Independent business valuation · Building services (M&E)

You've Had an Offer for Your M&E Contracting Business. Is It Fair?

The offer letter gives one number for the whole company. A buyer has already split it in two: the maintenance contracts they will pay well for, and the installation work they will discount. An independent valuation shows you that split, in two working days, before you reply.

Owners of mechanical, electrical and building services contractors usually reach us after something specific has happened. A national facilities or compliance group, often private equity-backed, has written with a price after a single meeting. A main contractor you have done packages for since the business started asks whether you would sell. Your contracts manager and your lead engineer want to buy you out. Or retirement is a few years off and nobody has costed what the business fetches once the main contractors stop ringing you.

Whoever wrote the first number knows which of your contracts renew and which of your final accounts are still open. You may be the only person at the table who has not worked that out.

Email Mark for a free discovery call See what a valuation report contains

The stakes

What finding out late costs

An illustrative mechanical and electrical contractor with £18.0m turnover, about a quarter of it from planned and reactive maintenance, and reported EBITDA of £1.60m. The owner had been told by a supplier's area manager that M&E firms go for six times EBITDA, and expected about £9.6m. The company and every figure are fictional.

Illustrative figures, £000
Reported EBITDA	1,600
Final account claims taken to profit before the main contractors agreed them, reversed	(240)
Defect and warranty call-backs at their normal level after an unusually quiet year	(70)
Commercial director costed in to replace the owner's estimating and final account role	(75)
One-off adjudication costs added back	35
Maintainable EBITDA	1,250
Enterprise value at an illustrative 4.8 times	6,000
Cash at completion	1,400
Hire purchase and leases on the van fleet	(420)
Bank loan	(200)
Maintenance contracts invoiced in advance, the unearned part treated as debt	(260)
Retention owed by a main contractor that went into administration, written off	(110)
Working capital below the normal level	(150)
Equity value to the owner	6,260

The owner lost about £3.3m between the area manager's figure and the cash. Most of it came from the profit line, which counted claims no main contractor had signed, and from cash in the bank that customers had paid for maintenance visits not yet made. The 4.8 times multiple is for illustration only. In a real valuation the maintenance book and the installation work are tested separately, and the multiple follows from what that testing shows about your renewals and final accounts, checked against M&E deals of a similar shape.

The numbers you have been given

Who gave you a figure for your M&E business, and what do they gain from it?

Before a sale, most M&E owners hear a price from someone who gains or loses by it, whether that is the group that wrote the offer or an adviser hoping to run the sale.

The buyer

wants to pay as little as you will accept. A compliance or facilities group that has bought other M&E firms knows how often a contractor's profit rests on final accounts nobody has signed. Its first figure already allows for that. Yours probably does not.

A broker

competing for your instruction has a reason to quote high, because a big number wins the mandate. Whether it holds comes out months later, when the buyer's quantity surveyor reaches your open final accounts and the retentions still sitting with main contractors.

Your accountant

knows your numbers better than anyone and probably agreed the year-end value of work in progress with you. Defending that figure in front of a buyer's due diligence team is a different exercise, and plenty of practice accountants have never had to do it.

None of them is acting in bad faith. Each is answering a different question from yours, which is what a buyer will pay today for your maintenance book and your installation work taken together, and how much of that reaches you once advance billing and retentions are dealt with.

Independence

Why our valuation is independent

When we value your business, we have no reason to push the number up or down. The fee is fixed and agreed before any work starts, and it is the same whatever the number turns out to be. You are not signing up to a sale, and nothing in the engagement commits you to anything further.

The report is yours. Show it to a buyer, your bank, your accountant or your family. Every figure in it traces back to one of three valuation methods, with each adjustment explained in the Excel model you receive alongside it.

Owners rarely go on to ask us to sell their business after a valuation, although it has happened. Most come to us for the reason this page exists. They want a number they can trust before someone else tells them what it is.

Who does the work

Who does the work, and what a valuation finds

Mark Ross Roberts FMVA CBCA carries out every valuation himself, with 30 years on the deal side of UK mid-market transactions. The largest corporate group he has negotiated against had a turnover of £3.2bn.

96%
In 96% of completed Achieve mandates, the price agreed at heads of terms is the price paid at completion.
Source: Achieve Corporation mandate records

The two summaries below show the kind of finding a valuation produces. They are examples written for this page, not records of real mandates, and they carry that label on the website until real anonymised deals replace them.

Illustrative example

Mechanical services subcontractor, North West

Turnover: £12m
Buyer: A national building services group
What the valuation found: Nearly all the work came as M&E packages under two main contractors on commercial and residential schemes. Three completed jobs still had open final accounts, and the profit on them had been booked at the figures the business was claiming. One of the main contractors had also started paying late. The valuation took the unagreed claims out of maintainable earnings, valued the retentions by who owed them, and showed the owner what the buyer's surveyor would find.
Outcome: The owner kept the right to collect the open final accounts himself after completion, with the price adjusted to match, so the buyer had no reason to discount them.

Illustrative example

Electrical and fire safety maintenance contractor, West Midlands

Turnover: £6m
Buyer: A private equity-backed compliance services group
What the valuation found: The buyer wanted the planned maintenance and statutory testing contracts. Its first offer valued the whole turnover as if it were installation work. The valuation separated recurring revenue from project revenue, set out the renewal history of each maintenance contract, and flagged that the main electrical certification body approval relied on the owner as the named qualified supervisor.
Outcome: The maintenance book was priced on its renewal record, and a second qualified supervisor was appointed before completion so the approval did not depend on the owner staying.

Sector insight

What buyers pay for in building services

Buyers of M&E contractors pay most for revenue that comes back every year without a tender. Installation work is valued, but at a discount, because a buyer can see how often a good project turns into a slow final account.

Planned and reactive maintenance contracts that renew. Planned preventive maintenance and reactive call-outs for facilities managers, housing providers and public sector estates. A buyer reads each contract for its term, notice period and any right to terminate for convenience, and checks how many times it has already been renewed.
Statutory compliance work. Gas safety checks, fire alarm and emergency lighting testing, fixed wire testing and water hygiene have to be done whatever the economy does. Consolidators in the compliance market are built around this work, and it is usually why they made the approach.
Direct relationships with building owners. Work let directly by the client, rather than as a subcontract package under a main contractor, carries better margins and keeps you away from another company's cash flow problems.
Engineers you employ, holding the tickets the work needs. Electricians with ECS cards, Gas Safe registered engineers and F-gas qualified refrigeration and heat pump engineers on the payroll. The company must also hold an F-gas certificate from an approved body before it can service refrigeration, air conditioning or heat pump systems for other businesses (UK government, F gas company certification guidance).
Low carbon heating capability with a record behind it. Heat pump installation and retrofit work with completed jobs to show. Installations paid under the government's Boiler Upgrade Scheme reached 3,260 in August 2026, the highest month since the scheme began, bringing the total to 93,364 (DESNZ, Boiler Upgrade Scheme statistics, August 2026).
A commercial team that settles final accounts. A quantity surveyor or commercial manager who agrees variations as the job goes and closes final accounts within months of practical completion, without the owner in the room.

What pulls the value down

The discounts in M&E contracting follow from where the trade sits on a project. You arrive late, after the frame and the envelope, and you get paid last.

Subcontract packages squeezed at the end of the programme. When earlier trades overrun, the M&E package is compressed to hold the handover date. Recovering the overtime and extra labour depends on how well the variations were recorded. A buyer reviews the last few completed jobs to see how often margin was lost this way.
Dependence on a few main contractors. Construction had more company insolvencies than any other industry in the 12 months to August 2026, with 3,866 cases, 17 per cent of those where the industry was recorded (Insolvency Service, Company insolvencies August 2026). A pay-when-paid clause is ineffective under the Construction Act, except where a party up the chain is insolvent (Housing Grants, Construction and Regeneration Act 1996, section 113). So the clause bites at the moment a main contractor fails, and buyers price that.
Open final accounts. Completed jobs with the final account still under negotiation. A buyer will not pay for a sum the main contractor has not agreed, and will often hold back part of the price until each one settles.
Latent defects and warranties. Defects can surface years after handover. The Building Safety Act 2022 extended the limitation period for claims under the Defective Premises Act to 15 years, and to 30 years for claims that had already arisen (Building Safety Act 2022, section 135). Buyers ask for every collateral warranty given and every defect claim open.
Approvals that hang on one person. An electrical certification approval, a Gas Safe registration or an F-gas company certificate that depends on the owner as the qualified supervisor or the only certified engineer. A buyer treats that as revenue at risk until someone else is named.
A workforce bought in at agency rates. Qualified electricians and gas engineers are hard to recruit. A business that fills the gap with agency labour carries a cost the buyer expects to rise, and an apprentice programme cut back to lift profit before a sale gets noticed.

Given twelve months' notice, most of these can be fixed or at least evidenced. Open final accounts can be closed out, and a second qualified supervisor named, well before a buyer's surveyor arrives. A valuation done early shows which apply to your business and roughly what each one is costing you in price.

Method

How we value an M&E contracting business, and why the multiple comes last

Anyone can lift a year's EBITDA from an M&E contractor's filed accounts and multiply it by a number someone quoted at the wholesaler's counter. That treats a renewing maintenance book and a run of installation packages as the same money, and no buyer's adviser will price it that way. We set the multiple last, once the work below is done. It comes out different for every contractor, so we do not publish a typical range.

Before any multiple is applied, we go through the contracts and the open jobs under these headings:

Its defensible moat. What stops a competitor taking the work at the next renewal or tender? A maintenance book with years of renewals, direct client relationships, statutory testing that clients cannot drop, certified engineers who are hard to replace, and the cost to a facilities manager of moving a site's maintenance to someone new.
The market around it. A PESTLE review of the pressures on its clients' spending, such as net zero retrofit and the Boiler Upgrade Scheme, the dutyholder and competence rules that have applied to contractors carrying out building work since 1 October 2023 (Building Regulations etc. (Amendment) (England) Regulations 2023) and the shortage of qualified engineers. In July 2026 the monthly rise in construction output came solely from repair and maintenance, which grew by 0.8 per cent while new work fell by 0.4 per cent (ONS, Construction output in Great Britain, July 2026).
Its competitive position. Porter's Five Forces applied to the business itself: the power of equipment manufacturers, wholesalers and agency labour suppliers, the buying power of main contractors and large facilities management clients, the threat of new entrants on simple electrical installation, substitutes such as a client's in-house maintenance team, and rivalry on every package.
Its real competitive edge. The specific reason clients keep the business on their maintenance contracts or keep inviting it to price packages, and whether that reason survives the owner stepping back from estimating and from the main contractors' project meetings.
Capital expenditure. M&E contractors own little plant. The spend that matters is the van fleet, test and commissioning equipment, job management software for the maintenance book, and the training budget that keeps engineers certified.
Frameworks and contracts. Maintenance contracts and their renewal dates, public-sector frameworks the business sits on, and how much of next year's revenue is already contracted. Subcontract terms are read for pay-when-paid wording, retention percentages and release dates, and design responsibility passed down by the main contractor.
Quality of earnings. Whether recent profits rest on final accounts not yet agreed, or on training and apprentice spending held back before a sale. A buyer's surveyor will walk the open jobs one by one, so we do it first.

Only then do we value the business three ways: on maintainable earnings, on a discounted cash flow of its own forecast, and on the net value of its assets. Net assets usually carry little weight, because an M&E contractor owns vans and test kit rather than plant, and its value sits in the contracts and the engineers. The discounted cash flow is where the maintenance book and the installation work separate most clearly, since one renews on a known date and the other has to be won again package by package. Where the methods disagree, the gap shows where a buyer will push, which in M&E is usually the open final accounts or a maintenance contract with a short notice period.

On published multiples. BDO's Private Company Price Index put the median UK trade buyer multiple at 9.8 times EBITDA in Q3 2024, and 12.2 times for private equity (BDO, PCPI Q3 2024). Over the previous four years, the trade deals behind that index averaged an enterprise value of £14.5m (BDO, PCPI Q1 2024). Those averages pool every sector the index covers and companies far larger than most M&E contractors, so they cannot tell a renewing compliance book from installation packages under a main contractor that pays late. We treat them as one cross-check on the result of the work above, nothing more.

We value businesses up to £450m enterprise value. The fixed fees below cover businesses with turnover from £500k to £30m, and larger businesses are scoped on the discovery call.

The accounts

Where M&E contractors' accounts mislead

An M&E contractor's filed accounts put renewing maintenance and one-off installation into a single turnover figure, and the profit leans on year-end calls about final accounts and retentions that a buyer's accountants will reopen. We split the revenue and reopen those calls before they do.

Maintenance and installation revenue reported as one figure. Filed accounts rarely split recurring maintenance from project work, so the part of the business a buyer values most is invisible. We rebuild the split from your invoicing and contract records.
Maintenance contracts invoiced in advance. Quarterly or annual billing puts cash in the bank before the visits are made. A buyer treats the unearned part as owed to the customer and asks for it to come off the price, or for that cash to be left in the business.
Final accounts and variations taken to profit before agreement. Profit booked on a claimed final account assumes the main contractor will agree it. Your claim sits behind the main contractor's own account with the client, so agreement comes later and is often lower. Where the expectation was optimistic, a buyer reverses it.
Retentions held by main contractors. They sit in the balance sheet at face value until someone tests them. Retentions owed by a main contractor that has since failed, or held on jobs where defects are still being argued, get written down.
No provision for defects and warranty work. Call-backs on completed installations are a normal cost of the trade. Accounts that charge them only as they arise make a quiet year for defects look like a profitable one.
Labour cost hidden in subcontract lines. Labour-only subcontractors and agency engineers booked as cost of sales make the employed headcount look lean. A buyer works out what the same team costs on the payroll, and what it costs if those people leave at completion.

The offer

The valuation, the fee and how to start

You receive a valuation memorandum, a written report and a locked Excel model, delivered in 2 working days. Mark Ross Roberts FMVA CBCA does the work himself. Nothing is passed to a junior analyst.

Annual turnover	Independent valuation	With funding feasibility
£500k to £5m	£1,200	£1,700
£5m to £10m	£2,000	£2,500
£10m to £30m	£3,000	£3,500
Above £30m	Scoped on the call	Scoped on the call

All fees exclude VAT. Funding feasibility adds the bank debt a lender is likely to advance against the business and tests deal structures on debt service cover, which matters if you are selling to a management team or buying a competitor.

How to start: email Mark at mark@achieve-corporation.com with a line on the business and what the valuation is for. You get a reply the same day, then a free discovery call that confirms the right report, the fee and the turnaround. Nothing is payable until you agree to go ahead.

Email Mark for a free discovery call

Questions owners ask

Frequently asked questions

I've had an offer for my M&E business. How do I know if it's fair?

Compare it with an independent valuation built from your accounts, your maintenance contracts and the state of each open final account, before you reply. It shows what a buyer is likely to pay for the maintenance book and for the installation work, how much of the headline reaches you after debt, advance billing, retentions and working capital, and which parts of the offer are open to negotiation.

Is an independent valuation worth it if I already have a broker's figure?

A broker's figure is often given to win your instruction, and it rarely survives the buyer's surveyor going through your open final accounts. An independent valuation has no stake in the number. Every adjustment to your profit and retentions is shown, so you can test the broker's figure line by line. At a fixed fee from £1,200 excluding VAT, it costs less than one point off the multiple on almost any deal.

Will you try to sell me a sale mandate afterwards?

No. The valuation is a standalone engagement at a fixed fee agreed up front, and the fee is the same whatever the number turns out to be. The report is yours to show anyone, including a buyer, your bank or the contracts manager who wants to buy you out. Owners rarely go on to instruct us to sell after a valuation, although it has happened, and you are under no obligation to instruct us for anything else. Most M&E owners use the report to negotiate with the group that has already approached them, or to plan the years before they step back.

How much is my M&E contracting business worth?

There is no reliable rule of thumb for M&E, whatever gets quoted on site or at the wholesaler's. The value depends on how much of your revenue comes from maintenance contracts that renew, how much from installation packages, how dependent you are on a few main contractors, and whether the profit in the accounts survives a review of your open final accounts. A multiple of EBITDA comes at the end of that work, followed by deductions for debt, advance billing and working capital at completion. Published averages pool other sectors and much larger companies, and say nothing about the split between your maintenance and installation revenue.

Are my maintenance contracts worth more than my installation work?

Usually, yes. Revenue that renews without a tender is easier for a buyer to forecast and finance than project work won package by package. How much more depends on the notice periods and the renewal record, which is why the valuation looks at each contract.

What happens to open final accounts when I sell?

A buyer will not pay full value for sums a main contractor has not agreed. The usual answers are a lower price, part of the price held back until each account settles, or the seller keeping the right to collect them after completion. The valuation shows what each open account is realistically worth, so you choose the treatment with the numbers in front of you.

My retentions are held by main contractors. What happens to them?

They form part of working capital, and a buyer will discount any that are old, tied to disputed defects or owed by a contractor in difficulty. The valuation lists them by main contractor and release date, which also shows a buyer how exposed you are to any one of them.

Do my NICEIC, Gas Safe and F-gas approvals transfer to a buyer?

In a sale of the company's shares, the company keeps the approvals it holds, although certification bodies generally expect to be told about a change of ownership. In an asset sale the buyer usually has to hold or obtain its own. Either way, a buyer checks who the named qualified supervisors and certified engineers are, and whether they are staying.

Does the Building Safety Act affect the price?

It can. Claims under the Defective Premises Act can now be brought up to 15 years after the work, and since October 2023 contractors carrying out building work have had specific dutyholder and competence duties. A buyer will ask which warranties you have given and which defect claims are open, particularly on higher-risk buildings.

Is the valuation confidential?

Yes. An NDA is available before you share any figures, and your staff, clients, main contractors and subcontractors are not contacted.

Sources:

Valuation guides: EBITDA analysis · Earnings multiples · Asset-based valuation · Discounted cash flow

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