Confidential — Acquisition Brief The Deal Sheet · Feb 2026
Business-Level Analysis — Deal #107

El Paso Residential Plumbing Service Company: $1.15M Revenue Offered at 1.10x Reported SDE

Full acquisition analysis: financials, market context, valuation, risk assessment, and 100-day integration plan.

View Original Listing ↗
Conditional Asking $265,999 is 1.10x reported SDE of $241,632, versus 2.7–3.4x for Texas comps. The price is compelling but unexplained. Proceed only after tax-return verification and a secured Master Plumber (RMP).
$1,150,629
2024 Revenue
$241,632 reported
Est. SDE (Est. $327,113 benchmark reconstruction)
1.8x–2.8x
Est. Fair Multiple SDE
Est. $381,674–$579,471 (blended); asking $265,999
Est. Fair Value
01 — Business Overview

At a Glance

El Paso residential plumbing repair and maintenance firm, established 2001. It has 8 full-time staff and $1.15M revenue at a 21.0% reported SDE margin. The lease, equipment, and RMP status are not disclosed.

5.0
Revenue Quality
Diversified commercial + residential mix with strong recurring base
6.0
Market Position
Las Vegas: extreme heat demand, population boom, construction surge
3.0
Information Quality
Limited public data — full financials behind NDA; requires verification

Key Strengths

  • 25-year operating history (est. 2001) in a non-discretionary, urgent-demand category
  • Reported SDE margin of 21.0% ($241,632 / $1,150,629) is healthy for residential service
  • Asking price of 1.10x SDE and 0.23x revenue sits well below the 2.7x El Paso comp
  • Management-oriented model: owner is not described as performing service calls
  • Short est. 10-day cash conversion cycle limits working capital strain
  • Clear organic levers: added technicians, extended hours, and a maintenance-agreement program

Key Questions

  • Who is the Responsible Master Plumber (RMP) on the TSBPE registration, and will that person stay after close?
  • Why is the business priced at 1.1x SDE when local comps trade at 2.7x? What is excluded from the sale?
  • Do 3 years of tax returns support the $241,632 SDE? What add-backs make up that figure?
  • Are vehicles, tools, and inventory included? What are their age and condition?
  • What are the lease terms, remaining term, and assignability of the shop or facility?
  • How much revenue comes from home warranty companies or property managers versus direct homeowners?
  • What do service guarantee and callback costs run as a percentage of revenue?
02 — Financial Analysis

Reconstructed P&L

Estimated Income Statement
Line Item Amount % Revenue Benchmark
COGS (Materials) –$414,226 36.0% Industry avg: 36.0%
Direct Labor –$391,214 34.0% Industry avg: 34.0%
Gross Profit $345,189 30.0% Calculated
Vehicle / Fleet –$34,519 3.0% Industry range: 2-5%
Insurance (GL, WC, Auto) –$28,766 2.5% Industry range: 2-4%
Office / Admin / Software –$23,013 2.0% Industry range: 1-3%
Marketing –$11,506 1.0% Industry range: 0.5-3%
Rent / Facilities –$23,013 2.0% Industry range: 1-4%
Other Overhead –$17,259 1.5% Industry range: 1-3%
Depreciation –$4,603 0.4% Industry range: 0.3-0.5%
Est. Net Profit $202,510 17.6% $345,189 GP − $142,679 overhead
Add-Back: Owner Salary $120,000 10.4% Standard add-back for $500K–$2M revenue
Add-Back: Depreciation $4,603 0.4% Non-cash
EBITDA (Est.) $207,113 18.0% Benchmark: 15–20% healthy
Estimated SDE ~$327,113 28.4%

SBA Financing Model

Estimated SDE of ~$327,113 can support SBA 7(a) debt service on a $265,999 acquisition. Assuming 10% down ($26,600) and a 10-year term at ~10.5% SBA rates, annual debt service is approximately $38,764. Estimated pre-tax income to owner: ~$288,349+ after debt service.

03 — Working Capital & Seasonality

Cash Flow Reality Check

$126,569
Est. Working Capital Needed
$177,197
Peak Capital Requirement
Low
Seasonality Risk
Monthly Revenue Seasonality (1.0 = Average Month)
Jan
0.85x
Feb
0.85x
Mar
1.00x
Apr
1.05x
May
1.10x
Jun
1.10x
Jul
1.05x
Aug
1.00x
Sep
1.00x
Oct
1.00x
Nov
0.95x
Dec
0.85x

Cash Conversion Cycle

Days Receivable
30 days
Days Payable
20 days
Net Cash Cycle
10 days
Assessment
Healthy — short cash cycle

Working Capital Recommendations

  • Finance Working Capital in SBA Loan: Roll ~$125K of WC into the 7(a) loan to avoid a cash squeeze in the first 90 days, when the seller's AR is excluded.
  • Collect at Completion: Est. 30-day DSO is high for residential work. Require card or ACH payment on site to cut DSO to under 10 days.
  • Extend Supplier Terms: Negotiate net-30 with supply houses to stretch DPO from 20 to 30 days. This frees Est. ~$11K of cash.
  • Build a Winter Reserve: Set aside cash from May–July peak months to cover Dec–Feb, when revenue runs ~15% below average.
04 — Revenue Quality

How Sticky Is the Revenue?

Revenue Breakdown by Type
Est. Service & emergency repair calls (Repeat) 50%
Est. Water heater & fixture replacement (One-Time) 25%
Est. Drain & sewer cleaning (Repeat) 20%
Est. Maintenance agreements (Recurring) 5%

Customer Concentration (Est.)

Top 1 Customer
~10%
Top 5 Customers
~25%
Top 10 Customers
~35%
Concentration Risk: Moderate — The homeowner base is likely diffuse. However, a single home warranty or property manager account could sit near 10% of revenue, so verify by channel.

Revenue Retention Estimate: Est. 30–40% of annual revenue comes from repeat customers. This is unverified, and the listing gives no repeat-booking data.

Estimated percentage of revenue retained after an ownership transition, based on industry benchmarks and business characteristics.

Churn Risk Factors

Technician departures taking customers or reputation with them (Medium likelihood)
Mitigation: Retention bonuses vesting over 12 months, non-solicit agreements, and a competitive pay review
Loss of seller relationships and goodwill after transition (Medium likelihood)
Mitigation: 90-day paid transition, joint customer communications, and seller note tied to performance
Review-driven competitors (Liberty, Union) capturing search share (High likelihood)
Mitigation: Systematic review requests, Google LSA investment, and response-time guarantees
Home warranty or property manager contract termination (Low likelihood)
Mitigation: Confirm contract assignability and meet key accounts before close
03 — Valuation Assessment

What's This Business Worth?

Valuation Triangulation
Method Low Mid High
SDE Multiple (reported $241,632 × 1.8x / 2.3x / 2.8x) $434,938 $555,754 $676,570
EBITDA Multiple (Est. $121,632 = SDE − $120K GM × 3.0x / 3.5x / 4.0x) $364,896 $425,712 $486,528
Revenue Multiple ($1,150,629 × 0.30x / 0.40x / 0.50x) $345,189 $460,252 $575,315
Blended Fair Value
Est. $381,674 (low) / $480,573 (mid) / $579,471 (high), a simple average of the three methods. Asking price of $265,999 is 45% below the blended mid.

Premium Factors

25-year operating history and local brand equity
7%
Essential, non-discretionary demand
8%
Management-oriented owner role
6%
Short cash conversion cycle (Est. 10 days)
6%
Asking price well below comps (1.10x vs. 2.7x SDE)
8%

Discount Factors

Unverified financials; EBITDA not disclosed
8%
RMP licensing dependency unknown
9%
Lease and equipment not disclosed
7%
Minimal recurring or maintenance-agreement revenue
6%
Tight plumber labor market and technician retention risk
7%
Generic, templated listing description
5%
04 — Market Context

Market & Comparable Transactions

El Paso per-capita income is projected at ~$49.4K in 2025 (+5.2%), with commercial activity above $20B. Unemployment may rise to 4.9% in 2026. The market has 17 active city plumbers and is highly fragmented nationally.

ComparableRevenueMultipleLocation
Established 25+ year residential plumbing business$814K (est.)2.7x SDEEl Paso, TX
30+ year commercial plumbing & HVAC company$738K (est.)3.4x SDEWilliamson County, TX
Drain cleaning, camera inspection, and trenchless sewer specialist acquired for geographic expansion$2,420,000Not disclosedTexas

Bull Case

Returns confirm ~$240K SDE. Buyer closes at ~1.1x, adds 2 technicians and a maintenance-plan program, and lifts revenue to Est. $1.5M and SDE to Est. $330K in 24 months. Exit at 3x+ to a PE platform.

Bear Case

Seller is the RMP and rainmaker. Technicians leave, revenue falls 30% to ~$805K, and SDE drops to Est. ~$120K. After a $120K GM salary and $38,764 in debt service, cash flow is about −$39K.

06 — Competitive Landscape

Who You're Up Against

17–25+ (17 verified active providers in El Paso; 50–75+ in the broader region)
Est. Local Competitors
Fragmented
Market Structure
Low. National franchises hold under 10% share. Mr. Rooter (Neighborly/KKR) and Roto-Rooter are active locally, and PE platforms are expanding in Texas.
Franchise Penetration
Key Local Competitors
Company Type Est. Revenue Threat Level
Liberty Plumbing Independent Est. $3M–$6M High: 541 reviews at 5.0★; multi-crew, high-volume operation
Union Plumbing Independent Est. $3M–$6M High: 634 Google reviews at 4.9★; fleet-style operation
Sun City Plumbers Independent Est. $1.5M–$3M Medium-High: 455 reviews at 5.0★; well established
Mr. Rooter Plumbing of El Paso Franchise Est. $2M–$4M Medium: 1,354 reviews; Neighborly brand and marketing scale
Roto-Rooter Franchise Est. $3M–$5M Medium: 823 local reviews; national brand and 24/7 drain focus

Competitive Advantages

25-year local operating history and brand recognition
Moderate
Service guarantee and customer-follow-up process
Weak
Established licensed technician team
Moderate
Management-layer operating model not dependent on owner labor
Moderate

Moat Assessment

Narrow moat. Brand tenure and the technician team are the main assets. Guarantees are easily copied, and review leaders out-scale the business. Value rests on execution, not structural barriers.

05 — Risk Assessment

Risk Scores & Due Diligence

8.0
Market Risk
Low — HVAC is essential in Las Vegas
3.0
Operational Risk
High — Labor + owner dependency unknown
5.5
Financial Risk
Medium — Estimated financials only

Due Diligence Priorities

  • 1. Earnings Verification: Reconcile $241,632 SDE to 3 yrs tax returns and bank deposits. The benchmark reconstruction (Est. $327,113) exceeds reported by $85,481, so actual costs likely run above benchmark.
  • 2. RMP and TSBPE Registration: Identify the Responsible Master Plumber. If it is the seller, secure a replacement RMP or a seller consulting agreement before close.
  • 3. Pricing Anomaly: Determine why the business is priced at 1.10x SDE. Confirm what is included (vehicles, tools, inventory, AR) and whether liabilities, liens, or pending claims exist.
  • 4. Technician Roster: Obtain license levels, tenure, pay, and productivity per tech. Confirm stay intentions and any non-solicit agreements for all 8 employees.
  • 5. Unit Economics: Pull call conversion, average ticket, callback/warranty rate, and guarantee costs from dispatch software for 24 months.
  • 6. Lead Sources and Channel Mix: Quantify home warranty, property manager, and direct revenue. Confirm ownership of phone numbers, website, and Google Business Profile.
08 — Transfer Checklist

What Needs to Transfer

Est. $35K–$60K in year-one insurance and fees, excluding RMP salary
Total Estimated Transfer Cost
60–120 days
Estimated Time to Complete
Deal Transfer Checklist
✗
License Responsible Master Plumber (RMP) designation Critical
Cost: Est. $75K–$95K/yr if hired Time: 30–90 days Individual license. If the seller is the RMP, a replacement is required before operating.
✗
License TSBPE plumbing business registration Critical
Cost: Est. <$500 Time: 2–4 weeks New owner completes a separate business registration tied to the RMP
✓
License Technician licenses (journeyman, tradesman, apprentice) Critical
Cost: $0 Time: Immediate Licenses stay with individuals. Value transfers only if techs stay.
✗
Insurance General liability policy meeting TSBPE minimums Critical
Cost: Est. $10K–$18K/yr Time: 1–2 weeks Confirm current minimums directly with TSBPE
✗
Insurance Workers' compensation Critical
Cost: Est. $12K–$20K/yr Time: 1–2 weeks Texas allows non-subscription, but coverage is recommended for 8 field staff
✗
Insurance Commercial auto fleet policy Critical
Cost: Est. $8K–$15K/yr Time: 1–2 weeks Requires vehicle titles and driver MVRs
✓
Contract Facility lease assignment Critical
Cost: Est. $500–$2K legal Time: 2–6 weeks Lease not disclosed. Landlord consent likely required.
✗
Contract Supply house accounts and credit terms
Cost: $0 Time: 2–3 weeks New credit applications under the buyer entity
✓
Contract Home warranty and property manager agreements
Cost: $0 Time: 2–8 weeks Verify existence and assignment clauses
✗
Regulatory Texas Comptroller sales tax permit and franchise tax account
Cost: Est. <$300 Time: 1–3 weeks New entity registration. Verify the residential repair tax treatment.
✗
Regulatory City of El Paso permit accounts and backflow tester registration
Cost: Est. <$500 Time: 2–4 weeks Permits pulled under the RMP; check open permits for liability
✓
Operational Phone numbers, website, and Google Business Profile Critical
Cost: $0 Time: 1–2 weeks Primary lead source. Must convey at close.
✓
Operational Vehicles, tools, and inventory Critical
Cost: Est. $1K–$3K title fees Time: 1–2 weeks Not disclosed in the listing. Confirm inclusion, condition, and liens.
✓
Operational Field service software and customer database Critical
Cost: Est. $0–$2K Time: 1–2 weeks Confirm data export and account ownership

Potential Deal Breakers

  • No RMP solution in place at closing
  • Tax returns fail to support SDE of at least ~$200K
  • Key licensed technicians decline to stay
  • Phone numbers, web domain, or Google profile not conveyed
06 — Post-Acquisition Plan

100-Day Integration Playbook

Days 1–30
Stabilize
Protect revenue, licensing, and team continuity.
  • Activate RMP and new TSBPE business registration
  • Meet each technician; deliver retention bonuses
  • Transfer phones, website, and Google profile
  • Shadow seller on dispatch and pricing
Days 31–90
Measure
Install KPI visibility across the operation.
  • Implement or clean up field-service software
  • Track conversion, ticket, and callbacks weekly
  • Audit pricing against the flat-rate book
  • Review vendor terms and material margins
Months 4–9
Build Recurring Revenue
Launch a maintenance agreement program.
  • Offer annual water heater/drain plan at ~$15/mo
  • Target 300 members from the existing customer list
  • Raise marketing from 1.0% to 2.5% of revenue
Months 10–18
Scale
Add capacity and extend coverage.
  • Hire 2 technicians plus 1 apprentice
  • Pilot extended and emergency hours
  • Expand to east El Paso and Horizon City

Value Creation Waterfall (3-Year Outlook)

Acquisition Price
$2.2M
+ Organic Revenue Growth (15%/yr)
+$2.1M Rev
+ Margin Expansion (to 20% EBITDA)
+$250K EBITDA
+ Multiple Expansion (3.5x → 5.5x)
+$2.0M uplift
Est. Enterprise Value (Year 3)
$5.5M – $7.0M
07 — Final Recommendation

Our Verdict

Verdict: Conditional — Proceed to LOI

Conditional. Price gives a wide safety margin (DSCR 3.14x after a $120K GM salary), but the discount to comps is unexplained. Verify SDE via returns and lock in RMP and technician retention pre-close.

Recommended Next Steps

  1. Sign NDA and request 3 yrs tax returns, P&Ls, and bank statements
  2. Request asset list, vehicle titles, and lease copy
  3. Confirm RMP identity and TSBPE registration status
  4. Ask broker why the price is 1.1x SDE and what is excluded
  5. Engage SBA lender for pre-qualification with WC included
  6. Interview top technicians before LOI exclusivity ends

Suggested Offer Structure

$250,000: $225,000 at close (SBA 7(a)) plus a $25,000 seller note on standby. Contingent on tax-return SDE ≥ $220K, RMP continuity, and a 90-day seller transition.

View Original Listing on BizBuySell ↗

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Related Resources

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SBA Loan Calculator
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Sources

BizBuySell listing #2546594 (Next Biz Owner, Linda Moore) · Texas State Board of Plumbing Examiners (TSBPE) · U.S. Bureau of Labor Statistics, Plumbers & Pipefitters outlook · El Paso regional economic forecast (2025–2026) · Google and ServiceAgent reviews for El Paso plumbing providers · Industry benchmark cost data for residential plumbing