How a Regional Plumber Achieved 11.5x EBITDA with Heat Pump Capability

Serving business owners across the United Kingdom and United States

This case study describes a real transaction facilitated by DealFlowAgent. Company name and certain details have been anonymised to protect client confidentiality.

Executive Summary

A family-owned plumbing and heating business in the South East achieved an exit valuation of 11.5x EBITDA - significantly above market multiples - by strategically pivoting to heat pump installation and building recurring revenue streams. The sale completed in 9 weeks with 4 qualified offers.

Company Background

ThermoFlow Ltd (anonymised) was founded in 2008 by brothers Mike and David, both time-served plumbers with British Gas backgrounds. By 2023, the business employed 18 staff and generated £1.8M revenue from:

• Residential boiler installation and servicing (55%)
• Commercial heating maintenance (25%)
• Heat pump installation (20%)

Key Business Characteristics

Strengths

• MCS certification since 2021
• 12 engineers, 4 trained on heat pumps
• 650 annual service contracts
• 4.8 Google rating (340+ reviews)

Challenges

• Founders aged 58 and 61
• No formal management layer
• Basic job management software
• Heavy owner involvement in quoting

The Strategic Pivot: Heat Pumps

In 2022, ThermoFlow made a strategic decision that would transform their valuation: they invested heavily in heat pump capability.

Investment Made

Results Achieved

By 2025, heat pump revenue had grown from £0 to £360K (20% of total), with gross margins of 38% vs 28% for traditional boiler work.

More importantly, the heat pump capability signalled future relevance to buyers. With the Boiler Upgrade Scheme offering £7,500 grants and the Future Homes Standard effectively banning gas boilers in new builds from 2025, heat pump capability was seen as essential.

Preparing for Sale

ThermoFlow engaged DealFlowAgent in Q1 2025 to explore exit options. Our preparation process focused on three areas:

1. Financial Optimisation

We worked with their accountant to:

• Add back £65K of owner-specific expenses
• Normalise one-time costs (£28K legal fees from property purchase)
• Document all adjustments with supporting evidence

Normalised EBITDA: £278K (up from reported £185K)

2. Operational Documentation

• Created SOPs for key processes (quoting, installation, service calls)
• Documented all customer contracts and renewal terms
• Compiled certification portfolio (Gas Safe, MCS, F-Gas)
• Built management summary pack for buyers

3. Transition Planning

• Identified operations manager (10-year employee)
• Created founder transition timeline (24 months)
• Documented customer relationships and key accounts

The Sale Process

Buyer Identification

Using DealFlowAgent's free buyer matching tool, we identified 23 potentially interested acquirers:

• 8 PE-backed home services platforms
• 6 regional plumbing groups
• 5 national HVAC operators
• 4 search fund executives

Marketing Materials

We prepared:

• Anonymised teaser (1 page)
• Information memorandum (40 pages)
• Financial model with 3-year projections
• Management presentation deck

Process Timeline

The Offers

Four qualified offers were received:

Structure: Upfront/Deferred/Earn-out

Why Buyer A Won

The selected buyer - a PE-backed home services platform - offered the highest headline value, but several factors made them the right choice:

Strategic Fit They were building a heat pump-focused platform and valued ThermoFlow's MCS certification and trained engineers as core capabilities, not just bolt-on additions.

Deal Certainty With £45M of committed capital and 6 completed acquisitions, they demonstrated ability to close quickly and cleanly.

Cultural Alignment Their regional MD was a former trade business owner who understood the culture and could speak credibly to the team.

Transition Support They offered Mike and David flexible 18-month transition roles with clear handover milestones.

The 11.5x Multiple: Why So High?

ThermoFlow achieved a multiple 2-3x above market averages. Key drivers:

1. Heat Pump Capability (Premium: +2.5x)

MCS certification, trained engineers, and proven installation track record positioned the business for the Net Zero transition.

2. Recurring Revenue (Premium: +1.5x)

650 service contracts generated £195K annual recurring revenue (40% gross margin). This predictable income stream reduces buyer risk.

3. Competitive Process (Premium: +0.5x)

Multiple interested buyers created competition. Final offer was 28% above initial indication.

4. Clean Due Diligence (Premium: +0.5x)

Well-prepared documentation, clean accounts, and responsive management team reduced buyer risk perception.

Lessons for Plumbing Business Owners

Start Heat Pump Transition Now

MCS certification takes 6-12 months. Engineer training takes time. Start the journey now to capture maximum value.

Build Recurring Revenue

Every service contract you sign increases your business value. Aim for 25%+ of revenue from recurring sources.

Prepare 18 Months Early

The highest-value exits come from prepared businesses. Document processes, clean up accounts, build management depth.

Run a Competitive Process

Single-buyer negotiations leave money on the table. Multiple offers consistently achieve 15-25% higher valuations.

Get Specialist Advice

M&A advisors with home services expertise understand buyer dynamics and can position your business effectively.

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Meet the DealFlowAgent Team

Joe Lewin, Founder & Lead Advisor Exited entrepreneur who has guided 20+ business owners through successful exits across the UK and US. Joe built and sold his first company after scaling to 80,000+ users and raised over £2M in funding. He founded DealFlowAgent to combine traditional M&A expertise with AI technology.

How We Work:

• Business Owners: Small success fee (lower than industry average). We only succeed when you do.
• M&A Advisors & Brokers: We partner with you - upload your sell-side mandates and we connect you to qualified buyers. We charge 20% of your success fee.
• Acquirers: Completely free. Register, speak to Sterling (our AI), and receive tailored deal flow.

Our Unique Advantage: Our proprietary conversational AI, Sterling, gathers intricate buyer insights through natural dialogue - exact search criteria, valuation preferences, deal structure requirements, green flags and red flags. This data enables precision matchmaking that traditional methods cannot achieve.

Frequently Asked Questions

How realistic is an 11x+ multiple?

Achievable for heat pump-capable businesses with strong recurring revenue, but requires excellent preparation and competitive process.

What if I don't have heat pump capability?

Traditional plumbing businesses typically achieve 4-6x EBITDA. Consider investing in MCS certification to access premium valuations.

How much did advisors cost?

Success fees typically range 3-5% of enterprise value. On a £3.2M exit, fees were significantly outweighed by value added.

Can I replicate this exit?

Yes, with proper preparation. The key elements - heat pump capability, recurring revenue, clean accounts - are all achievable.

How long did founders stay on?

Mike and David committed to 18 months transition, stepping back progressively from month 6. Both exited fully by month 15.

Your Next Steps

If your plumbing business has characteristics similar to ThermoFlow - or you're building toward them - we'd welcome a confidential discussion about your exit options.

Book a valuation call with our building services team, or use our buyer matching tool to see which acquirers are currently seeking businesses like yours.

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DealFlowAgent specialises in building services, facilities management and healthcare M&A, connecting business owners with qualified acquirers. Contact us for a confidential discussion about your exit.

Related reading

• HVAC valuation guide: EBITDA multiples
• Heat pump and decarbonisation valuation guide
• Maintenance contracts valuation guide
• HVAC M&A
• Heat pump and renewables M&A
• Facilities management M&A
• Exit planning guide for owners
• Free valuation estimate
• See who is buying: free buyer list
• Book a confidential call

Sources

• MCS certification scheme
• Gas safety guidance, HSE
• Building regulations and approved documents, GOV.UK

Plumbing M&A Specialists

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DealFlowAgent is a leading specialist in niche building services, with dedicated M&A advisory and brokerage coverage for plumbing businesses across the UK and US. Our trusted advisors leverage industry knowledge, buyer relationships and proprietary technology to help business owners secure multiple acquisition offers at higher valuations.

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