Selling your construction business?
Your backlog is worth more than your equipment.

The honest version

What construction businesses actually sell for

Most construction and contracting businesses trade in the range of 3–4.5x adjusted EBITDA, with larger companies and specialty contractors reaching 4–6x. Smaller companies are often priced on seller’s discretionary earnings instead, and the difference between the bottom and the top of the range is rarely about revenue — it is about the quality of your backlog and how much of the business depends on you.

The range is wide because the same business is worth different amounts to different buyers. In this sector you are usually looking at three:

• PE-backed specialty platforms — the most active buyers for electrical, mechanical and other specialty trades with recurring service revenue and real field leadership.
• Regional strategics — established contractors expanding their geography or service lines. They know your market and often move fastest.
• Individual and search-fund buyers — typically for smaller companies, usually with financing contingencies and a slower path to close.

Which of those is at your table changes your number far more than anything in your yard.

What moves the number

The four things buyers actually underwrite

• Backlog quality and how work is won. A backlog of negotiated and repeat work from long-standing customers is priced far above one assembled from competitive bids at thin margins.
• Customer and end-market concentration. A contractor doing most of its volume for one GC or one developer is carrying risk the buyer has to underwrite; diversified, creditworthy customers lift the multiple.
• Management and field leadership. Buyers are pricing whether estimating, project management and the field run without you. A company that is really the owner plus crews sits at the bottom of its range.
• Bonding, safety and prequalification. Bonding capacity, a clean EMR and standing prequalifications with agencies and GCs transfer real capacity to a buyer, and all of it is checked in diligence.

A note on the cycle that costs owners real money: buyers normalize construction earnings across several years, and a single strong year — one big project, one hot market — is not treated as your run rate. Percentage-of-completion accounting also gets rebuilt in diligence, so books that recognize revenue cleanly, job by job, are worth preparing well before you sell.

The process

Why a quiet, competitive process beats the first offer

Most owners in this sector are approached directly, unsolicited, by a platform buyer or a larger competitor. That approach is flattering and it is also the single most expensive letter you can accept, because a buyer negotiating against nobody has no reason to move on price or on terms.

We run the opposite process. Buyers are qualified and under confidentiality agreement before they learn whose business it is. Nothing is listed, advertised, or published. Your staff, your customers, and your competitors learn nothing until you decide they should — and several credible buyers are considering the same opportunity at the same time.

The result is not only a better number. It is better terms: what happens to your team, how long you stay, how the earn-out is structured, and what happens to any real estate.

Common questions

Construction owners ask us these first

What is my construction business worth?

Most construction and contracting businesses sell for between 3 and 4.5 times adjusted EBITDA, with larger companies and specialty contractors reaching 4 to 6 times. Smaller companies are often priced on seller’s discretionary earnings instead. Backlog quality, customer concentration and whether the company runs without you decide where in the range you land, and a confidential valuation will give you a confidential range in writing, based on what buyers are paying now — not an appraisal.

Who buys construction companies?

Three groups: private-equity-backed specialty trade platforms, regional strategic contractors expanding their footprint or service lines, and individual or search-fund buyers for smaller companies. Each values the same business differently, which is exactly why competition among them matters.

Does my equipment add to the price?

Usually the multiple is applied to adjusted earnings with a normal complement of equipment included — the machinery that generates the profit is part of what the buyer is paying for. Owned real estate is handled separately, and genuinely surplus equipment can sometimes be sold separately as well. What buyers will not do is pay a multiple of earnings plus full value for every asset on the list.