Johnson & Sons - Heating, Plumbing, & Air

Johnson & Sons Heating, Plumbing, & Air

A premier mechanical contractor with a 45-year history of excellence serving commercial, industrial, and institutional clients across the Southwest.

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Valuation Brief
Baseline Analysis

Asking Price

$51,250,000

Gross Revenue

$68,850,000

Adjusted Free Cash Flow

$10,450,000

Adjusted EBITDA

$8,540,000

Business Description

Johnson & Sons Heating, Plumbing, & Air is a premier mechanical contractor with a distinguished 45-year history of excellence in the HVAC and plumbing sectors. The company specializes in serving commercial, industrial, and institutional clients across a three-state operational footprint in the southwestern United States. With a robust portfolio of over 3,500 completed construction units annually and a backlog of $88 million in contracted projects, it has established itself as a trusted partner for some of the largest national owner/builders. The firm's success is built on a foundation of near-perfect client retention, a highly scalable operational model, and a seasoned leadership team.

History & Context

Founded by William Johnson in 1979, the company began as a small family operation with a single truck. William's commitment to quality and customer service laid the groundwork for what would become a regional leader in mechanical contracting. The business is now in its second generation, with the same founding principles guiding its expansion and success.

Financial Statements

Market & Competitive Strengths

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Competitive Landscape

  • Market Position: A dominant regional player positioned to capitalize on continued commercial and industrial development.
  • Competitive Advantage: A multi-state footprint, sophisticated systems, and long-term relationships create a significant competitive moat.

Customer Base

  • Client Retention: Near-100% repeat business rate from core clients.
  • Contract Structure: Long-term master service agreements provide predictable, recurring revenue.
  • Project Backlog: $88 million in active work provides strong revenue visibility.
  • Risk Mitigation: No single client accounts for more than 15% of annual revenue.

Strategic Positioning

  • Market Opportunity: Expanding addressable market due to population growth and corporate relocations.
  • Industry Trends: Growing emphasis on green building and energy efficiency.
  • Barriers to Entry: High capital requirements, licensing, and deep-seated relationships.
  • Pricing Power: Reputation for quality allows for premium pricing.

The Engine of Excellence

Explore the core components of our operational strength. Click each card to learn more.

Assets & Facilities

  • Three strategically located, owned facilities in Phoenix, Salt Lake City, and Denver.
  • A well-maintained fleet and state-of-the-art equipment valued at approximately $5.4 million.
  • A robust inventory management system to minimize project delays.

Technology & Systems

  • Advanced software for streamlined scheduling, resource allocation, and budget tracking.
  • 45 years of developed proprietary techniques and quality control checklists.
  • Highly scalable infrastructure and systems supporting significant growth.

Management & Workforce

  • A seasoned, autonomous leadership team with an average tenure of over 15 years.
  • A dedicated team of over 110 skilled technicians, project managers, and support staff.
  • The business is not dependent on the owner for day-to-day operations.

The Anatomy of the Deal

Follow the timeline to understand each phase of the opportunity.

Transaction

Transition

Valuation

The Future

The Transaction

  • Structure: Anticipated as an asset sale for a step-up in basis; stock sale also considered.
  • Financing: A combination of third-party debt and seller financing is proposed.
  • Working Capital: A normalized net working capital target will be established and adjusted at closing.

The Transition

  • Seller Role: The owner will commit to a 24-36 month transition period, followed by a flexible advisory role.
  • Continuity: The existing leadership team (average tenure 15+ years) will remain.
  • Key Issues: Proactive client consent for contract novation and securing the management team are critical.

The Valuation

The asking price of $51,250,000 is based on a multiple of Adjusted EBITDA, reflecting the company's strong market position, recurring revenue, and significant growth potential. A detailed valuation report is available to qualified buyers.

The Future: Growth & Risks

  • Growth: Expansion into the Texas market and the high-tech building systems sector represent significant, untapped revenue streams.
  • Risks: Market risks include potential downturns in the commercial construction sector and dependency on key material suppliers, mitigated by a diversified client base and strong supplier relationships.

Assets & Facilities

  • Three strategically located, owned facilities in Phoenix, Salt Lake City, and Denver.
  • A well-maintained fleet and state-of-the-art equipment valued at approximately $5.4 million.
  • A robust inventory management system to minimize project delays.

Technology & Systems

  • Advanced software for streamlined scheduling, resource allocation, and budget tracking.
  • 45 years of developed proprietary techniques and quality control checklists.
  • Highly scalable infrastructure and systems supporting significant growth.

Management & Workforce

  • A seasoned, autonomous leadership team with an average tenure of over 15 years.
  • A dedicated team of over 110 skilled technicians, project managers, and support staff.
  • The business is not dependent on the owner for day-to-day operations.