Sell by industry · Construction
Selling your contracting business
How specialty and general contractors are bought, and what the buyers pay for.
Contractors sell for less than their revenue suggests, and the reason is visibility: a buyer cannot see the next twelve months. The sale runs on the backlog, the work-in-progress schedule, the bonding, and the estimators and project managers who bid and run jobs without the owner. The companies that command a premium show all four.
What buyers pay for
In construction, buyers pay a premium for a few things and discount the rest
Every offer is built from the same ledger. One column is what moves a contracting business up the range. The other is what a buyer finds in diligence and takes off the price.
Priced up
- Twelve months of backlog under contract
- Work-in-progress schedules that are right, every month
- Estimators and project managers who bid and run jobs without the owner
- Bonding capacity and licences that transfer with the company
Priced down
- One general contractor or one developer over a third of revenue
- Percentage-of-completion accounting a buyer has to rebuild
- Bonding and licences that follow the owner out of the door
- Margins decided on the estimate, with no history to show they hold
Who is across the table
The buyers who show up for a contracting business, in the order they usually do
Five kinds of buyer exist in every sector. Construction draws some of them more than others, and each one reads your business a different way. A competitive process puts more than one of them at the table, so the terms are set by competition.
Private equity platform
A sponsor-backed platform in your trade, buying companies across a region. Pays for backlog and field leadership, and keeps the owner through a transition.
- Wants
- A durable business to build on with add-on acquisitions.
- Pays
- A market multiple, with rollover equity for a second exit.
Strategic acquirer
A regional contractor adding your trade, your crews, or your territory. The highest price when the fit is real; the brand usually goes.
- Wants
- Your customers, product, or territory added to theirs.
- Pays
- Often the highest price when the fit is real, with synergies priced in.
Private equity add-on
A platform already in your market, adding you for density. Fast diligence, and an earn-out on the backlog converting is common.
- Wants
- A bolt-on to a company they already own.
- Pays
- A multiple close to the platform's, with faster diligence.
Employee ownership is the fourth path in this trade: a sale to an ESOP, at a price set by an independent valuation, which runs on its own rules and its own timeline.
The published multiple
What buyers have paid for construction businesses
This is the median its source published, not a FNDRS estimate. It is on owner earnings, not on EBITDA like the typical range above, so the two do not compare directly. The ledger is what moves a sale inside and beyond it.
0.00
x
owner earnings was the median multiple paid for construction businesses sold on BizBuySell from 2021 to 2025.
BizBuySell, Construction Business Valuation Multiples & Financial Benchmarks (businesses sold 2021–2025)
How the sale runs
Four phases, and what diligence reads first in construction
Selling a contracting business follows the same path as every FNDRS sale: the Go-To-Market Analysis, then four phases, prepare, market, select, and close. What changes in construction is what the buyer's diligence reaches for first.
Diligence reads first
- Backlog under contract, by job, with the margin on each
- Work-in-progress schedules and the percentage-of-completion accounting behind them
- Bonding capacity and licences, and who they are tied to
- Concentration by general contractor, developer, or owner, and the contracts behind it
The GTMA and the four phases
- Before the saleThe Go-To-Market AnalysisA buyer's read of the business, with your CPA in the room
- Phase oneGo-to-market preparationThe financials and the materials a buyer will read
- Phase twoMarket launch and offersBuyers under NDA, and the offers by one date
- Phase threeMeetings and final selectionThe shortlist, the counter-offers, one letter of intent
- Phase fourDiligence and closeThe buyer checks everything, and the money moves
The terms
The deal terms a contracting business is most likely to see
The headline number is one line of a term sheet. These are the terms that come up most often when a contracting business is sold, what each one means, and how it tends to be used in construction.
- Earn-out
Part of the price paid later, if the business hits agreed targets after close.
In construction. Tied to the backlog converting to revenue and margin after close. Twelve months of backlog under contract shrinks it.
- Working capital peg
The normal level of working capital the buyer expects to be left in the business at close.
In construction. Set on the trailing average. Underbillings, overbillings, and retainage are where the argument is.
- Escrow and holdback
Part of the price held back for a period to cover claims under the purchase agreement.
In construction. Held against warranty claims and the jobs in progress at close.
What owners are told
Three things owners in construction hear, and what buyers actually do
Each one is common enough to have cost a founder money. Open a row for the correction.
MythHide fact
Buyers pay for revenue.
FactBuyers pay for revenue they can see coming. The same revenue with a twelve-month backlog and without one sells at two different multiples.
MythShow fact
The bonding comes with the company.
FactBonding follows the people the surety underwrote, usually the owner. A buyer needs to know the capacity transfers, and the surety decides.
MythShow fact
An ESOP is a last resort.
FactAn ESOP is a sale to a buyer that already knows the company, at a price set by an independent valuation. It runs on its own rules, and for some contractors it is the best offer on the table.
Construction
Construction owners on working with FNDRS
Short testimonials from owners who went through the FNDRS process. Most are under two minutes.
The FNDRS Podcast · Construction
Construction business owners on The FNDRS Podcast
Milo and Barbara Fernandez, Davin Works
Deals the FNDRS M&A team has advised on
What positioning, process, and structure did for three founders
Each went to market with a story built for it and more than one buyer at the table. The companies are not named.
Advised by members of the FNDRS M&A team, including at prior firms
Roofing
A roofing company in Texas
A technology-enabled operator with about $6 million of EBITDA
Sold at9.5xEBITDA
- 40%
- equity the founder rolled
- 3
- offers above 9.0x
- The situation
- A residential roofer serving major Texas metros, with about $6 million of EBITDA going to market, strong crew retention, and steady referrals. The founder was not done building, but wanted to take risk off the table and add institutional firepower. After testing third-party CRMs, the company had built its own platform, which automated estimating, supplier ordering, and delivery of materials to the job site.
- The approach
- Ahead of launch, that software cut overhead and the reliance on admin and production specialists, and gross margins improved. The company went to market as a scalable, technology-enabled roofing platform, not as a contractor, in a focused process among private equity firms with a thesis in exterior services.
- The outcome
- Three offers came in above 9.0x EBITDA and several more above 8.0x. The company became the founding platform of a new investment at 9.5x, roughly 2.5x above the top of the industry's multiple range at the time. The founder rolled 40 percent into the new company and continues as CEO with a board seat; the rest was cash at close, with capital committed for add-on acquisitions across the Sun Belt.
Advised by members of the FNDRS M&A team, including at prior firms
Read the dealRoofing
A roofing company in Missouri
80 percent residential, 20 percent commercial
Sold at7.2xEBITDA
- 8
- letters of intent
- 5
- groups in management meetings
- The situation
- Exceptional standard operating procedures and operational discipline, a healthy mix of retail and insurance work, and margins that had held. It was ready for market.
- The approach
- Positioned on durable margins, process maturity, and a stable revenue mix, in a highly competitive, tightly managed process.
- The outcome
- Eight letters of intent, five groups through to management meetings, and a final price of 7.2x EBITDA. The founder chose a long-standing private equity platform in roofing, for its culture and its long-term vision.
Advised by members of the FNDRS M&A team, including at prior firms
Read the dealRoofing
A roofing company in Minnesota
About $4.0M in EBITDA, after storm years of $5.5M to $6.5M
Sold at6.5xEBITDA
- $4.0M
- normalized EBITDA
- Rollover
- a second bite of the apple
- The situation
- Storm-heavy years had produced $5.5M to $6.5M in EBITDA. The year of the sale was a normal one, about $4.0M, with some pressure on margins.
- The approach
- The normalization discussions with buyers were managed closely, and the deal was structured so the buyer's incentives and the owners' pointed the same way.
- The outcome
- It closed at 6.5x, above prevailing averages. The owners rolled equity into the new company: a second bite of the apple. On the sponsor's growth plan, the second sale may pay out more than the first, creating generational wealth for the ownership group.
Advised by members of the FNDRS M&A team, including at prior firms
Read the deal
Not ready to sell yet
Scale the contracting business first, then sell it for more
The valuation playbook for construction reads the same market from the other side: the value gap in numbers, the element buyers weigh first, and the order of work that closes the gap before you go to market.
Selling a contracting business? Start with a conversation
The playbook gives the range. The deal team gives the number, the buyers who will show up, and the terms to expect.