$10.5M
$1.0M
3.8x
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Two Companies are under the the same umbrella: Windows & Door Replacement and Roofing & Construction The fast growing Windows...
Why we like it
- The core services are replacement-driven and largely non-discretionary. Roofs, windows, and doors get replaced when they fail, when storms hit, or when code requires it, which means demand holds up better than remodel or luxury-upgrade work during a downturn.
- Southwest Florida is a structural tailwind for this category. Hurricane exposure, strict impact-rated building codes, insurance-funded replacement, and a growing and aging housing base in the Naples market keep exterior replacement volume flowing regardless of the broader economy.
- The 3.8x cash flow multiple on roughly $1 million of earnings is priced sensibly for a two-company contractor group. If the earnings are clean and repeatable, the entry price leaves room for a levered return without heroic growth assumptions.
- Owning two complementary trades under one roof creates natural cross-sell and shared-overhead leverage. A roof job can feed window and door work and vice versa, and a single operator can consolidate marketing, admin, and back office across both entities.
How to improve it
- Separate the two companies' P&Ls and understand each one's revenue, margin, and lead economics independently. You are buying two businesses, and one is likely carrying the other, so quantify which is the real profit engine before committing capital or a growth plan.
- Build a proactive lead machine beyond storm and insurance events. Layer in Google LSA, paid search, retargeting, and a referral program so the group is not solely dependent on weather and inbound claims for volume.
- Institute rigorous job costing and gross margin tracking per project. Exterior contractors bleed profit through material waste, crew inefficiency, and mispriced bids, so a tight estimating-to-completion margin system can move the roughly 10% cash flow margin materially.
- Push the insurance restoration channel harder. Train the sales team on claims supplementation and adjuster relationships so more storm-damaged homes convert into higher-ticket, insurance-paid roof and window replacements.
- Cross-sell aggressively across the two brands. Every roof inspection should trigger a window and door assessment and vice versa, capturing more wallet share per home visit at near-zero incremental acquisition cost.
- Reduce owner dependency by documenting SOPs and elevating a general manager or two branch leads. This protects the earnings if the seller exits quickly and makes the group far more valuable and financeable at your own future exit.
- Tighten collections and manage working capital on large jobs. Deposits, progress billing, and disciplined AR management can free up cash tied in materials and labor float that is common in contracting.
Diligence notes
- Verify the $1 million cash flow figure and how it is defined across both entities. Confirm whether it is true SDE, whether owner add-backs are legitimate, and how the profit splits between the fast-growing windows business and the roofing operation.
- Assess concentration in storm and insurance-driven revenue. Understand what share of the last three years came from named-storm events versus baseline demand, since a hurricane-heavy year can inflate a normalized earnings picture.
- Confirm licensing, bonding, permits, and any open warranty or workmanship liabilities. Florida roofing and impact-window work carries significant regulatory and warranty exposure, and you need to know what claims or callbacks you are inheriting.
- Investigate labor and subcontractor structure. Determine whether crews are employees or subs, how stable the labor supply is, and whether the roughly $10.5 million in revenue can be delivered without the owner personally managing production.
- Review the customer acquisition engine and its durability. Identify current lead sources, cost per acquired job, and whether any referral partners, insurers, or builders represent single points of failure.
- Clarify years in business and reason for sale, both undisclosed here. Company age, growth trajectory, and the seller's motivation and post-close support materially change the risk profile of a two-company acquisition.
Source
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