Selling a concrete contracting business
Concrete contractors are valued on backlog quality and job costing discipline, not on revenue. Buyers want to see that the company knows its cost per yard and per crew hour, that completed jobs matched their bids, and that the crews and the bonding capacity survive an ownership change.
Written and reviewed by Antoine Campbell. Last reviewed .
Backlog is the asset
A backlog full of low-margin work is a liability disguised as an asset. Buyers reprice it, and they should.
- Signed backlog by job, with contract value, expected margin and completion date
- Historical bid-to-award ratio and where work comes from
- Customer mix: general contractors, municipalities, private developers, residential
- Change order history and how disputes were resolved
The cash cycle in contracting
Progress billing, retainage held until completion, and pay-when-paid terms mean a concrete contractor can be profitable and cash poor at the same time. Working capital requirements swing hard with job mix and season.
A buyer will look at the peak working capital need across the last three years, not the average, and will size the facility to survive the worst month.
Crews, bonding and equipment
Bonding is frequently the transaction constraint. Surety relationships are underwritten to the people and the balance sheet, and a new owner has to re-establish them.
- Crew leaders and their tenure; they carry the productivity
- Bonding capacity, the surety relationship and whether it survives a sale
- Prevailing wage or union obligations where applicable
- Equipment fleet: forms, pumps, screeds, trucks, with ages and liens
- Safety record and the workers compensation experience modifier
Diligence items specific to concrete
- Job cost reports for completed jobs versus original bid
- Work in progress schedule with over and under billings
- Backlog schedule with margins
- Surety letter and bonding capacity
- Equipment list with liens
- Safety and OSHA history
What Maurant needs to evaluate this
- Three years of tax returns and reviewed financials if available
- Work in progress and backlog schedules
- Job costing detail for recent completed work
- Crew roster with tenure
- Equipment list and debt schedule
- Surety and insurance information
When Maurant is not the right buyer
- Contractors with no job-level costing and no work in progress schedule
- Companies dependent on one general contractor for most revenue
- Businesses carrying unresolved construction defect claims
Questions owners ask
- Why do you want work in progress detail?
- Over and under billings are where contractor earnings hide. Without the schedule the profit and loss statement means very little.
- Will my bonding survive a sale?
- It has to be arranged, not assumed. We engage with the surety early because it can gate the timeline.
- Do you buy the yard?
- Where the yard and shop are owned, usually yes; the site is hard to replace.
Sources
Request a confidential seller review
This review is exploratory and does not promise a valuation, financing, offer, or closing.
Start a confidential review