Jan 29th (Thu) 9AM NY

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Deal Alert: Premium Residential Roofing Business With Durable Cash Flow

📍 Location: Bay Area, CA (confidential)
💰 Asking Price: ~$1.5M
📈 Avg Revenue (3 yrs): ~$2.1M
📊 Adjusted EBITDA: ~$400K+
🏠 Market: High-end residential roofing & inspections
🔨 Services: Re-roofing, repairs, inspections, gutters, emergency work
🔁 Revenue Mix: Homeowners + real estate inspection-driven jobs
💼 Financing: SBA-friendly / operator-led deal

🌟 Why This Business Is Great:

✔ Long-Standing, Referral-Driven Operation

This is a 20+ year-old roofing company built almost entirely on trust and word-of-mouth.

No paid ads.
No SEO strategy.
No social presence.

In home services, that usually means:

  • Strong reputation

  • Consistent quality

  • A business that didn’t rely on short-term lead gen

Longevity here isn’t cosmetic — it’s operational proof.

This company has survived multiple cycles and still produces steady cash flow.

✔ Premium Customers, Not Price Shoppers

The typical client owns homes valued between $1M and $15M+.

That customer profile matters because:

  • Quality matters more than price

  • Disputes are rarer

  • Referrals are stronger

  • Margins are more defendable

Projects range from $20K to $100K, and the business completes roughly 200 projects per year.

This is not a volume contractor.
It’s a high-ticket, premium service business.

✔ Built-In Stability From Real Estate Work

About 50% of revenue comes from:

  • Real estate inspections

  • Repair work tied to home sales

That creates a stabilizing effect:

  • When discretionary projects slow, transactions still happen

  • Agents need reliable operators under time pressure

This mix smooths demand and reduces reliance on large, one-off projects.

✔ Clean Team Structure (Rare in Roofing)

The business operates with:

  • ~13 W-2 employees

  • Experienced, long-tenured roofers

  • Minimal subcontractor reliance

This reduces:

  • Scheduling chaos

  • Quality risk

  • Compliance exposure

Payroll is clean, systems are simple, and execution is consistent — an underrated advantage in this sector.

✔ Strong Cash Flow Discipline

Financially, the business is well-managed:

  • No supplier debt

  • Net-0 terms with vendors

  • 50% upfront / 50% on completion billing

This structure limits working capital strain and protects downside during slower periods.

🚧 What a Buyer Needs to Underwrite Carefully

Owner Dependency

The owner is still important today:

  • Licensing

  • Relationships

  • Oversight

The positive:
The owner is willing to stay 1–2 years to support transition.

This lowers risk — but reducing owner dependency must be part of the buyer’s plan.

Recent Earnings Softness

There has been some earnings dip in recent years, largely driven by market conditions.

This requires:

  • Normalization

  • Understanding job mix shifts

  • Conservative underwriting

Not alarming — but not something to gloss over.

Licensing & Transition Execution

Roofing in California is regulated.

A buyer must:

  • Properly manage licensing transfer

  • Ensure continuity during transition

  • Avoid operational gaps

This is manageable, but execution matters.

🚀 Where the Upside Comes From

The business is intentionally old-school:

  • Excel, PDFs, QuickBooks

  • No CRM or estimating software

  • No digital marketing

  • Limited geography by choice

  • No weekend availability

These are levers, not flaws.

A capable operator could:

  • Improve job costing and pricing visibility

  • Add basic CRM and estimating tools

  • Expand service area selectively

  • Add light commercial or maintenance work

  • Capture weekend real estate demand

  • Systemize processes to reduce owner reliance

I wouldn’t underwrite aggressive growth — but 1.5–2× revenue over time with stable margins is realistic.

🔍 My Analysis:

This is a long-standing, premium home services business with real customers, clean operations, and steady cash flow, not a hype-driven or marketing-dependent company. The valuation is reasonable for the quality of earnings, especially given the referral-driven demand, strong real estate relationships, and the owner’s willingness to support a multi-year transition. The recent earnings softness and owner involvement need to be underwritten carefully, but both are explainable and manageable with the right operator. The upside doesn’t rely on aggressive growth or big changes — it comes from basic systems, better pricing and job costing, modest geographic expansion, and gradually reducing owner dependency. For an operator or SBA buyer who wants a stable, cash-producing business with clear, low-risk improvement levers, this is the type of deal that quietly works.

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Strategic Growth: Adam's Expansion Plans, Buyout Considerations & SBA Loan Updates [link]

Recent Acquisition Stories:
Blackstone’s $4B Power Move


Blackstone is close to buying MacLean Power Systems for more than $4 billion, according to Bloomberg. MacLean makes the hardware used in power transmission—things like grounding products and anchoring systems that utilities depend on every day. Centerbridge bought the company in 2022, and Blackstone beat out other bidders, including ABB, to secure the deal.

💭 My Take

This is a smart, steady deal. MacLean sells the parts that keep the electrical grid running, and that demand doesn’t go away in a recession. The U.S. grid needs upgrades, and electrification is growing fast. Blackstone isn’t chasing hype—they’re buying a quiet company with predictable cash flow and long-term need.

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-Moran Pober

Founder of Acquisitions.com 

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