Water and Wastewater Contractor M&A in Florida

Stewardship, legacy, and the next chapter.

A water and wastewater contracting company is more than a balance sheet. It is decades of night tie-ins and emergency main breaks, bonds you personally stood behind, licensed operators you trained and sponsored, and city engineers who trust your crews with the pipe under their streets. We treat the sale as stewardship: honest advice even when it is not what you hoped to hear, a pace set by your goals rather than our calendar, and the willingness to tell you when a buyer or a deal is the wrong fit. We believe this work is a calling, and we try to do it the way we would want it done for our own family.

Water and Wastewater Contractor M&A in Florida: Municipal Work, Bonds and Buyers

By Rajiv Khatri, Managing Partner, Sailfish Equity Advisors

A Michigan Contractor Just Bought Its Way Into Central Florida Water Work. It Will Not Be the Last.

On June 26, 2026, Lee Contracting, an employee-owned industrial and civil contractor based in Michigan, announced it had acquired Cathcart Construction Company, a Winter Springs infrastructure contractor that has built water systems across Central Florida since 1991 (Lee Contracting). Cathcart keeps its name and its Tampa Bay branch. For anyone tracking water and wastewater contractor M&A in Florida, that detail is the story. The buyer did not want a new brand. It wanted 35 years of local relationships, crews and municipal track record it could not build on its own.

Sailfish Equity Advisors advises Florida infrastructure contractors who are getting those calls, or want to be. Twenty-five years and more than 700 completed transactions have taught us that contractors who understand what an out-of-state buyer is really purchasing negotiate from strength. The ones who think they are selling equipment negotiate from a spreadsheet the buyer wrote.

This guide is for contractors doing municipal and utility water work: pipe installation and rehabilitation, force mains, lift stations, treatment plant construction and plant operations and maintenance. If you run a residential water treatment or softener business, your buyers are different; see our water treatment business broker page instead.

Why Florida Water Work Has Buyers' Attention

Florida's water infrastructure problem is a contractor's opportunity. Population growth keeps adding demand. Aging pipe and plants need rehabilitation. Springs, lagoons and estuaries need nutrient reduction. Septic-to-sewer conversions are moving from planning documents into construction.

The state is putting money behind it. The Florida Department of Environmental Protection runs a Water Quality Improvement Grant Program, established in statute, that funds wastewater upgrades and septic-to-sewer projects for local governments (Florida DEP). Every grant-funded project becomes a bid package for a qualified contractor.

Buyers see that pipeline and see a shortage of qualified Florida crews to build it. That is why the playbook in this sector is buy, not build. An out-of-state contractor cannot hire a 40-person underground crew in Orlando overnight. It can buy one.

Municipal Backlog: The Asset a Buyer Reads Line by Line

Your backlog is the first thing a buyer opens, and municipal backlog has quirks that private-sector buyers sometimes misread. Make their job easy.

Build a schedule of every contract with:

• Owner and contract type. City, county, utility authority or private developer. Unit-price, lump-sum or design-build.

• Remaining contract value and expected gross margin. Not just the dollar figure, but what you expect to earn on what is left.

• Funding source. Local capital budgets, state grants and federal programs each carry different timing and paperwork risk.

• Change order history. Municipal owners are slow to approve change orders. Unapproved changes sitting on your WIP schedule look like revenue to you and like risk to a buyer.

• Retainage. Money held back until completion. Buyers want to know how much is outstanding, on which jobs and how old it is.

Then show a few years of bid-to-actual margin. Contractors whose jobs finish at or above bid margin get paid for their backlog. Contractors whose margins shrink as jobs run get their backlog discounted.

Bonding Capacity: Your Surety Is a Silent Party to the Sale

Florida generally requires payment and performance bonds on public construction contracts (Fla. Stat. § 255.05). For a municipal water contractor, that makes your surety relationship part of the asset.

Here is why it matters in a sale. Your bonding capacity is underwritten on your company's balance sheet, your work history and often your personal indemnity. When the company changes hands, the surety will want to know who stands behind future bonds. A buyer with a strong balance sheet may expand your capacity. A buyer the surety does not know may need time to get comfortable.

Practical steps before you go to market:

• Get a current letter from your surety showing single-job and aggregate capacity.

• Know which bonded jobs would be affected by a change in ownership and what your surety will require.

• Plan how personal indemnities will be released at closing, and put that in the deal terms.

Owners who skip this step sometimes find out late in a deal that the buyer cannot bond the next project. That turns a closing into a renegotiation.

Licenses, Qualifiers and Operators

Two kinds of licenses matter in this sector, and both follow people more than companies.

Contractor licensing. Florida contractors act through a licensed qualifier. Underground utility and excavation work, plumbing and general contracting each carry their own license categories. If you are the qualifier, a buyer needs a plan for who carries the license after closing.

Plant operator licensing. If your company operates or maintains treatment plants, Florida requires licensed operators for drinking water and domestic wastewater facilities. Your licensed operators, and their license levels, are part of what a buyer is purchasing. A company with several licensed operators at senior levels is far easier to sell than one where a single person holds the required license.

Map every license, who holds it and when it renews. Cross-train and sponsor a second licensed person in each critical role well before a sale.

O&M Contracts Versus Capital Projects

Water contractors tend to earn money two ways, and buyers price them very differently.

Capital projects are construction: new pipe, new lift stations, plant expansions. Revenue is lumpy, margins vary by bid and every job ends.

Operations and maintenance contracts are recurring: running a plant, maintaining lift stations, cleaning and televising sewer lines, emergency response. These contracts renew, often for multiple years, and give a buyer visible future revenue.

If you have meaningful O&M revenue, put it at the front of your story with renewal history, term and margin. Buyers routinely value a dollar of recurring O&M profit above a dollar of one-time capital project profit. If O&M is a small part of your business today, growing it before a sale is one of the best moves available to you.

Who Is Buying Florida Water and Wastewater Contractors

The buyer pool is wider than most owners expect:

• Out-of-state contractors entering Florida, like Lee Contracting, who want local crews and municipal relationships.

• Infrastructure-focused private equity platforms building regional water and utility services groups.

• National engineering and construction firms adding self-performed construction capability.

• Employee-owned contractors using ESOP structures to grow by acquisition.

Each values different things. An out-of-state strategic pays for market entry. A platform pays for management depth and recurring revenue. A national firm pays for crews and qualifications. The right buyer for you depends on your mix, and a competitive process is how you find out who will pay most.

Pricing a Water Contractor: Adjusted EBITDA and the Normal Year

Contractors of this size are valued on adjusted EBITDA. Buyers swap the owner's pay for what a hired operations leader would cost, add back documented one-time items and then decide what a normal year looks like. That last step is where the arguments happen.

Expect a buyer to average strong and weak years, discount revenue from a single large project that will not repeat, and look hard at equipment age. Underground work is equipment-heavy, and deferred replacement of excavators, vacuum trucks and bypass pumps comes straight off the price.

We will not quote you a multiple before reading your books. The levers that move it are clear: share of O&M revenue, municipal customer diversity, bonding strength, licensed-operator depth and how much of the business depends on you personally.

The 18 Months Before a Sale

If a sale is on your horizon, these steps do the most to protect value, and most of them take longer than owners expect.

• Get reviewed or audited financials with a monthly WIP schedule that ties to the general ledger. Municipal backlog is only as believable as the accounting behind it.

• Clean up change orders and retainage. Push unapproved changes to resolution and collect old retainage so buyers see real numbers.

• Strengthen the surety relationship. Meet your surety, share your plans and ask what they would need from a new owner.

• Name a second qualifier and sponsor operator licenses so no single person holds the company's ability to work.

• Grow recurring O&M work with existing municipal customers, even in small contracts. It changes how buyers see the whole company.

• Refresh the fleet plan. Know which equipment needs replacement and when, and decide whether to buy it now or price it into the deal.

Which Path Fits a Water or Wastewater Contractor

Sailfish works two paths. For water contractors in the $5 million-plus range, a structured sale run by a mergers and acquisitions consultant is the right fit: a confidential information memorandum built around your backlog and bonding, a target list across all four buyer types, and negotiation of surety releases, earnouts and retention for key people. Smaller pipe and site contractors usually sell through our construction business brokers to owner-operators and regional competitors.

If your business is mainly residential water treatment, softener rentals or service routes, your buyers are owner-operators and regional dealers, and the playbook is different. Our water treatment business sale page covers that path.

How Sailfish Runs a Water Contractor Sale

We start with the backlog schedule, the surety letter and the license map, because those three documents answer most of what a buyer will ask in the first month. Then we rebuild adjusted EBITDA and normalize project lumpiness so your number survives a quality-of-earnings review.

We know roughly 3,500 active acquirers, and for this sector we cut that list down to the strategics and platforms actively looking for Florida crews and municipal track records. Every buyer signs an NDA and shows the capacity to close, including the ability to bond, before they see anything that identifies you.

Your crews, your municipal customers and your competitors find out when the deal is signed, not before.

Know What Your Crews and Contracts Are Worth

The next decade of Florida water work is already funded. Find out what that pipeline makes your company worth to a buyer. Schedule a confidential conversation with our mergers and acquisitions advisors.