Buying or selling a low voltage business: what buyers pay, who is buying, how to sell

If you are buying or selling a low voltage business, start here: buyers pay most for repeat work from good customers and for a team that runs the jobs without the owner. The active buyers are private equity firms, independent sponsors and national IT and security integrators, plus individual buyers with SBA loans for smaller firms. This page is for owners of structured cabling, audiovisual, security and network installation companies, and for the buyers looking at them.

What does a buyer pay for in a low voltage business?

A buyer pays for future cash flow. In low voltage work, that cash flow comes from three places, and buyers do not value them the same way.

New construction projects. Cabling a new office, a warehouse or a school. The jobs can be large, but each one ends. Next year depends on winning bids again, often through general contractors.

Repeat work from the same clients. Moves, adds and changes for a hospital, a campus or a data center. The work is not under a fixed contract, but it comes back every month. Buyers like it because it is steady and the customer already trusts you.

Service and maintenance agreements. Support contracts for cameras, access control, AV rooms and networks. These renew on their own. They are the part of the business buyers value most per dollar of profit.

Buyers also pay for certified technicians, the licences your state requires, a strong safety record and a project manager who can run jobs without you.

Why are buyers interested in low voltage firms right now?

The buyers say it in their own announcements. Two reasons come up most.

Security and AV are moving onto the network. When Business Communications Inc. (BCI) bought NetLink Cabling Systems, the announcement said access control, video and AV systems have become part of IT. BCI wanted network, security and low voltage work under one roof. Industrial Cyber reported the deal and quoted the reasons.

Data centers. When Hudson Glade bought ComNet Communications, its managing director named the growing data center market as the first way to grow the business. The press release also listed sales, new services for existing clients and more acquisitions.

A third reason is simple. Many low voltage firms were started by one founder decades ago. Those founders are now looking for a way out, and buyers know it.

How big are the low voltage businesses that sell?

Sizes run from a two-truck cabling shop to national installers. Most deals in this trade never publish a price. The table shows recent public deals and what each source says.

We do not publish a multiple for this sector. Our own asking-price data from the marketplaces we read has fewer than 15 low voltage listings so far. That is too few to give a fair number, so we leave it out rather than guess. Any number you see should come from your own books and a real buyer, not a rule of thumb.

Who is buying low voltage businesses?

Four groups show up again and again.

1. Independent sponsors and private equity firms building a platform. Hudson Glade called ComNet its second platform investment and named acquisitions as part of the plan. A platform like this then buys smaller firms as add-ons. Our glossary explains platform versus add-on deals.

1. IT, network and managed service companies. BCI paired NetLink's hands-on cabling and security work with its own cybersecurity and managed services. For buyers like this, a low voltage firm adds crews and customers they can sell more services to.

1. Security integrators. SAGE Integration bought Vital Installs and sudoVision to add low voltage and infrastructure skills. A month later, investment firm Knox Lane took a majority stake in SAGE. So one owner's sale fed a larger platform deal. See our hub on buying or selling a security business.

1. Electrical contractors. Many electrical firms run a low voltage division or want one. Our hub on buying or selling an electrical business covers those buyers.

Below these sit individual buyers. A first-time owner with an SBA loan can buy a small cabling or AV firm, often with the seller staying on for a while. Which buyer fits you depends on your goals; a strategic buyer and a financial buyer often want different things from the deal.

What moves the price up or down?

The same few things come up in almost every deal.

Owner dependence is the big one. In the ComNet deal, the CEO and his team stayed to lead the business. In the NetLink deal, the local leaders and technical staff stayed with customers. Buyers pay more for a company whose people stay after the sale.

How do you sell a low voltage business?

Most sales follow the same path. Plan on preparing for a year or more if you can.

1. Clean the books. Split revenue into new projects, repeat client work and service contracts. Buyers ask for this first.

1. Show profit by job. Pull job costing for the last two or three years. Show which kinds of work make money.

1. List your top customers. For each: how long they have used you, what they spent each year, and whether there is a master service agreement.

1. Fix owner dependence. Put a project manager or operations lead in place. Make sure more than one person holds the licences your state requires.

1. Get a value range. Know the range before you take a call from a buyer.

1. Run a process. Talking to several buyers at once gives you choices on price and terms.

1. Sign a letter of intent and go through diligence. Expect buyers to test every add-back, every backlog figure and every contract.

1. Close and hand over. Sellers usually stay for a transition period. Some keep a stake in the buyer; ask how that stake is valued first.

Ask a CPA about asset versus stock sale tax, and a lawyer about contracts and licences before you sign anything. Owners who want a second opinion can book a free call.

How do you buy a low voltage business?

Start with a buy box: size, location, the kind of work (cabling, AV, security, data centers), and how much of the revenue must repeat. Then check four things.

• The licences. Many states license low voltage work, and the rules differ. In California, for example, the state licence board has a separate C-7 low voltage systems class for systems up to 91 volts. The board says it does not cover low voltage fire alarm systems. Find out who holds each licence and whether it stays after closing.

• The backlog. Read the signed work not yet done. Check the margin on it, not just the size.

• The customers. How many are repeat clients? Do any general contractors send most of the work?

• The people. Lead technicians and project managers carry the client relationships. Find out if they plan to stay.

Most buyers finance a smaller deal with an SBA loan, a seller note and investor money combined. For the full process, read our guide on how to buy a business. Buyers who want help finding and checking deals can start at /buy.

Where does Acquisitions.com fit?

I have advised buyers and sellers of small and mid-sized businesses since 2016. Our AI scans 15+ business-for-sale marketplaces every day, and we also see off-market deals through advisors and brokers. We work on established, profitable businesses, typically $500K to $50M in revenue. Brokers and advisors who work with low voltage owners can join us.