How to Value a Construction Contractor or Subcontractor for M&A Purposes

How to Value a Construction Contractor or Subcontractor for M&A Purposes

How to Value a Construction Contractor or Subcontractor for Merger & Acquisition Purposes

Greg Caruso, Esq., CPA, CVA is a valuation expert who valued many construction contractors, subcontractors, and suppliers.  As a business broker, with a strong construction background, Greg has sold many construction contractors, subcontractors, and suppliers.  Greg spent many years working as a project manager and estimator at a large general contractor and was an owner of a speculative homebuilder that delivered 70 homes in peak years.  He combines this background with his accounting and valuation practices to give an up to date primer on what is different and what to look for when valuing contractors for M&A and other purposes.  Greg has valued and sold construction contractors from general contractors and subcontractors such as HVAC, plumbing, electrical, to material suppliers, and to engineering firms.

Want to know more about building value and selling your construction company – Click here to download our book, What’s Your Number? A Contractor’s Guide to Contingency and Succession Planning. 


 

Clients choose Harvest Business Advisors for our sage advice on profitably growing their business, accurate business valuations, and when the time is right, a consistent ability to deliver a high price as part of a smooth exit transaction.

Harvest Business Advisors provides business brokerage, business valuation, and business succession planning services.  We maintain offices in Maryland, New Jersey and Virginia. Connect with us at info@harvestbusiness.com or 877-838-4966 to discuss selling your business, ordering a business valuation or buying a business.

How to Sell Your Business – Types of Buyers, Private Equity Groups (PEGS)

Selling your business is quite complex.  One of the most important things you should understand in order to get the highest business value who your buyer is and what they might want.  PEGS or Private Equity Groups are a viable group of buyers.

Considering Selling Your Business? Please click here for a downloadable e-book, “ 10 Ways to Increase the Value of Your Business“.

Private Equity Groups, also known as PEGS.  PEGS are investment groups.  They want to buy a business – grow it quickly and exit in 5 to 7 years.  For a business to be a fit for them there must be a plan for growth.  Generally, to get into a line of business they are not already in, these Buyers usually want businesses with at least three million dollars of EBITDA.   The first buy in an industry by a PEG is generally called a Platform.  If they are already owners of the same type of business they may buy a smaller competitor.  This is called an add-on transaction.  They will joint venture with Sellers who are willing to sell control.  This can be a good group of prospects if the management wants to buy the business but does not have sufficient capital and the business has very good growth prospects and is fairly large. 

Business brokers and business intermediaries can assist you in finding PEGS and other buyers.  Remember, identify your best buyer and market to them.

Gregory R. Caruso, JD, CPA, CVA
Harvest Business Advisors
www.harvestbusiness.com
gcaruso@harvestbusiness.com

609-664-7955

 

How May We Assist You?