Chicagoland Asphalt Maintenance, 20-Year Cook County Contractor

$5.3M

Revenue

$2.5M

SDE

5.0x

Multiple

Subscribe Free

Read the full deal writeup

Get Free Access

Already a member? Sign in

Full Editorial Writeup

This is a 20-year-old family-owned asphalt maintenance contractor operating across the Chicagoland market out of Cook County. The company delivers a full menu of pavement services including asphalt paving and repair, sealcoating, hot pour crack filling, line striping and traffic markings, plus catch basin and sewer drainage work. It runs on roughly $5.27M in revenue and a consistent SDE above $2.5M, which is a strong margin profile for a services and maintenance operation of this size.

The revenue base is the interesting part. Around 80% of annual work is repeat business, and the client mix is roughly 90% commercial with 70% of that concentrated in property management and HOA accounts, 20% municipal, and 10% private. Average job size sits near $13,000, so this is a high-volume, relationship-driven book rather than a lumpy project shop dependent on a handful of large bids. That mix produces the kind of recurring, deferred-maintenance demand that keeps crews busy year after year in a freeze-thaw climate that chews up pavement.

The operation is staffed by 16 full-time employees including skilled key personnel who already support ownership at a high level, with low turnover cited. Equipment and vehicles are kept in good condition and are said to carry enough capacity to absorb 10 to 25% growth without new capital purchases. The facility is leased at under $3,000 per month with office plus indoor and outdoor storage, so the buyer inherits the operating footprint without a real estate outlay.

Why we like it

Earnings quality is genuinely strong for the category, with $2.5M SDE on $5.27M revenue, which is roughly a 47% owner-earnings margin. That kind of margin on a services book usually signals real pricing power and disciplined job costing rather than one-time windfalls, and the listing describes SDE as consistently above $2M across years.
The moat here is the client book, not the equipment. About 80% of work is repeat and 70% of the commercial base is property management and HOA accounts, which are sticky, contract-adjacent relationships that reorder sealcoating and crack filling on a predictable cycle. Winning these accounts takes years of reliable performance, so an incoming competitor cannot simply undercut on price.
The market tailwind is durable and geographic. Chicagoland has huge deferred asphalt maintenance needs and a brutal freeze-thaw climate that guarantees recurring pavement degradation, so demand does not evaporate in a downturn the way discretionary spend does. Property managers and municipalities defer, but eventually must fix, which pulls forward future work.
The operator advantage is a functioning management layer plus low marketing dependence. Key employees already run at a high level, turnover is low, and the seller notes very limited to no marketing is required to keep the pipeline full. That means a buyer inherits a machine, not a job, and can focus capital on adding service lines or geographic density.

How to improve it

Convert the 80% repeat relationships into written annual maintenance agreements with scheduled sealcoating and striping cycles. Formalizing recurring revenue de-risks the book, improves forecasting, and directly raises enterprise value at the next sale by making cash flow contractually visible rather than merely habitual.
Push into the underweighted municipal and private segments. Municipal is only 20% of commercial and private is 10%, yet Chicagoland has deep public deferred maintenance budgets and prevailing-wage work, so a dedicated bid function targeting government contracts could add a materially different, recession-insulated revenue stream.
Use the stated 10 to 25% equipment headroom to run a second crew and extend the season. The assets already exist, so the incremental cost is labor and scheduling, which is the fastest path to growing SDE without a capital raise. Track utilization per truck to find the true ceiling.
Install job-level costing and CRM discipline if not already present. With an average job of roughly $13,000 across hundreds of jobs, small margin leaks compound fast, and tracking gross margin by service line will reveal which of paving, sealcoating, striping, or drainage to lean into.
Build a light outbound engine targeting new property management portfolios. Marketing is described as minimal today, which is a strength for stability but a missed lever for growth, so even one dedicated account rep calling on regional PM firms could expand the recurring base meaningfully.
Lock in and extend the lease before close. The current lease expires 12/31/2027 at under $3,000 per month, which is cheap, so securing a long renewal or option protects the low-cost footprint and removes a relocation risk that could disrupt equipment storage and crew logistics.

Diligence notes

Verify the SDE build and owner add-backs against tax returns for three years. The listing leans on absentee-ownership possibility and consistent SDE above $2M, but at a 5x asking price you need to confirm how much of that $2.5M depends on the departing owner's roles and whether a replacement manager salary must be subtracted.
Stress test client concentration inside the 70% property management and HOA bucket. Eighty percent repeat is attractive only if it is spread across many accounts, so pull a customer-level revenue schedule to confirm no single PM firm or a few HOAs represent an outsized share that could walk with a relationship.
Inspect equipment condition, age, and remaining useful life. The pitch that current assets support 10 to 25% growth with no new purchases is a value driver, so an independent equipment appraisal and maintenance-log review will confirm whether near-term capex is truly deferred or lurking.
Confirm labor availability, wage rates, and any prevailing-wage or union exposure. Sixteen full-time employees with low turnover is a stated asset, but validate crew retention plans post-close, check whether municipal work triggers prevailing wage, and assess how tight the local skilled-labor market is for expansion.
Reconcile revenue seasonality and working capital needs. Asphalt work in Chicagoland is weather-bound, so map monthly revenue and receivables to understand cash flow troughs in winter and ensure the deal structure and any seller note (up to 10%) accommodate the seasonal working capital swing.

Source

Originally listed on BizBuySell. View original listing →