Case Study: $5.9M Plumbing Business

The Buyer

This buyer was an experienced business owner in the real estate space, and was familiar with working with plumbers on his real estate projects. A plumbing company was a good target that he thought would complement his existing network and knowledge, and a good place for him to park cash to diversify away from real estate.

Finding the Deal

This business came to us through our business network. It was not technically fully off market as it was not found originally by us, but was not listed on the primary online business marketplaces.

The Numbers

• Purchase price: $5,950,000

• EBITDA: $1,416,667

• Revenue: $6,159,424

• EBITDA margin: 23%

• Multiple paid: 4.2x EBITDA

The business had steady recurring clients, solid equipment, and a lean team that could run without much daily owner involvement.

How We Structured It

• SBA 7(a) loan: 80 percent of the purchase price

• Buyer equity: 20 percent

• Seller financing: not required

The buyer had priority of best possible purchase price, and was willing to put more down and forgo a seller note in order to get just s 4.2x multiple on this business.

Challenges Along the Way

• Aging fleet of service vehicles: Several vans were nearing the end of their useful life, so we negotiated a seller-funded reserve to cover upcoming replacements.

• Permitting backlog: The company had several large jobs delayed due to city permitting issues. We worked with the seller to resolve the backlog before closing and secured written assurances for the buyer.

• Customer concentration: One commercial client made up nearly 35% of annual revenue. We helped the buyer negotiate a long-term service contract with that client to reduce risk.

What We Did After Close

• Helped transition vendor contracts and introduce the buyer to recurring clients

• Created a dashboard to track performance metrics like labor cost and revenue per job

• Set up bi-weekly coaching calls to walk through the first 90 days of ownership

How It's Going

Six months after closing, the business is running smoothly. The new owner focused first on meeting the team, building trust, and listening to ideas from long-time plumbers and office staff. The key employee who’d considered leaving is now managing a new team of apprentices, thanks to the retention package and a clear growth path.

The owner replaced two aging vans using the reserve negotiated during the sale and is now exploring fleet management software to track maintenance and routing.

Revenue has held steady despite some seasonal slowdowns. The buyer has started marketing to residential customers to diversify from commercial work, reducing the risk of customer concentration. Meanwhile, several delayed city jobs finally moved forward after persistent follow-up.

The owner reports that while there’s still a lot to learn, the business is on solid footing, and he feels confident about continued growth over the next year.

Final Thoughts

This deal worked because the buyer stayed focused, stuck to the process, and had the right team behind him. If you're thinking about buying a business like this, we can help you do it the smart way.