Anyone with Electrical Contracting/Services Experience?

August 07, 2025

by a searcher from The University of North Carolina at Chapel Hill - Kenan-Flagler Business School in Miami, FL, USA

Hello, We are looking to acquire an electrical contract services business. They focus on replacing panels, breaker and groundwire installations, and other misc services. Has anyone else gone through the DD process who can give some tips?

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Reply by a searcher
from Pennsylvania State University in Nashville, TN, USA

I've acquired an electrical contracting/service company, and here are the areas I would prioritize during DD: 1) licensing after the sale, 2) depending on your customer base and source of leads you'll want to make sure you have visibility in your WIP and/or lead flow and properly value and benchmark it, 3) working capital - this will look dramatically different depending on whether or not you are mostly doing new build, remodel, service etc. but either way you will want to set a well-modeled peg and ensure the seller is on board; early communication is key on this one, 4) key-man risk, e.g. seller-builder relationships, seller running the day-to-day electrical ops, seller holding most of the senior-level technical expertise, 5) true state of fleet vehicles and material inventory as these will likely be your primary non-goodwill assets you're purchasing, 6) there's a good chance materials will be your largest variable cost so I would spend some time understanding what the seller is currently paying vs. what options may exist for price reduction (brand changes, supplier negotiations, etc.) because this may end up being one of your largest levers for short-term cost reductions that fall straight to the bottom line, and lastly 7) depending on how closely you're tied to new construction/starts I would make sure to model worst case scenarios with housing cyclicality to ensure that you are set up to properly weather a downturn (or at least have a plan of what you would need to do). As Jeff mentioned, there are many things to look at in DD in this space, but those would be my top items. Happy to chat through any of this if you'd like, just send me a message. Good luck!

Reply by a professional
from University of South Florida in Sarasota, FL, USA

^redacted‌ - I have performed quite a few QoEs on a few large electrical contractors in the past primarily focused on commercial applications. The WIP accounts/contract assets and liabilities are a focus point during diligence. Typically, with smaller entities, deferred revenue/customer deposits are always a concern depending on the method of accounting being used by the company and if they are tracking those items accurately. Bonding/insurance/FS requirements for larger projects (if you are looking to scale into larger jobs) should be considered in your projections. There is a long list of other items for considerations, but I wanted to point out a few of the top items that come to mind for a contractor. Feel free to message me if you want to discuss.

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