Government contracts… unions… unpredictable weather… All are factors that could add up to a valuation nightmare. But don’t be afraid! Join Brad Minor of Blue & Co in this session on valuing specialty paving contractors – a program that features a paving company case study. Learn more about how investing in and running heavy equipment impact firm value and other specific considerations you need to master in order to excel in this niche – but widespread – industry. Navigate the value drivers as well as the road blocks for your next paving company valuation engagement.

Introduction

• Discussing differences between specialty contractor valuations and other valuations

• Discussing value issues for Specialty Contractors, and

• Specifically Paving Contractor issues

Basics of Business Valuations for Contractors

• Income approach – yes

• Asset approach – yes

• Market approach – Consider and use in right circumstances

• Key man issues

• Officers compensation

• Sources of data

• Discounts

Specialty Contractor Specifics

• Union v. Non-Union

• Undisclosed liabilities (i.e. Pension plans)

• Governmental v. Non-governmental work

• Bid work v. non-bid work

• Cyclicality/Seasonality

• WIP issues

• Advantages of being a “specialty” contractor v. general contractors

• Disadvantages of being “specialty” contractor

Paving Contractor Specifics

• Competitive bidding

• Investment in heavy equipment

• Maintenance

• Excess assets

• Holding costs of to get bigger jobs

• Managing equipment

• Multiple jobs

• Rent v. owning

• Selling used equipment

• Buying new of used?

• Weather related issues

• Knowing true cost of utilizing equipment

• Sources of industry and comparable information

• Safety issues

• Marketability discount

• Examples

• Insurance issues

Conclusion 

• Identify the drivers of value and key operational characteristics of paving contractors
• Identify common challenges and obstacles in valuing specialty paving contractors
• Associate traditional valuation techniques with paving contractors and how their strengths and weaknesses accommodate for peculiarities in paving contractor valuation
• Discuss best practices regarding paving and specialty contractor valuation