You Have Two Companies. You're Selling Them as One.
You run two businesses out of one truck yard. One puts pipe in the ground on new construction and remodels, bids against three other shops, and lives or dies on the schedule. The other answers the phone when a water heater quits at six in the morning and charges what the moment is worth. They share a name, a building, and a single line on your tax return. To a buyer they are not the same company, and they are nowhere near the same money.
Most owners have never separated the two, because there was never a reason to. The service book grew on its own out of past installs and word of mouth, it throws off cash, and nobody ever sat down and asked what it would fetch as a standalone asset. Then a buyer shows up and does exactly that, and the number surprises everyone in the room.
The market prices service and project work differently, and it isn't close
Look at how these deals actually clear. Advisors who broker home-services acquisitions put service-heavy plumbing shops at roughly 5 to 7 times earnings, while shops carrying a lot of new-construction subcontract work trade closer to four to five, and the underwriting gets a cyclicality haircut on top of that when project revenue runs past 60 percent of the total. BizBuySell's valuation benchmarks tell the same story from the margin side. Service and repair runs a gross margin in the high thirties to low forties. New-construction plumbing runs in the twenties to low thirties, sometimes tighter once a bad bid works through.
The reason is durability, not sentiment. A recurring service book keeps producing when construction stalls. It doesn't answer to one general contractor's draw schedule or one developer's financing. When the phone rings because a drain backed up, the customer is not shopping three bids, and the work is non-discretionary. A buyer will pay a premium for revenue that behaves like that, and will discount revenue that stops the day a project ends.
The buyers circling your phone book know exactly what it's worth
You are not imagining the increase in unsolicited calls. Private equity add-on activity aimed at home-services trades jumped sharply through the middle of 2025, with one tracker putting the year-over-year rise near 90 percent. The platforms doing the buying are not small. Apex Service Partners, backed by Apollo at a reported $10 billion, had rolled up more than a hundred brands by early 2026 and closed roughly sixty add-ons in 2025 alone. Goldman Sachs Alternatives put an institutional name behind the space when it bought the multi-trade platform Sila Services at a reported $1.7 billion.
What are they actually buying at those prices? The recurring service agreement. One advisory shop called it the closest thing the trades have to a software subscription, and that is precisely how it gets underwritten. Contracted maintenance plans, the customers who call you first, the replacement work that comes captive off decades of installs. That is the asset. The install crew is often something a buyer tolerates to get the service book, not the reason they wrote the check.
The demographics keep the pressure on. The average plumbing-business owner is now past fifty-eight, and most have nothing written down for succession. That is a wall of sellers walking toward a well-funded set of buyers, which is a fine time to be the seller who did his homework and a bad time to be the one who didn't.
What to do before anyone makes you an offer
Split the two companies on paper now, while there's no deal on the table and no reason to flatter the numbers. Put service and repair revenue, its own labor, its own margin, and its own overhead on one page. Put project work on another. Count your active maintenance agreements and what share of last year's revenue came from customers who had called you before. Track your callback rate, because a buyer will.
You may find the service book is carrying the install side, subsidizing thin project margins with cash nobody attributed correctly. You may find it is a genuinely valuable company that happens to live inside a lower-value one. Either way you learn it on your own schedule instead of across the table from someone whose full-time job is knowing the answer before you do. The number is already there in your business. Decide whether you're going to be the one who found it first.