Selling an Electrical Contracting Business: The Brentwood Electrical Company Sale

Electrical contracting businesses sell on how steady and how transferable the work is. A real example from M&A Business Advisors is Brentwood Electrical Company, where M&A Business Advisors represented the seller. Here is what selling an electrical business actually involves.

The deal

Sell-side representation means the firm worked for the owner: pricing the business, running a confidential process, and finding the right buyer, rather than representing the buyer.

How electrical businesses are valued

Like most businesses under $5M, these sell on a multiple of earnings, either Seller's Discretionary Earnings (SDE) for smaller owner-operated shops or EBITDA for larger, management-run companies. The exact multiple varies by the specifics below, so treat any range as a starting point, not a quote.

Electrical contractors commonly trade around 2.5x to 2.7x of SDE for smaller locally-owned shops and roughly 4x to 5x of EBITDA for mid-sized, management-run companies. Recurring service and maintenance work values higher than project-bid work.

What electrical buyers look for

• Service and maintenance work over one-off project bids.
• A diversified customer base rather than reliance on one GC or developer.
• Licensed electricians and a clear plan for who holds the qualifying license after the sale.
• A documented backlog and clean books.

Licensing matters

An electrical license is tied to the entity and its qualified individual, so a buyer usually has to requalify rather than inherit it. That affects both deal structure and timing, so it belongs in the plan early.

Getting ready to sell

Grow the recurring service side, diversify your customers, and make sure the business is not dependent on you personally. Then get a real valuation. I help owners work through all of it.