Selling A Plumbing Business | KBS Corporate

Thinking of selling your plumbing business? You will find lots of important information on this page that clarifies what you need to do to achieve a successful exit from your company.

We cover why plumbers choose to sell their business, how to set the right valuation and the steps you should take to make sure everything is properly prepared.

And remember, selling your company is not something you need to do all by yourself. When you join forces with an expert business sales adviser like KBS, you can benefit from the vast experience and knowledge we have built up over 25 years of selling plumbing businesses.

Challenges In The Plumbing Sector

Economic conditions in the UK over recent years have impacted the potential profitability of plumbing businesses, with homeowners increasingly likely to attempt fixes and repairs themselves, helped by online information and video guides, to save money.

This was especially the case during the Covid-19 pandemic, when lockdown protocols gave people more time at home and opportunities to learn new skills such as plumbing.

The pandemic also brought construction to a halt, reducing the chances of plumbing businesses being able to secure new contracts for residential and commercial building projects.

Plumbing companies remain in strong demand though within the acquisitions market as construction activity resurges – with the government having set target numbers to increase the UK’s housing stock annually – and as the economic recovery encourages companies to invest in replacing, upgrading or modernising their plumbing systems.

When Should You Sell Your Plumbing Business?

Selling your plumbing company should not be an overnight decision. The first thing to do is clarify what you would do if you were not running your business – are you ready to retire, relocate or try something different? Whichever of those lifestyle choices you opted for, you would need to make sure the sale of your business provided the capital to fulfil your objectives.

Additionally, it is wise to establish whether market conditions indicate it is the right time to sell a plumbing business. As we have described in the section above, external factors can influence the right moment to test the water, while you may also need time to make sure everything is in place – financially and operationally – to present the business in the best possible light to potential buyers.

Valuing A Plumbing Business To Sell

The valuation of a plumbing business is largely based on its profitability and established revenue streams resulting from contracts, repeat custom, recommendations and effective advertising.

When KBS generates the value of a plumbing business, we typically present the company’s annual earnings before interest, tax, depreciation and amortisation (EBITDA). That equation effectively communicates the true operating value of the business before considering external factors.

You will typically be seeking a multiple of your EBITDA when proceeding with a sale. Although the industry average for plumbing businesses ranges between 4x and 6x, we take pride in maintaining a network of buyers actively competing for the most attractive opportunities.

10 Factors That Affect The Value Of Your Plumbing Business

1 24/7 service: Do you advertise your business as a 24-hour operation? Offering out-of-hours support can set your firm apart from the competition, giving customers faster response times and plumber availability.

2 Eye-catching branding: Ensure you provide a positive image of your business with well-kept vehicles and work clothing that display the company’s logo and contact details, plus an active social media presence.

3 Motivate your staff: Your employees need to be cheerful, professional and respectful when dealing with clients to generate maximum customer satisfaction, and you can also invest in their training for new qualifications.

4 Tick all compliance boxes: Ensure all your plumbers have the correct licences and that your company complies fully with local regulations and building codes to protect from legal issues, fines and penalties.

5 Create a succession plan: You cannot sell a business that would fall apart upon your own exit. Make sure your staff are aware of their responsibilities and delegate new tasks of which they can take future ownership.

6 Recurring revenue: Proving you have reliable, regular revenue streams will not only reduce any risk attached to acquiring your business but also benefit the valuation by contributing to higher multiples.

7 Customer base: A strong, diverse customer base can lead to repeat custom and word-of-mouth recommendations. Commercial contracts are key not only from a revenue perspective, but for potential growth.

8 Company reputation: How positive are your ratings on the leading trade review websites? Ensure you have an appealing Google Business Profile and gently encourage satisfied customers to provide a written endorsement.

9 Sustainability: Offering environmentally friendly services can conserve water, reduce waste and align with customers’ growing preference for sustainable options, thus increasing the appeal of your company.

10 Expand your service range: If you focus on a single aspect of the plumbing sector, consider venturing into a different area – for example heating, ventilation and air conditioning or by providing electrical services.

Finding A Buyer For Your Plumbing Business

With more than a quarter of a century’s experience of selling plumbing businesses, KBS is ideally placed to source the ideal buyer for your company.

We have an unparalleled network of contacts to identify the perfect acquirer who not only has the financial means, experience and ambition to push your business forward, but will also adhere to the boundaries of confidentiality during the deal which are set within the Non-Disclosure Agreement.

The range of buyers we will explore, utilising our bespoke technology platforms and the expertise of our researchers, includes:

Trade buyers We have access to over 4.5million UK companies and data on more than 1.7million M&A transactions, providing us with the ideal platform to ensure your business is presented to the right selection of trade acquirers.

Private equity buyers – Our internal resources and professional network enables us to work closely with private equity houses of various sizes. We have a rich history of achieving PE investments that have far exceeded our clients’ expectations.

Alternative routes – You may have a staff member who is ambitious and ready to take on the responsibility of running a plumbing business themselves. This can be facilitated by way of a Management Buyout, which is among the exhaustive range of options we consider on your behalf.

Expert Support Selling A Plumbing Business

In terms of selling plumbing businesses, we have over 25 years of experience in negotiating transactions and our team of experts has established us as the No 1 mid-market adviser in the UK.

An award-winning one-stop shop for every service you need to successfully sell your company, we provide a unique, tailored approach that incorporates the latest data and state-of-the-art technology to not only identify the perfect buyer but also steers you through each step of the process towards fulfilling your objectives.

Contact us on 0161 258 0118 for an initial no-obligation discussion in complete confidence to find out more about how we can help you to sell your plumbing business

RECENT BUSINESS SALES IN THE PLUMBING SECTOR

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Completed Sale

Greengates Builders Merchants Ltd

A family-owned independent builders merchants has been sold to Haldane Fisher in a deal overseen by Jay Singh, KBS Corporate Finance Director.

Greengates Builders Merchants, located in Accrington, has been trading from its site in Lancashire since 1987 and has grown to employ 18 people from the surrounding area, running three crane offload wagons.

Supplying building and timber materials to trade and DIY customers, Greengates was a natural fit for Northern Ireland-based Haldane Fisher, a builders and plumbers merchants which is expanding its presence in northern England.

Steven Pickup, Managing Director of Greengates, was seeking to retire and instructed KBS to orchestrate a sale – for which Richard Stocks, Senior Research Analyst, quickly saw considerable potential.

“Given the recent consolidation within the builders merchant sector and the strong regional presence Greengates has, we generated significant trade interest in the opportunity,” said Richard.

“This came from companies that already have a North West presence and parties looking to move into the region.

“This has become a market where the scope to expand with the opening of new sites has become more limited, and high-quality independent merchants, such as Greengates, will continue to command strong interest from parties looking to expand their footprint.”

Following a healthy level of interest in the opportunity, Haldane Fisher was identified as the ideal acquirer and Jay Singh presided over a sale that suited both parties particularly well.

“Greengates was a perfect strategic fit for Haldane Fisher, both in terms of product offering and also in terms of location,” said Jay.

“Steven has built up an excellent business with a reputation for holding good stock levels and delivering on time.

“The transaction allows Haldane Fisher to continue with their growth plans and for the shareholder to start their exit journey.”

Steven Pickup is to remain involved with the business for a period post-completion to help with the handover.

“It was a pleasure to advise the shareholders and bring the transaction to a successful conclusion,” added Jay Singh.

acquired by

Greengates Builders Merchants Ltd
Sector: Building Supplies
Location: Lancashire
Buyer: Haldane Fisher

 

Ready to talk about your business requirements?

Give us a call on
+44 (0) 161 258 0118 or contact us now to get started.

Completed Sale
acquired by
Greengates Builders Merchants Ltd

Sector: Building Supplies
Location: Lancashire
Buyer: Haldane Fisher

X
Completed Sale

Midland Pest Control Ltd

Birmingham-based Midland Pest Control has been sold to Nurture Group in a deal overseen by Annie Shiel, KBS Corporate Associate Director.

Midland Pest Control was founded in 2000 and for nearly a quarter of a century has worked with private and commercial clients throughout Birmingham, Wolverhampton and the wider Midlands region.

Retirement was the aim for shareholders Ruth and Steve Hurley, hence their decision to instruct KBS on a sale of the company. The process was comparatively quick with two offers received, the successful bid coming from Nurture Group who had an existing pest control division, Rokill.

With its headquarters in Surrey, Nurture Group also comprises Nurture Landscapes, which specialises in grounds maintenance and plant displays for the corporate and private sectors, and Gavin Jones, provider of landscape construction services to military sites, public open spaces, parks and palaces.

Annie Shiel said obtaining a geographical presence in the Midlands and existing contracts with customers was a main reason for Nurture Group’s acquisition.

“The level of interest generated from potential buyers was healthy and included large trade parties who are known to be acquisitively active in this space,” added Annie. “We quickly secured an acceptable offer with the preferred party.

“The deal process was smooth, and the buyer and shareholders have been fantastic to work with. I enjoyed working with Ruth, and I wish Ruth and Steve all the best for the future.”

acquired by

Midland Pest Control Ltd
Sector: Pest Control
Location: Birmingham
Buyer: Nurture Group

 

Ready to talk about your business requirements?

Give us a call on
+44 (0) 161 258 0118 or contact us now to get started.

Completed Sale
acquired by
Midland Pest Control Ltd

Sector: Pest Control
Location: Birmingham
Buyer: Nurture Group

X
Completed Sale

Hardware Wholesaler

Adam Nelson, KBS Corporate Deal Executive, has advised on the sale of a leading hardware products wholesaler operating across the North West.

Founded in the early 1990s, the Greater Manchester-based supplier’s products include ironmongery, fixings, fasteners and housewares.

The founders of the business instructed KBS on the sale as part of their retirement plans while ensuring the existing workforce and family members would be retained.

Adam quickly recognised the scope of the opportunity, identifying a number of factors which would generate interest from potential buyers.

“I saw great value in the company’s customer-led approach,” said Adam. “The business has created a strong brand and received several accreditations to place themselves ahead of competitors.

“We wanted to find a buyer looking to acquire a majority shareholding in the business while allowing the current directors to gradually step away.”

The successful acquirer is a quality tooling wholesaler based in Yorkshire, providing a foundation for national expansion.

Adam advised: “This sale gives the buyer an opportunity to not only extend their geographical reach, but to enhance their investment portfolio as part of a long-term growth strategy.”

The seller commented on the transaction: “The whole process has been managed very well by KBS, and especially Adam. Regular communication between both parties, as well as the legal and financial teams, has contributed to making this a stress-free process.”

Adam added: “I am satisfied with the outcome as we have achieved a sale that enables the vendor to move towards retirement.

“The eventual acquirer and the seller had a prior professional relationship which made the process move along efficiently. I wish them all the best moving forward.”

acquired by

Hardware Wholesaler
Sector: Hardware
Location: North West
Buyer: Tooling Supplier

 

Ready to talk about your business requirements?

Give us a call on
+44 (0) 161 258 0118 or contact us now to get started.

Completed Sale
acquired by
Hardware Wholesaler

Sector: Hardware
Location: North West
Buyer: Tooling Supplier

Speak to our expert team on 0161 258 0118 to arrange a consultation

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