What multiple does an electrical contracting business sell for?

Most electrical contractors trade around 3 to 5 times adjusted EBITDA. Companies with a meaningful service department, signed recurring maintenance agreements, and a management layer sit at or above the top of that band, while pure new-construction subcontractors dependent on a few general contractors sit below it. These are approximate norms and vary by region, size, and deal structure.

What happens to my electrical licence when I sell?

It depends on your jurisdiction and on who holds the qualification. In most places the company operates under a licensed master electrician or qualifying party, and if that is you personally, the qualification leaves with you. Getting a second person qualified takes years because of the hours and exam requirements, so it should be the first item on a preparation plan rather than the last.

Is service work really worth more than construction work?

Yes, and often at a different multiple rather than a slightly higher one. Service and maintenance revenue repeats, carries better margin, and requires less working capital, so buyers underwrite it as durable. Construction revenue ends when the project ends and ties up cash in retainage and underbillings, so it is discounted even when the reported margin looks similar.

Does being a union shop help or hurt the sale?

It mainly determines who your buyer is. Union contractors fit naturally with union platforms and with public and institutional work, while open-shop contractors fit a different set of acquirers. Neither is inherently worth more, but a mismatch is difficult to integrate, so being clear about your labour model early saves time with buyers who were never going to be the right fit.

How to Sell an Electrical Contracting Business

Key takeaways

Electrical contractors generally trade around 3 to 5 times adjusted EBITDA, with service-heavy companies carrying recurring maintenance agreements at the top of the band and new-construction-only subcontractors at the bottom. The licence, the service mix, and whether a project manager can run the work without you are what decide where you sit.

See which buyers are circling your business, free, private

Electrical is one of the trades capital has focused on hardest, because demand is structural rather than cyclical: data centres, electrification, EV infrastructure, and an ageing installed base all need licensed electricians, and there are not enough of them. That has produced a real buyer market for owners of established electrical contractors. It has also produced buyers who know exactly what to look for, which is why preparation matters more than negotiation.

Service work is worth more than construction work

See if active buyers match your business, private buyer-fit check

The most important thing about an electrical contractor, from a valuation standpoint, is the split between service and construction. Service and maintenance revenue is repeat, higher margin, less working-capital intensive, and does not disappear when a project ends. Construction revenue is lumpy, exposed to margin fade, and tied up in retainage. A contractor with 40 percent service revenue and signed preventive-maintenance agreements is a fundamentally different acquisition from one doing the same revenue entirely as a subcontractor on new builds, and the multiple reflects that. If you have a service department, buyers will want to see agreement counts, renewal rates, and revenue per agreement, not just a revenue line.

Revenue split across service, maintenance agreements, tenant improvement, and new construction.
Count and renewal rate of recurring preventive-maintenance agreements.
Gross margin by category, because blended margin hides the story.
Growth lines such as EV charging, controls, low voltage and data, or solar, with their own margins.

Twelve months spent converting completed installations into signed annual maintenance agreements changes what kind of business you are selling, not just how much of it there is.

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The master licence problem

Almost every jurisdiction requires the company to operate under a licensed master electrician or a qualifying party. If that person is you, and there is no one else qualified on staff, then the licence effectively leaves with you at closing. Buyers know this, and it is one of the few issues that can stop a deal outright rather than merely reprice it. The fix takes time, because it depends on someone else accumulating the hours and passing the exam. Owners who are two or more years from a sale should treat this as the first project, not the last. Confirm as well whether your licence transfers on an equity sale in your jurisdiction, because in several it does not.

Backlog, margin fade, and the WIP schedule

For any contractor doing project work, the work-in-progress schedule is the centre of diligence. Buyers compare bid margin against realised margin job by job, look for unapproved change orders sitting in revenue, and check whether overbillings are funding the company. Consistent margin fade tells them your estimating is optimistic and every forward number needs a haircut. Retainage and slow receivables also mean the working capital requirement is far higher than revenue suggests, which is why the working capital peg negotiated at the letter of intent can move the cash you actually receive more than a change in the multiple would.

Labour: the bench, the pipeline, and the agreement

Buyers underwrite an electrical contractor as a labour business. They want journeyman and apprentice counts, tenure, turnover, and whether the apprentice pipeline is real. They want to know whether you are union or open shop, because that determines the buyer pool as much as the cost structure: a union contractor is a natural fit for a union platform and a difficult fit for an open-shop one, and vice versa. They will look at prevailing-wage exposure and certified payroll compliance if you do public work, and at your safety record, because your experience modifier gates the work you are allowed to bid.

Bonding, insurance, and prequalification

If you do bonded work, the surety is a party to your sale in practice if not on paper. Bonding capacity is underwritten on balance sheet strength, work-in-progress quality, and the people running the company, so a change of control triggers a fresh look and does not transfer automatically. Prequalification status with general contractors and public agencies is similar: valuable, but attached to a track record and to named individuals. Bring your surety in early, understand what releases your personal indemnity, and confirm which prequalifications survive a change of ownership. A buyer with a stronger balance sheet can often raise your limits, which is a growth story rather than a problem.

Customer concentration and the general contractor relationship

Electrical subcontractors frequently depend on a small number of general contractors, and those relationships are usually personal. A buyer treats that as customer concentration with an extra layer of risk, because there is no contract behind the relationship, only a bid list. If you cannot diversify before you sell, the practical mitigations are to move the relationships onto your project managers, to document your position on the bid lists that matter, and to accept that part of the consideration will be structured as an earnout tied to those accounts continuing.

Who buys electrical contractors

Private-equity-backed platforms in home services, commercial services, and infrastructure have been the most aggressive buyers, and they pay EBITDA multiples for companies with a management layer, a service department, and clean reporting. Regional strategics, meaning larger electrical or mechanical contractors, buy for geography, licences, and labour, and often pay the most when the fit is exact. ESOPs are common in the trades and reward the workforce, though they rarely maximise headline price. Management buyouts preserve continuity and generally need seller financing. Owners can see how buyers screen the category on the electrical buyer view, or start privately with a buyer-fit check.

The two-year preparation plan

Get a second master electrician qualified so the licence does not depend on you.
Build the service department and convert installations into recurring maintenance agreements.
Produce monthly WIP with job-level margin, and fix the estimating that causes fade.
Promote a project executive who can run operations, then show a year of results without you.
Clean up related-party leases, resolve open claims, and get the fixed-asset register current.

Serava introduces electrical contractors to buyers with a stated mandate, privately and without a public listing. Start with a confidential buyer-fit check if you want to know what your company would attract before anyone finds out you are asking.