Construction and Building Services

Lower Middle Market Business Sales I. Where Are We Coming From – 2021-2022 The best time to sell a privately held business were the years 2021-2022, as valuations and deal volumes reached a peak not seen over the previous 20 years. We looked at data on five industries and found that all had peak valuations…

EBITDA is an abbreviation for “earnings before interest, taxes, depreciation, and amortization.” It is calculated by taking operating income and adding back to it; interest, depreciation, and amortization expenses. EBITDA is a key metric widely used by financial and investment professionals operating in the lower-middle market to analyze a company’s operating profitability and estimate valuations….

Construction M&A Deal Activity Slows In 2022 But Remains Healthy Construction-related deals for the first 8 months of 2022 totaled 498 which is a lower pace than 2021. However, as seen below, this is still a very healthy level of deal volume. In short, 2021 was an extraordinary year for M&A in every industrial sector,…

Despite the economic headwinds of higher interest rates and inflation, the construction sector continues to see steady merger & acquisition activity. Construction companies tend to sell for 3.5x to 7x EBITDA depending on the company’s size and other qualitative factors which can often be improved prior to selling. Here are ten actions an owner can take to prepare the company for presentation to the market and increase the potential buyer’s offer price.

The backlog of profitable jobs is a critical factor in determining the valuation of a construction business. While a company’s value is derived from various factors, such as financial performance and assets, a contractor with little work on its backlog is not attractive to potential buyers. The absence of a healthy backlog can lead to a decrease in financial stability, bonding capacity, and skilled workers, which could cause the business’s value to plummet. Contractors must bid competitively but profitably and maintain stable operations to keep work on the backlog. This approach can help maintain valuation for the long haul and enable owners to focus on increasing their business’s worth.

EBITDA multiples are sometimes used to determine approximate business value in a sale transaction.  Multiples can vary widely by industry and within industry segments.  In recent years, we have also seen more higher end deals with multiples of 7 to 8 times EBITDA.  The data tells us only premium quality businesses are achieving extraordinary valuations…

While several business valuation methods exist, EBITDA multiples are frequently used to determine approximate business value in a sale transaction. Multiples can vary widely by industry and within industry segments, and the construction industry is no different. The data and experience tell us that only premium-quality businesses are achieving extraordinary valuations in the construction industry….

In 2024, we observed a significant increase in M&A deal activity in the lower middle market for specialty trades contractors and, specifically, for heavy/civil construction contractors. In this update, we look back at year-over-year deal activity, including 2024 for heavy/civil contractors, share examples of recent deals, and consider what makes these companies attractive to buyers….

A Surge in Connections: Electrical Contractor M&A Rebounds The U.S. electrical contracting sector rebounded in merger and acquisition (M&A) activity in 2024, following a slowdown in 2023.  This resurgence reflects a return to more favorable economic conditions after a tough period of rising inflation, increasing interest rates, and economic uncertainty. Private Equity Platforms Powering Up…

What to Know About Conducting a Targeted Acquisition Search and Six Steps to Close the Deal Acquiring another contractor can be one of the most effective ways to grow your business— especially when organic expansion slows or becomes less efficient. But like any major initiative, acquisitions require upfront planning, internal alignment, and the right search…