Confidential — Acquisition Brief
The Deal Sheet · Feb 2026
Business-Level Analysis — Deal #76
Premier Roofing & Storm Restoration Company - Douglas County, CO
Full acquisition analysis: financials, market context, valuation, risk assessment, and 100-day integration plan.
View Original Listing ↗ Conditional Strong cash flow and market position undermined by severe revenue-multiple disconnect (1.28x), extreme seasonality, and subcontractor dependency. Requires 40% price reduction to justify acquisition economics.
$2.46M
2024 Revenue (trailing) | $3.7M (2024)
Not disclosed
Backlog (Jan '26)
$592K
Est. SDE (24% margin)
1.8x-2.2x
Est. Fair Multiple SDE
$1.07M-$1.30M
Est. Fair Value
01 — Business Overview
At a Glance
Founded 2018, this award-winning roofing contractor serves Colorado's Front Range from a home-based office with 2 employees and a subcontractor network. Specializes in storm restoration, insurance claims, and full exterior services. 35% revenue from organic referrals. Recent performance volatile: $2.5M 3-year avg vs $3.7M in 2024.
4.0
Revenue Quality
Diversified commercial + residential mix with strong recurring base
7.0
Market Position
Las Vegas: extreme heat demand, population boom, construction surge
5.0
Information Quality
Limited public data — full financials behind NDA; requires verification
Key Strengths
- 43% SDE margin ($1.07M disclosed cash flow) demonstrates exceptional operational efficiency
- Award-winning reputation (2024/2025 Roofing Awards) with 35% organic acquisition through referrals
- Asset-light model: home office, no lease, minimal equipment, flexible subcontractor scaling
- Established insurance carrier relationships critical for storm restoration work
- Fragmented market with active M&A consolidation creating strategic buyer pool
Key Questions
- Why does trailing revenue ($2.46M) differ 33% from 2024 revenue ($3.7M)? Which year is normalized?
- What drives the massive asking price (2.95x SDE, 5.3x EBITDA)? Any intangible justification?
- Customer concentration: what % of revenue from top 10 insurance carriers vs direct homeowners?
- Subcontractor dependency: how many crews? What prevents them from going direct post-sale?
- How much 2024 revenue was one-time storm events vs recurring replacement demand?
- What is actual backlog value and contract pipeline heading into 2026?
02 — Financial Analysis
Reconstructed P&L
Estimated Income Statement
| Line Item | Amount | % Revenue | Benchmark |
|---|---|---|---|
| COGS (Materials) | –$982,070 | 40.0% | Industry avg: 40.0% |
| Direct Labor | –$736,553 | 30.0% | Industry avg: 30.0% |
| Gross Profit | $736,552 | 30.0% | Calculated |
| Vehicle / Fleet | –$73,655 | 3.0% | Industry range: 2-5% |
| Insurance (GL, WC, Auto) | –$61,379 | 2.5% | Industry range: 2-4% |
| Office / Admin / Software | –$49,104 | 2.0% | Industry range: 1-3% |
| Marketing | –$24,552 | 1.0% | Industry range: 0.5-3% |
| Rent / Facilities | –$49,104 | 2.0% | Industry range: 1-4% |
| Other Overhead | –$36,828 | 1.5% | Industry range: 1-3% |
| Depreciation | –$9,821 | 0.4% | Industry range: 0.3-0.5% |
| EBITDA (Est.) | $441,930 | 18.0% | Benchmark: 15–20% healthy |
| Estimated SDE | ~$591,930 | 24.1% |
SBA Financing Model
Estimated SDE of ~$591,930 can support SBA 7(a) debt service on a $3,150,000 acquisition. Assuming 10% down ($315,000) and a 10-year term at ~10.5% SBA rates, annual debt service is approximately $459,049. Estimated pre-tax income to owner: ~$132,881+ after debt service.
03 — Working Capital & Seasonality
Cash Flow Reality Check
$319K (13% of revenue)
Est. Working Capital Needed
$447K (May-Aug peak production period)
Peak Capital Requirement
High
Seasonality Risk
Monthly Revenue Seasonality (1.0 = Average Month)
Jan
0.50x
Feb
0.55x
Mar
0.85x
Apr
1.10x
May
1.30x
Jun
1.35x
Jul
1.35x
Aug
1.25x
Sep
1.10x
Oct
0.90x
Nov
0.60x
Dec
0.50x
Cash Conversion Cycle
Days Receivable
40 days
Days Payable
25 days
Net Cash Cycle
15 days
Assessment
Industry avg: 20-30 days (slightly favorable)
Working Capital Recommendations
- Establish Revolving Line of Credit: Secure $150K-$200K revolving LOC before winter to fund Jan-Feb operating expenses when revenue drops to 50% of monthly average. Critical for maintaining subcontractor relationships during slow months.
- Implement Deposit Collection Policy: Require 25-33% deposits on all projects to accelerate cash collection and reduce reliance on insurance claim reimbursements. Compress days receivable from 40 to 30 days through earlier milestone billing.
- Build Cash Reserves During Peak Season: Bank 50% of May-Aug cash flow ($150K+) to create winter operating reserve. Avoid owner distributions beyond $100K during Q2-Q3 to ensure Jan-Feb liquidity without emergency borrowing.
- Develop Off-Season Revenue Streams: Launch gutter/siding maintenance program and insurance inspection services for Nov-Feb to generate $50K-$75K winter revenue. Reduces seasonal cash flow volatility by 20-30%.
04 — Revenue Quality
How Sticky Is the Revenue?
Revenue Breakdown by Type
Storm Restoration (Insurance Claims) (One-Time) 55%
Direct Homeowner Replacements (One-Time) 30%
Referral & Repeat Customers (Repeat) 10%
Ancillary Services (Siding, Gutters, Paint) (One-Time) 5%
Customer Concentration (Est.)
Top 1 Customer
~12%
Top 5 Customers
~30%
Top 10 Customers
~45%
Concentration Risk: Moderate — Storm restoration creates episodic customer concentration when single hail event generates 10-15 simultaneous claims in one neighborhood. Insurance carrier concentration likely higher risk than individual customer concentration.
Revenue Retention Estimate: 15-20% annual repeat rate (roof replacement cycle: 20-30 years). Ancillary services and referrals provide only recurring touch point.
Estimated percentage of revenue retained after an ownership transition, based on industry benchmarks and business characteristics.
Churn Risk Factors
Subcontractor Disintermediation (High likelihood)
Mitigation: Renegotiate subcontractor agreements with non-competes and retention bonuses. Build direct W-2 crew capacity (2-3 installers) to reduce dependency from 100% to 70% within 12 months.
Insurance Carrier Relationship Transfer Failure (Medium likelihood)
Mitigation: Obtain written confirmation from top 5 insurance carriers that preferred contractor status transfers with business sale. Complete 90-day joint transition with owner making introductions to claims adjusters.
Award Reputation Non-Transferability (Medium likelihood)
Mitigation: Maintain quality standards through formalized inspection process. Leverage existing 5-star reviews in buyer's marketing. Apply for GAF Master Elite certification under new ownership to establish independent credibility.
Storm Event Dependency (Revenue Volatility) (High likelihood)
Mitigation: Diversify into commercial maintenance contracts and HOA relationships to create 20-30% recurring baseline revenue. Expand geographic territory to reduce single-market weather dependency.
03 — Valuation Assessment
What's This Business Worth?
Valuation Triangulation
| Method | Low | Mid | High |
|---|---|---|---|
| SDE Multiple (Residential Contractor) | $1,065,474 | $1,183,860 | $1,302,246 |
| EBITDA Multiple (Storm Restoration Premium) | $1,061,784 | $1,326,965 | $1,592,346 |
| Revenue Multiple (Asset-Light Service) | $1,227,588 | $1,350,763 | $1,473,938 |
Blended Fair Value
$1.07M - $1.30M
Premium Factors
Award-winning reputation with organic referral engine
8%
Established insurance carrier relationships
7%
Asset-light, scalable operating model
7%
Discount Factors
6-year track record with volatile revenue history
8%
Extreme seasonality (Jan-Feb at 50% index)
9%
Total subcontractor dependency creates transfer risk
9%
No disclosed recurring commercial revenue stream
7%
04 — Market Context
Market & Comparable Transactions
Colorado roofing market benefits from hail-driven replacement demand and building boom, but faces labor shortages (30K+ construction positions unfilled) and fragmented competition (100K+ U.S. contractors). Douglas County sees flat employment growth and 6.5% unemployment. Active M&A consolidation (Home Depot/SRS, QXO/Beacon, TopBuild/Progressive) signals institutional interest, but commercial platforms command 6-8x EBITDA vs 3-5x SDE for residential contractors.
| Comparable | Revenue | Multiple | Location |
|---|---|---|---|
| TopBuild acquisition of Progressive Roofing | Not disclosed | Mid-market platform acquisition | Regional platform |
| Commercial recurring-revenue roofing platforms (2024-2025 auctions) | $1M-$10M EBITDA | 6x-8x EBITDA (commercial), 3x-5x SDE (residential) | Colorado Front Range |
| Home Depot acquisition of SRS Distribution; QXO acquisition of Beacon Roofing | $18.25B and $11B | Distribution platform level (not comparable) | National |
Bull Case
Storm restoration specialist in hail-prone Front Range with insurance carrier relationships captures episodic revenue spikes. 2024 performance ($3.7M revenue) suggests $4M+ potential under aggressive buyer with expanded geographic reach and insurance agent partnerships. Award recognition and 35% organic acquisition create defensible local moat. Asset-light model scales without lease or equipment capex. Strategic buyer consolidating fragmented market might pay 2.0-2.5x SDE for platform entry.
Bear Case
Revenue volatility ($2.5M avg vs $3.7M peak) signals one-time storm dependency, not sustainable demand. Subcontractor model offers zero barriers: crews can disintermediate post-sale. 6-year operating history lacks recession proof. Asking price (2.95x SDE) assumes commercial recurring premium for one-time residential work. Buyer faces $459K annual debt service against $133K cash after debt—one slow season triggers default. Labor shortage and Colorado's decentralized permitting create operational friction.
06 — Competitive Landscape
Who You're Up Against
40-60+ independent contractors in Douglas County; 10-15 significant regional operators in Castle Rock/Parker/Highlands Ranch market
Est. Local Competitors
Fragmented
Market Structure
Low (<5% local market share) — no major franchise presence observed in Douglas County roofing
Franchise Penetration
Key Local Competitors
| Company | Type | Est. Revenue | Threat Level |
|---|---|---|---|
| Metro City Roofing | Independent | $2M-$4M | Owens Corning Top of House certified with strong Douglas County reputation. Directly competitive on residential replacement and storm restoration. |
| New Roof Plus | Independent | $3M-$6M | Established Front Range operator serving residential and commercial. Broader service mix and likely larger crew capacity creates competitive pricing pressure. |
| Strong Contractors Inc. | Independent | $5M-$10M | Commercial roofing experience with public sector work (Douglas County Justice Center). Potential competitive threat if expanding into residential storm restoration. |
| Interstate Roofing | Independent | $15M-$25M | Denver-based regional platform with 24K+ completed projects and all three top manufacturer certifications. Multi-state scale enables aggressive pricing and faster project turnaround. |
Competitive Advantages
Award-Winning Reputation (2024/2025 Roofing Awards)
Moderate
35% Organic Referral & Search Acquisition
Moderate
Established Insurance Carrier Relationships
Weak
Asset-Light Model with Subcontractor Flexibility
Weak
Moat Assessment
Limited sustainable moat. Awards and reputation create temporary differentiation but lack structural barriers—competitors can match certifications and build similar review profiles within 2-3 years. Insurance relationships transfer uncertainly and offer no exclusivity. Subcontractor model provides cost flexibility but zero proprietary advantage (crews work for multiple contractors). Main defensibility comes from local brand equity in Douglas County market, which is meaningful for 12-24 months post-acquisition but erodes without continuous quality delivery and marketing investment. No recurring revenue, proprietary processes, or switching costs protect against competition.
05 — Risk Assessment
Risk Scores & Due Diligence
5.5
Market Risk
Medium — 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. Revenue Reconciliation & Normalization: Obtain 2022-2025 monthly P&Ls to reconcile $2.46M trailing vs $3.7M 2024 claim. Identify storm event spikes vs baseline replacement demand. Analyze job-level profitability by project type.
- 2. Customer & Insurance Carrier Concentration: Verify top 10 customer % and insurance carrier relationship transferability. Confirm no single carrier represents >20% revenue. Review claims denial rates and carrier performance requirements.
- 3. Subcontractor Agreement Review: Obtain all subcontractor agreements, verify exclusivity clauses, assess crew loyalty risk. Interview top 3 crews regarding post-sale retention. Model cost increase if non-competes required.
- 4. Backlog & Pipeline Validation: Audit current backlog value, signed contracts, and insurance claims in process. Verify 2026 forecast assumptions. Assess how much work transfers vs requires re-bidding post-sale.
- 5. Working Capital & Seasonality Management: Review 12-month cash flow detail showing Jan-Feb survival strategy. Confirm $319K working capital estimate. Model line of credit requirements for winter months.
08 — Transfer Checklist
What Needs to Transfer
$35K-$75K
Total Estimated Transfer Cost
90-120 days
Estimated Time to Complete
90-120 days (parallel track items)
Deal Transfer Checklist
✗
License Colorado General Contractor License (if required by municipality) Critical
Cost: $500-$1,500 Time: 30-60 days Colorado has no statewide contractor license, but many Front Range municipalities require local licensing. Verify Douglas County, Castle Rock, Parker, and Highlands Ranch requirements. Buyer must qualify individually.
✓
License Business Entity Registration & Trade Name
Cost: $200-$500 Time: 2-4 weeks Transfer LLC/Corp to buyer or form new entity. Maintain existing trade name for brand continuity during transition.
✗
Insurance General Liability Insurance ($2M+ coverage) Critical
Cost: $8K-$15K annual Time: 2-4 weeks New policy required under buyer's entity. Obtain quotes pre-close. Confirm coverage includes completed operations for prior work warranty obligations.
✗
Insurance Workers Compensation Insurance Critical
Cost: $5K-$10K annual Time: 2-3 weeks Required for W-2 employees. Verify subcontractors carry own WC coverage and obtain certificates. Experience mod rate starts fresh with buyer.
✗
Insurance Commercial Auto Insurance Critical
Cost: $3K-$6K annual Time: 1-2 weeks Cover all company vehicles and hired/non-owned auto exposure for subcontractor travel to job sites.
✗
Contract Manufacturer Certifications (GAF, Owens Corning, CertainTeed) Critical
Cost: $2K-$5K per certification Time: 60-90 days Buyer must reapply for all certifications under new company. Critical for offering extended warranties and maintaining competitive positioning. 60-90 day approval process.
✗
Contract Insurance Carrier Preferred Contractor Status Critical
Cost: $0-$2K Time: 30-90 days Each carrier has own approval process. Obtain letters from top 5 carriers confirming willingness to work with new owner. Non-transferability is deal-breaker risk.
✓
Contract Subcontractor Agreements & Crew Retention Critical
Cost: $10K-$25K (retention bonuses) Time: 30-60 days Renegotiate all subcontractor agreements with buyer assignment clause, non-compete provisions, and retention bonuses. Meet crews during transition to build relationships.
✓
Contract Customer Contracts & Backlog Transfer Critical
Cost: $1K-$3K (legal review) Time: 2-4 weeks Assign all in-process contracts and backlog to buyer. Obtain customer consent where required. Verify warranty obligations transfer.
✗
Contract Supplier Accounts & Credit Terms
Cost: $0-$5K (credit app fees) Time: 30-45 days Buyer must establish own accounts with suppliers. Seller introduction helps but credit terms reset. May require initial COD purchases until credit approved.
✓
Regulatory Building Permit Applications (ongoing projects) Critical
Cost: $500-$2K Time: 1-2 weeks per permit Transfer or amend all open permits to buyer's license. Coordinate with each municipality. Incomplete permit transfer can halt in-process projects.
✗
Regulatory Sales Tax License Critical
Cost: $0 (no fee in Colorado) Time: 1-2 weeks Register with Colorado Department of Revenue for sales tax collection and remittance. Verify if materials are taxable in Colorado (generally exempt for contractors).
✓
Operational Website, Domain, Social Media Assets
Cost: $2K-$5K (rebranding) Time: 2-4 weeks Transfer domain registration, hosting, Google My Business listing, Facebook/Instagram accounts. Maintain existing URLs to preserve SEO value and 5-star reviews.
✓
Operational Phone Number & Business Email Transfer Critical
Cost: $500-$1K Time: 1-2 weeks Port existing business phone number to buyer's system to maintain customer contact continuity. Forward email for 6-12 months during transition.
✓
Operational Software & Systems Access (CRM, estimating, accounting)
Cost: $1K-$3K (subscription transfers) Time: 1-2 weeks Transfer or migrate all software subscriptions. Obtain training from seller on estimating software, proposal templates, and job tracking systems.
Potential Deal Breakers
- Insurance carrier preferred contractor status non-transferability (deal-killer if top 3 carriers reject buyer)
- Subcontractor crew defection (if 50%+ of crews refuse to work with buyer, business model collapses)
- Manufacturer certification denial (inability to offer extended warranties eliminates competitive positioning)
- Municipal licensing barriers (if buyer cannot qualify for required local contractor licenses)
06 — Post-Acquisition Plan
100-Day Integration Playbook
Transition (Months 1-6)
Ownership Transfer & Relationship Stabilization
Secure subcontractor loyalty, insurance carrier approvals, and customer continuity
- Execute 6-month owner transition with joint site visits and carrier introductions
- Renegotiate subcontractor agreements with retention bonuses and non-compete clauses
- Obtain insurance carrier approvals and confirm preferred contractor status transfers
- Establish line of credit ($150K+) to manage seasonal working capital gaps
Stabilization (Months 7-12)
Operational Foundation & Risk Mitigation
Reduce subcontractor dependency and build direct crew capacity
- Hire 1-2 W-2 lead installers to reduce subcontractor dependency by 30%
- Implement CRM system to track customer lifecycle and automate referral requests
- Formalize inspection and quality control process to protect award-winning reputation
- Develop insurance agent partnership program targeting 10 local agents
Growth (Year 2+)
Revenue Diversification & Geographic Expansion
Add commercial recurring revenue and expand serviceable territory
- Launch commercial maintenance program targeting HOAs and property managers
- Expand marketing budget from 1% to 3% of revenue focusing on insurance agent referrals
- Open satellite presence in Fort Collins or Colorado Springs for geographic coverage
- Pursue GAF Master Elite or CertainTeed SELECT ShingleMaster certifications
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
PASS at $3.15M asking price. Business demonstrates strong operational fundamentals (43% SDE margin, award-winning reputation, asset-light model) but asking price reflects 2.95x SDE—double the 1.8-2.2x fair range for residential roofing contractors. Revenue volatility, extreme seasonality, and total subcontractor dependency amplify transfer risk. SBA debt service ($459K) leaves only $133K annual cash flow, creating zero margin for error. Counter at $1.2M (2.0x SDE) if seller provides audited financials proving sustainable $3M+ revenue, customer concentration <15% top 5, and transferable subcontractor agreements.
Recommended Next Steps
- Request 2022-2025 monthly P&Ls, tax returns, and job-level profitability analysis to reconcile revenue claims
- Obtain customer list with revenue breakdown and insurance carrier relationship documentation
- Review all subcontractor agreements, W-2 employee details, and labor cost structure
- Interview top 5 subcontractor crews to assess post-sale retention likelihood
- Model revised purchase price scenarios: $1.2M (2.0x SDE), $1.5M (2.5x SDE) with seller financing
- Engage Colorado roofing attorney to review license transfers, insurance compliance, and permit requirements
Suggested Offer Structure
$1.2M (2.0x SDE): $240K down, $960K SBA 7(a) at 10 years/10.5%, subject to revenue reconciliation, subcontractor retention agreements, and insurance carrier transfer confirmations. Contingent on 90-day transition period with owner.
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Related Resources
Sources
BizBuySell Listing #2461280 · Douglas County Economic Data (November 2025) · National Roofing Contractors Association Industry Reports · Colorado Construction Labor Market Analysis · Roofing M&A Transaction Comparables (2024-2025)