East Valley Commercial Plumbing Company, 19-Year Phoenix Contractor

$4.5M

Revenue

$800K

SDE

3.9x

Multiple

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Full Editorial Writeup

East Valley Commercial Plumbing Company is a commercial and industrial plumbing contractor that has served the Phoenix metro area since 2007. It runs on a team of 28 full-time employees, carries a strong reputation, and works off a base of loyal, repeat customers. The business generates $4.5M in annual revenue with $800k in owner cash flow, a healthy 18 percent SDE margin for a labor-heavy trade services company.

The company operates out of a modest 2,000 square foot leased facility at $3,000 per month, meaning almost none of the value is tied up in real estate. This is a pure operating business built on skilled labor, recurring commercial relationships, and a defensible position in one of the fastest-growing metros in the country. Commercial plumbing is non-discretionary infrastructure work: buildings need water, drainage, and code compliance regardless of the economic cycle.

What stands out is the ownership model. The current owners run it semi-absentee, which means a full crew and some management layer are already in place. For a buyer, that is both an asset and a diligence flag: the infrastructure exists to step in without owning a wrench, but you need to understand who actually holds the customer relationships and estimating function today.

Why we like it

Earnings quality is solid for the trade: $800k SDE on $4.5M revenue is an 18 percent margin, and the 3.94x asking multiple ($3.15M) is right in the fairway for a plumbing contractor of this size. Commercial plumbing tends to generate repeat and referral work rather than one-off retail jobs, which supports the stability of that cash flow.
The moat is the crew and the reputation. A 19-year track record in one metro with 28 full-time employees is hard to replicate quickly, especially when licensed plumbers are scarce and expensive to recruit. Commercial clients (property managers, GCs, facilities teams) stick with contractors who show up and pass inspection.
Phoenix is a structural tailwind. Maricopa County is one of the fastest-growing counties in the US, driving continuous commercial construction, tenant improvements, and building maintenance demand. That population and development trend feeds a plumbing contractor with recurring service and new-build opportunity.
The service is genuinely non-discretionary. Leaks, backups, code violations, and failed fixtures get fixed in any economy because they shut down operations and create liability. This is exactly the boring, essential cash flow that compounds well through cycles.

How to improve it

Map and formalize the customer concentration and estimating function in the first 90 days. A semi-absentee shop often runs on one or two key people who quote jobs and hold relationships; document those, lock them with retention terms, and build a repeatable bidding process so the business is not hostage to a single estimator.
Build a recurring service and maintenance contract book. Convert one-off commercial repair clients into scheduled preventive maintenance agreements for backflow testing, drain cleaning, and fixture servicing, which smooths revenue and raises the exit multiple.
Install real job-costing and scheduling software if it is not already in place. Field service platforms tighten margin leakage on labor and materials, improve dispatch efficiency across 28 employees, and give you the data to price jobs correctly.
Push into higher-margin specialty and industrial work. Backflow certification, medical gas, hydro-jetting, and pipe inspection/lining carry better margins than standard rough-in and repair, and Phoenix's aging commercial stock creates demand.
Add a structured recruiting and apprentice pipeline. Licensed plumber scarcity is the binding constraint on growth in this trade, so building an in-house apprenticeship keeps labor costs down and lets you take on more work without poaching at premium wages.
Reduce owner dependence further and codify the management layer. Since the owners are already semi-absentee, invest in a strong operations manager so the business is fully manager-run, which protects value and sets up a future roll-up or resale.

Diligence notes

Verify the semi-absentee claim in detail. Understand exactly what the owners do, how many hours, and whether they hold key customer or vendor relationships; a business described as semi-absentee that actually depends on the owners for estimating or sales is a very different purchase.
Scrutinize the SDE add-backs and margin. An 18 percent SDE margin is healthy for plumbing, so confirm the $800k reconciles to tax returns and that add-backs are legitimate, not padded with owner perks that a new operator must actually spend.
Assess customer concentration and contract type. Ask for revenue by client and how much is recurring service versus project-based construction; commercial plumbing tied heavily to a few GCs or one property manager carries real risk if those relationships walk.
Confirm licensing, bonding, and workforce stability. Check the AZ ROC license structure, whether it transfers or requires a qualifying party, the status of bonding and insurance, and turnover among the 28 employees and any key licensed plumbers.
Review the backlog, WIP, and receivables. Understand current signed work, work-in-progress accounting, and aging receivables, since commercial trades can carry lumpy cash timing and retention holdbacks that distort the picture of true cash flow.

Source

Originally listed on BizBuySell. View original listing →