Before you close on a specialty tile contractor, verify backlog quality, crew stability, and contractor relationships — the three factors that determine whether value transfers with the keys.
Find Tile & Stone Installation Acquisition TargetsTile and stone installation businesses trade at 2.5x–4.5x EBITDA and qualify for SBA financing, but value concentration in the owner's relationships and field expertise creates real post-close risk. A disciplined due diligence process focused on labor continuity, customer diversification, and documented estimating systems separates a scalable platform from a job you just bought yourself.
Normalize EBITDA by removing owner add-backs, verifying job costing accuracy, and segmenting revenue across residential, commercial, and renovation projects to assess margin consistency.
Remove owner compensation, personal expenses, and one-time items. Recalculate EBITDA by project type to identify whether commercial or residential work drives true profitability.
Map trailing three-year revenue by customer. Flag any single GC or developer exceeding 20% of annual revenue as a concentration risk requiring earnout protection.
Review signed contracts, deposit receipts, and scheduled start dates. Confirm estimated gross margins by job against historical actuals to validate forward revenue reliability.
Evaluate field workforce stability, owner dependency in estimating and project management, and whether documented processes exist to sustain operations through ownership transition.
Identify key crew leads by tenure and revenue responsibility. Confirm willingness to stay post-sale and negotiate employment agreements or retention bonuses as a closing condition.
Review labor roster for misclassified subcontractors. Unlicensed or 1099-only crews create IRS liability and workforce continuity risk that can derail SBA loan approval.
Assess whether estimating methodology and job costing exist in written SOPs or only in the owner's head. Undocumented processes are a transition liability requiring immediate mitigation.
Confirm all licenses, bonds, and insurance are current and transferable. Inspect equipment and vehicles for deferred maintenance and review open claims or mechanic's liens.
Verify state contractor licenses, surety bonds, and certificates of insurance are active. Confirm transfer requirements in your state — some require new applications under buyer's name.
Request three years of workers comp loss runs. Open claims or elevated experience modification rates increase insurance costs post-close and may signal unsafe field practices.
Inspect tile saws, mixing equipment, and vehicle fleet for age and deferred maintenance. Budget replacement costs into your offer and confirm no equipment is personally owned by the seller.
Expect 2.5x–4.5x EBITDA. Businesses with diversified GC relationships, documented processes, and stable crew leads command the upper end. Heavy owner dependency pushes multiples toward the low end.
Yes. Tile installation businesses are SBA 7(a) eligible. Typical structures cover 80–90% of purchase price with a seller note of 5–10% and 10–15% buyer equity, subject to cash flow coverage requirements.
Use an earnout tying 15–25% of purchase price to revenue retention from top customers over 12–18 months post-close. Also require the seller to facilitate warm introductions to all key GC contacts before closing.
Owner-dependent operations with no documented estimating process and no crew lead retention plan. If the seller is the sole estimator and client contact, value leaves with them on closing day.
More Tile & Stone Installation Guides
DealFlow OS surfaces targets with seller signals and motivation scores — so you know before you start diligence. Free to join.
Start finding deals — freeNo credit card required
For Buyers
For Sellers