Brian Cohen is one of the driving forces behind SF&P Advisors. This CPA firm prides itself in completing nearly three billion dollars in transactions with HVAC, plumbing and mechanical contractors totaling about 400 transactions.
Russ Alan Prince: Please describe SF&P Advisors.
Brian Cohen: My team and I at SF&P Advisors have experience representing contractors from $3.5 million in revenue to hundreds of millions in revenue. Unlike typical business brokers, SF&P Advisors has carved out a niche and built its reputation over nearly two decades with its primary focus on the trades. We have been behind some of the most significant transactions and prominent names in the contracting space, including Dave Geiger, Kenny Haines, Ken Goodrich, Ismael Valdez, Wyatt Hepworth and Ray Isaac.
What also sets SF&P Advisors apart is that they have been selling contractors to private equity for years already, and with more private equity groups reaching out to get involved, it simply enables contractors to get the most money possible for their companies.
Prince: Can you explain how you operate?
Cohen: The team at SF&P Advisors, with its multiple experienced CPAs, digs into the client’s numbers to determine EBITDA beforehand. The client knows exactly where they stand before they go to market. The guesswork is taken out of play, and most of the work is handled up front. There is no other broker, advisor or investment banker with the knowledge and experience around contractor transactions the way we do, and it continues to be why we’re chosen time and again to represent sellers.
Prince: Recently, there has been much chatter around multiples and how 2023 and 2024 will shape up. Can you provide us with some perspective?
Cohen: What needs to be understood is what made 2021 and 2022 such incredible markets for sellers. Covid forced homeowners to be home, thus using their HVAC and plumbing equipment two to three times more than usual. Many homeowners chose to do projects around the house because of low-interest consumer credit. A slew of private equity companies entered the space looking to buy or partner with contractors because they have now become “pandemic-proof.” Furthermore, the cost of capital was cheap.
So what did this all mean? It meant contractors had revenues going up because consumers had money to burn. At the same time, because of the number of buyers now interested in the space, there was a bidding war to purchase these companies.
All of this drove valuations and multiples to a place never seen before. We took deals to market, where we had 50 to 70 buyers signing NDAs to see the deal. By analogy, if someone was selling a home and had an open house over a weekend, and the realtor brought 50 to 70 potential buyers through the house, we could all agree that the chances would be that the seller would get an incredible deal.
Russ Alan Prince is the executive director of Private Wealth magazine and chief content officer for High-Net-Worth Genius. He consults with family offices, the wealthy, fast-tracking entrepreneurs and select professionals.
