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

Fred Stoddart Ltd

After a lifetime’s work with the North East’s oldest plumbing contractor, Graeme Gilligan can look forward to a well-earned retirement following his sale of Fred Stoddart Ltd.

Graeme joined the Sunderland-based company in 1977 at the age of 17, but remarkably his 47-year service still represents a mere fraction of the company’s existence.

Fred Stoddart was established way back in the Victorian times of 1870 and over the course of a century and a half it has provided high-quality plumbing services, also adding drain maintenance and the installation and servicing of boilers and solid fuel stoves to its offering.

Over the course of a career in which he has worked for only one company, Graeme literally climbed from the bottom rung of the ladder to the very top – becoming Managing Director, running the business alongside fellow director Steve Grant.

“I started as an apprentice in 1977 and served my time for four years as an apprentice plumber – four days on the tools, one day at college,” explained Graeme.

“I worked on the tools for a while, then Fred Stoddart died in 1985 and two of the older lads who were here eventually bought the company from Fred’s wife, Brenda – she had two sons who had good jobs and weren’t really interested in running a plumbing company.

“Those two older employees ran it for a couple of years, the business started to grow a little bit and they asked me to come in off the tools and help them in the office. In 1994 I was made a director and when those two lads reached retirement age, me and Steve took over in 2011 and we’ve pushed it on that bit further to where we are now.”

Like many business owners, however, Graeme reached a point where he realised the time had arrived to step back and hand the reins to someone new.

He instructed KBS Corporate to facilitate a sale and, with the help of the assigned Deal Executive, Paul Liptrott, a buyer was found in Durham-based DFP Services, which provides a range of maintenance services including fire and security, electrical, gas, plumbing and heating.

Graeme recognised DFP as a suitable fit, along with our work in overseeing the deal, saying: “We had a few enquiries and DFP is a North East company, so I went and had a meeting with them and it seemed a really well-run outfit.

“They do similar things to us and I thought it was an ideal match. I think they will be able to push the company on and modernise it, so everything will be slicker and faster for our customers.

“Paul was excellent, I’d recommend him. He kept us up to date with everything and was available if I ever needed any help. There were a few twists and turns along the way, like there would be in any deal, but we got there in the end.”

Paul Liptrott added: “It was important to find a buyer for Fred Stoddart that had the capability to ensure clients were retained and the business would continue to prosper.

“We believe DFP recognised the company has strong contracts and a workforce with a good reputation for quality of work.”

The transaction process was a collaborative effort as Paul benefited from the help of Guy Haynes, KBS Corporate Director, and Adam Gilbert and Deni Carter of AG Corporate Law with the Heads of Terms and Share Purchase Agreement, as well as Holly Bedford of K3 Tax Advisory.

Paul also praised KBS colleagues Drixie Espiritu, Research Analyst, for providing “exceptional work in identifying buyers” and Carmen Wong, Document Writer, for “exceptional marketing skills which put the business in the best light for the required buyers”.

All those combined efforts meant that, following a handover period, Graeme can look forward to enjoying the fruits of his working life, including spending more time in Portugal.

Everyone at KBS Corporate wishes Graeme a very happy retirement!

acquired by

Fred Stoddart Ltd
Sector: Plumbing
Location: Tyne and Wear
Buyer: DFP Services

 

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
Fred Stoddart Ltd

Sector: Plumbing
Location: Tyne and Wear
Buyer: DFP Services

X
Completed Sale

JAC Electrical Services (UK) Ltd

KBS Corporate clients John and Jeanette Crooks believe JAC Electrical Services UK (JAC) will “continue to thrive under the new leadership” following the sale of their company.

Founded in 2006, St Helens-based JAC has built a strong reputation for excellence in the Quick Service Restaurant (QSR) sector, consistently delivering the high-quality installation, servicing and repair of commercial catering equipment to a diverse clientele including major brands such as McDonald’s, Burger King, Subway, Taco Bell and KFC.

After attracting strong interest from trade buyers and investors, JAC was sold to Mr Sarfraz Khan, a private investor committed to expanding the company’s regional presence.

Sarfraz brings a wealth of experience and a clear vision for the future of JAC, setting the stage for a new era of growth and innovation. With plans to build on the solid foundations and rich legacy established by John and the rest of the team, Sarfraz aims to transform the company into a dominant regional player in the QSR servicing market.

“I am thrilled to embark on this new journey with JAC, a company with a robust legacy and a talented team,” said Sarfraz.

“Our goal is to leverage the company’s strong market position and expertise to drive growth and expand our service offerings across the region. We are committed to maintaining the high standards of service JAC is known for and to nurturing the company’s relationships with its valued customers.”

Under the new ownership, JAC will continue to operate with the same dedication to quality and customer satisfaction. Sarfraz plans to invest in new technologies and sustainable practices to expand the company’s capabilities, ensuring it remains at the forefront of its industry.

John and Jeanette Crooks expressed their confidence in the new owner’s vision for the company.

“We are pleased to hand over the reins to someone who shares our commitment to quality and customer satisfaction,” they said. “We believe JAC is in capable hands and will continue to thrive under the new leadership.”

The transition also promises stability and growth for JAC’s dedicated employees. The new owner has assured the staff of continued support and opportunities for professional development, reinforcing the company’s culture of excellence and loyalty.

Steve Alcock, KBS Corporate Deal Executive, who oversaw the sale, was delighted the transaction had been concluded to the satisfaction of all parties.

“The client was very happy with the overall deal and could see the buyer would look after the business and staff moving forward,” said Steve.

“I really enjoyed working with John and Sarfraz to a successful completion and wish them the best of luck for the future.”

acquired by

JAC Electrical Services (UK) Ltd
Sector: Electrical
Location: Merseyside
Buyer: Sarfraz Khan

 

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
JAC Electrical Services (UK) Ltd

Sector: Electrical
Location: Merseyside
Buyer: Sarfraz Khan

X
Completed Sale

Custom Wytelyne Powder Coating Ltd

A perfect strategic fit was achieved as KBS Corporate oversaw the sale of Custom Wytelyne Powder Coating to a group it already served as a supplier, BAMUK.

Custom Wytelyne was the result of a 1998 merger between two powder coating companies and has become a market leader in its industry, specialising in the preparation, pre-treatment and electrostatic powder coating of steel, aluminium and galvanised products.

Based in Chatham, Kent, the company had an existing connection to its acquirer, BAMUK Group, which also has Contracts Engineering and Furnitubes within its portfolio and invests in businesses focused on manufacturing and the marketing and sale of design-driven products that can be manufactured by group companies.

“Custom Wytelyne was already one of our coating suppliers,” explained Troy Barratt, CEO of BAMUK Group.

“We have two other businesses – one is a manufacturing services company that manufactures other companies’ products, and the other is a street furniture business that uses Custom Wytelyne quite a lot. When we learned the business was up for sale, it made a lot of sense for us to take a good look and it benefits both of our other businesses to have coatings in-house.

“It was very much a strategic decision for us, as opposed to, say, a financial investment or something of that nature. It really makes sense for us to be able to coat our products in-house and to offer the coating service to third-party companies that we manufacture for. It ticked a lot of boxes and made a lot of sense for us to own this business.”

BAMUK, also based in Kent, has ambitious plans for Custom Wytelyne with the target of establishing the company as the undisputed number one in its sector within its region of the country.

“We’ve brought in a highly capable general manager who has decades of experience in coatings to run the business for us,” added Troy.

“Custom Wytelyne was already one of the biggest, if not the biggest, third-party coatings businesses in the South East of England and our plan is to make it definitely the biggest and to offer the best service for industrial coatings in the South East.

“We also have a great team in the office and running the coatings factory which is staying in place, and we are eager to provide a top-class service.”

Troy has posted a five-star review of KBS Corporate’s services on Trustpilot and elaborated on BAMUK’s satisfaction with how the sale had been conducted by Will Griffiths, Corporate Transaction Adviser – with a view to making potential further acquisitions down the line.

“We were really happy with KBS Corporate and Will Griffiths, who did a great job managing the process, getting due diligence organised and keeping both parties onside,” commented Troy.

“The transaction took a bit of time as every deal has twists and turns – this one was no different and I thought Will did a great job managing through that.

“We would absolutely use KBS again, but for the next four to six months the real focus is on getting this business integrated to where we want it before we charge into the next thing too early.”

Will Griffiths, who praised Jai Singh of Alston Asquith law firm for his “incredibly efficient” service, added: “I’m very pleased with the sale. It was a great outcome for both parties involved.”

acquired by

Custom Wytelyne Powder Coating Ltd
Sector: Powder Coating
Location: Kent
Buyer: BAMUK 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
Custom Wytelyne Powder Coating Ltd

Sector: Powder Coating
Location: Kent
Buyer: BAMUK Group

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

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