are assignable to a new owner without re-compete.
Verify the SDE/cash flow buildback and owner add-backs. With a retiring seller and no dedicated sales function, confirm that the $1.7M cash flow figure is defensible after normalizing owner compensation and any expenses that a new operator would actually incur.
Assess key-person and certification dependencies within the 14-employee team. Government telecom work often requires specific security clearances, technical certifications, and long-standing personal relationships, so confirm which employees hold them and whether they stay through and after the transition.
Reconcile the founding timeline discrepancy in the listing. The description says the company has delivered solutions 'for over three decades' while also citing 25 years in business and a 25-year anchor relationship, so pin down the actual operating history and contract start dates.
Confirm the mechanics and cost of the relocatable server infrastructure. The listing says the leased server space could move anywhere, so validate lease terms, any client-mandated hosting or security requirements, and the real cost and risk of relocating mission-critical federal systems.

Source

Originally listed on Synergy Business Brokers. View original listing →