Beyond financial performance, buyers and their advisory teams will dig deeply into the following areas when analyzing any construction M&A transaction. In the preparatory phase, Calder will work with you to document, highlight, and explain these areas of the business and get prepared for intense buyer scrutiny.

• Project Portfolio: Reviewing the target company's project portfolio is crucial. Buyers will evaluate the size, complexity, and profitability of completed and ongoing projects. They will also consider the diversity of projects across different sectors, geographic locations, and contract types.
• Contractual Agreements: A buyer will need to understand the existing contracts in place before acquiring a construction or building business. Buyers will review construction contracts, subcontracts, and client relationships to understand the terms, obligations, payment schedules, and potential risks associated with the projects.
• Project Management Capabilities: Potential buyers will evaluate the effectiveness of project planning, scheduling, cost estimation, risk management, and resource allocation. They will also consider the company's track record of delivering projects on time and within budget.
• Equipment and Assets: Buyers will assess the condition, maintenance, and utilization of construction machinery, vehicles, tools, and other assets. They will also consider any potential needs for equipment upgrades or replacements.
• Workforce and Talent: Buyers will evaluate the skills, experience, and expertise of the workforce, as well as any key personnel or management team members. They will also consider employee contracts, compensation structures, labor union agreements, length of service, and potential risks related to labor shortages or turnover.
• Regulatory and Compliance: Construction businesses are subject to various regulatory requirements and compliance standards. It is important to assess the target company's compliance with construction regulations, building codes, safety protocols, environmental regulations, and licensing requirements.
• Bonding and Insurance: Evaluations of the target company's bonding and insurance arrangements will be a top concern. Buyers will review performance bonds, surety bonds, liability insurance, and any claims history. They will also assess the company's ability to obtain adequate bonding and insurance coverage for future projects.
• Market and Competitive Analysis: Buyers will analyze the target company's position within the construction market to understand the competitive landscape. They will evaluate market trends, the company's reputation, competitive advantages, potential threats, and opportunities for growth or expansion.

There are a few reasons why construction businesses do not sell, and Calder has worked diligently to eliminate these primary obstacles to selling.

The number one reason that construction businesses do not sell is because there is a significant gap between what the seller wants and what the market provides in terms of valuation. Calder eliminates this by conducting a thorough “market-informed” business valuation before we ever ask for a client engagement. Because we often sell more than a dozen construction businesses per year, we have an accurate pulse on valuation multiples, deal structure, and the state of the buyer pool. We combine our proprietary on-market data and insights with thorough research utilizing trusted valuation resources for businesses that match your specific construction niche and financial performance. The result is a precision valuation analysis that reflects the market feedback you will receive from buyers if you decide to proceed with a sale process.

At this point, it is 100% up to you whether to move forward with a sale process. If the valuation is not where you need or want it to be, Calder can point you to resources that can help you to improve your valuation or we can all simply wait. Sometimes, construction business owners decide to wait 1-2 years before selling once they understand what drives valuation. At no point during our initial valuation process will you feel compelled to make a decision that is not in your best interest. Calder Capital is in it for the long game, and this means standing shoulder-to-shoulder with our prospects and clients and helping them to make the best decision for their businesses and lives.

The second reason that construction businesses do not sell is the quality of their financial records. When buyers and lenders are making critical decisions to pay and loan, respectively, millions of dollars, it is critically important to them that they can trust the information that they are receiving from the seller. Periodically, we receive information from construction business owners that contains errors or is not prepared to the accounting standards that buyers expect. During our business valuation exercise, if we identify areas where buyers are likely to be confused or have questions, or we encounter impasses with respect to obtaining the types of financial records that buyers and lenders will expect during the analysis and due diligence phase, we will discuss these with you and help you work with your CPA or other accounting advisors to prepare the business appropriately for the type of scrutiny that a sophisticated buyer will bring.