Construction Business Brokers

Mergers & Acquisitions and Business Brokerage Services for the Construction Industry

Raincatcher’s Partners and Managing Directors have completed over a billion in combined transactions throughout their careers. We offer an investment banking style auction process to lower middle market companies.

Our award-winning team is largely comprised of former small business owners, public accountants, and middle-market investment bankers. Our clients have trusted us to sell over $500M in small and mid-sized businesses.

How We Work With Our Construction Clients

If you’re interviewing M&A advisors and business brokers in search of someone who understands your construction business, has a strong buyer list of investors (including family offices, private equity funds, search funds and entrepreneurs), and has proven experience in closing deals over $100m, then you’re in the right spot.

While we call ourselves industry agnostic, we avoid a handful of industries, such as reimbursement-related healthcare, energy, life sciences, etc. Likewise, our team is very well-versed in a handful of industries. This list includes construction, manufacturing, SaaS, tech, and industrials.

Valuation Specifics for Construction Businesses

Investors in the construction industry have historically bought businesses with the rollup model. This means that they buy a construction company that does at least $5m in annual profit, and then look to buy a number of smaller construction companies in nearby geographies, combine them together, and grow.

There is a wide spectrum of what construction companies sell for. New home construction is a highly cyclical industry and therefore presents a high degree of risk to business buyers. However, companies that focus more on utility and heavy civil construction are less reliant on interest rates and more desirable to buyers. Here is a snapshot of what most construction industry buyers look for:

  • Scale. The larger the better. $10m revenue + to appeal to most private equity groups.
  • Not focused on new construction. Maintenance and repair is a more desirable segment
  • Licensure. Properly licensed and the owner will remain as RMO until a new GM can get licensed
  • Union. Ideally non-union. Union members will be entertained assuming their pensions are well-funded
  • Strong OSHA rating
  • Growing geographic region
The Raincatcher Process

Our Specialized M&A Advisory Auction Process for Construction Companies

Our M&A Process is Specifically Designed to Maximize Transaction Proceeds and Terms for our Clients with $500k+ in Annual EBITDA

Sell-side due diligence

Due diligence is traditionally done by business buyers and not business brokers. However, our comprehensive sell-side process includes a diligence process before we bring a business to market. Learn more about diligence on our M&A consulting post.

Our comprehensive diligence process is designed to drive the highest value for the business owner as buyers know that there won’t be any skeletons in the closet once they submit an offer and start spending money on legal and financial diligence.

Specially designed brokerage or M&A auction process

Depending on the size of your business and industry your company operates in, we may recommend a traditional brokerage process with a listing price. Or, a competitive auction process with buyers submitting the price and terms for negotiation. 

Our buyer list is comprehensive and will be tailored to include (or exclude) and participants in your industry who may make great strategic buyers or who you want to avoid knowing the business is on the market.

Short-listing finalists

It isn’t uncommon for strong, sizable companies to get 5+ indications of interest (soft offers). We’ll then validate those buyer groups, attend dinners where they meet out clients, prepare further data on the business and negotiate the deal terms that buyers will propose in their final offer.

Negotiate LOI terms and facilitate diligence

Once LOI’s have been received from potential buyers we work with our clients to select the most attractive offer before executing the exclusive LOI.

It’s common for diligence to take 60-90 days before closing. This requires a significant time commitment from all parties. Additionally, final deal points are negotiated and contested during this period.

More Construction Resources

If you’re looking to sell your construction company in the coming years, start by reading our how to sell a construction company article.

What Our Clients Have to Say

Request A Consultation

If you’re a business owner and you are currently entertaining selling your business in the coming years, we welcome the opportunity to get introduced to discuss our M&A, Exit planning and Advisory services.

Business Broker FAQs

We aim to provide complete transparency to our clients to help illuminate what can prove to be a complicated process of selling their business.

How Long is the Process to Sell A Business

Most of our clients are lower middle-market companies ($500k – $10M in EBITDA). Clients in this size range typically benefit from a full auction process as it will drive multiple bids for their business. This process takes 7-9 months on average.

The reason we typically opt for a full auction process when selling businesses is that it; does not cap what a prospective buyer is willing to pay, it allows for a thorough marketing process that typically culminates in receiving multiple bids for the business and allows buyers to table a price and structure that they feel comfortable with. We can then work with the seller to short-list final potential buyers, meet with them and decide which offer is most appealing after receiving letters of intent (LOIs).

Is The Selling Process Confidential?

Yes. We make every prospective buyer register with us, sign an NDA and go through a vetting process before they ever see the name of a business that is listed for sale.

We understand the importance of a confidential process and only communicate directly with our client, the business seller. We’ll never call your general business line or speak to any of your employees about the sales process without our clients “okay.”

Furthermore, we will only market your business to a competitor, supplier, customer or other business that you may work with if you “okay” that person from our list of strategic buyers that we work with you to prepare.

How Many Businesses Do You Sell Per Year?

We work as partners or as teams of three on most of our clients deals. On the average year each member of our team will be a part of 4-6 successful closings.

We are able to team up on deals which allows for our team members to fill into the spot of the business selling process that they are best suited for, be it financial analysis and recasting, deal marketing, negotiation, due diligence, etc.

How Do Business Brokers Get Paid?

Like most business brokers, we charge a small retainer when signing a client on, but primarily get paid by charging a success fee that is a percentage of what we are able to sell the business for. This fee varies based on the size of the business, how quickly it will sell, how much preparation work and sell-side due diligence will be required from us, etc.