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Commercial HVAC Service & Maintenance · Denver, CO · Est. 2010
78/100
Confidence: Medium
$3,200,000
Asking Price
$4,100,000
Revenue
$780,000
SDE
22
Employees
Summit Mechanical is a profitable, well-established commercial HVAC shop with 14 years of operating history, strong recurring maintenance revenue (~58% contracted), and a defensible position in the Denver metro. The deal is fairly priced at 4.1x SDE. The primary risk is founder dependency on commercial relationships and the absence of a formalized SOP library. With a structured earnout and a 12-month transition agreement, this is an attractive platform acquisition for a roll-up operator or a first-time searcher with industry appetite.
82
Financial Health
74
Market Position
79
Growth Potential
Medium
Risk Level
$2.9–3.4M
Valuation Est.
62
Skepticism Score
Key-person dependency: founder personally manages ~40% of commercial accounts and holds the master mechanical license the business operates under.
Customer concentration: top 3 property-management clients = 46% of revenue; one non-renewal materially impacts cash flow.
License transfer risk: Colorado mechanical contractor license must be re-issued to the buyer — a 60–90 day process that can stall revenue recognition.
The broker's growth narrative leans on a one-off contract annualization. Underwriting the deal on flat revenue is the conservative path.
SBA 7(a) Loan
70% · 10.5% · 120mo
$2,240,000
Seller Financing
20% · 6% · 60mo
$640,000
Buyer Cash Down
10% · equity
$320,000
$42,700
Mo. Debt Service
1.42
DSCR
31%
Cash-on-Cash
$320,000
Buyer Cash In
Verdict: Tight — Viable with earnout
DSCR of 1.42 clears the 1.25 SBA minimum but leaves thin margin for a top-account loss. A $250K earnout tied to customer retention de-risks the structure.
Suggested Offer
$3.0M (3.85x SDE) with a $250K earnout over 18 months tied to top-3 client retention.
Growth Lever
Convert reactive service callers to annual preventive-maintenance contracts — model shows +$190K SDE within 12 months at 35% conversion.
Top Risk
Founder license transfer + key-account retention. Mitigate with a 12-month paid transition consulting agreement and an LOI clause requiring client-introduction meetings before close.