General contracting encompasses firms that manage residential, commercial, or mixed-use construction and renovation projects, coordinating subcontractors, suppliers, and labor to deliver projects on time and on budget. The industry is highly fragmented at the small and lower middle market level, with the majority of firms being owner-operated and generating under $10M in annual revenue. Demand is driven by housing starts, commercial real estate activity, infrastructure investment, and renovation spending, making the sector sensitive to interest rate cycles and local economic conditions.
Who buys these: Private equity firms targeting construction roll-ups, strategic acquirers such as regional or national contractors, entrepreneurial buyers with construction backgrounds, and search fund operators seeking owner-operator businesses
2.5–4.5×
Typical EBITDA multiple
$1M–$5M
Revenue range
Stable
Market trend
SBA Eligible
7(a) financing available
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Typically targeting companies with $1M–$5M in revenue, 10–20% EBITDA margins, established subcontractor networks, a diversified project backlog, general contractor license transferable to new ownership, and evidence of repeat clients or referral-based pipeline
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Key items to investigate when evaluating a General Contracting acquisition
What buyers typically pay for General Contracting businesses
2.5×
Low Multiple
3.5×
Mid Multiple
4.5×
High Multiple
General Contracting businesses in the $1M–$5M revenue range trade at 2.5–4.5× EBITDA in the lower middle market. Multiple variance is driven by recurring revenue percentage, owner dependency, client concentration, and growth trajectory. Stable demand allows consistent pricing near the midpoint for quality businesses.
Full valuation guide for General ContractingGeneral Contracting acquisitions are SBA 7(a) eligible, meaning buyers can finance up to 90% of the purchase price. This expands the qualified buyer pool significantly and allows first-time acquirers to close with 10% down. Typical SBA terms run 10 years at prime + 2.75%. Sellers are often asked to carry a 5–10% note alongside SBA financing to satisfy the lender's equity requirement.
Typical acquirer profile for this segment
An entrepreneurial individual with construction industry experience, an existing regional contractor seeking geographic or service expansion, or a private equity-backed platform executing a roll-up strategy in the construction sector
What to investigate before buying a General Contracting business
Seller Intelligence
Who sells General Contracting businesses?
Owner-operators aged 55–70 approaching retirement, founders looking to exit after building a regional reputation, and second-generation owners without a succession plan
Typical exit timeline: 12–24 months
General Contracting businesses in the $1M–$5M revenue range typically sell for 2.5–4.5× EBITDA. Typically targeting companies with $1M–$5M in revenue, 10–20% EBITDA margins, established subcontractor networks, a diversified project backlog, general contractor license transferable to new ownership, and evidence of repeat clients or referral-based pipeline
General Contracting businesses typically trade at 2.5–4.5× EBITDA in the lower middle market. The market is highly fragmented with stable demand, which puts pressure on pricing.
General Contracting businesses are SBA 7(a) eligible, making them accessible to first-time buyers. SBA 7(a) loan financing with 10–15% buyer equity injection and seller note for 5–10% of purchase price
Key due diligence areas include: Backlog quality and contract terms including payment schedules, retainage, and cancellation clauses; License transferability and bonding capacity under new ownership; Accounts receivable aging, retainage balances, and billing-in-excess versus costs-in-excess positions; Insurance coverage including general liability, workers' comp, and completed operations tail coverage; Owner dependency — customer relationships, subcontractor relationships, and project management systems.
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