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Kingsway Financial Services Acquires Southside Plumbing for $5.625 Million

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#Kingsway Financial Services Acquires Southside Plumbing

In a strategic move, Kingsway Financial Services Inc. has announced the acquisition of Southside Plumbing, a prominent plumbing service provider based in Omaha, Nebraska. The acquisition was finalized on August 14, 2025, for a cash purchase price of $5.625 million, with a potential earn-out bringing the total maximum purchase price to approximately $6.75 million.

#Details of the Acquisition

As part of the acquisition agreement, Kingsway will pay $4.0 million in cash at closing and will provide a seller note worth $0.5 million, which is due in 2030. The earn-out component, valued at up to $1.125 million, is contingent on Southside Plumbing's growth in adjusted EBITDA between the years 2026 and 2028. For this payout to be fully realized, the company must achieve a 75% increase in adjusted EBITDA compared to its last reported figures.

#Financial Profile

Southside Plumbing has reported unaudited pro-forma annual revenues of approximately $4 million, with adjusted EBITDA around $0.9 million. A notable aspect of its financial profile is the recurring revenue stream that accounts for 70% of its revenues. This model positions Southside Plumbing favorably for sustained growth, particularly within the service and repair business, which has been growing at an annual rate of about 20%.

#Growth Potential

Kingsway anticipates that Southside Plumbing will further enhance its market presence through increased marketing initiatives and an expanded range of services. The company's strong reputation for quality and reliability serves as a solid foundation for potential growth in both commercial and residential sectors. Currently, the customer base is predominantly commercial, making up 70% of total clients.

#Support from Financial Institutions

To facilitate the anticipated growth, Kingsway has entered a new financing arrangement with Newburyport Five Cents Savings Bank. This agreement includes a commercial term loan with a fixed interest rate and provides access to a revolving credit line. These financial tools will be instrumental in supporting Southside Plumbing's operational and expansion efforts.

#Management Continuity

Josh Gruhn, the founder and President of Southside Plumbing, will continue to lead the company following the acquisition. Gruhn's ongoing involvement is expected to aid in the seamless transition of operations and leverage his extensive industry experience to boost business performance and reputation.

#Key Takeaways

  • Kingsway Financial Services acquired Southside Plumbing for $5.625 million, with potential future earn-out opportunities.
  • Southside Plumbing boasts annual revenues of approximately $4 million and a strong recurring revenue model.
  • The acquisition was supported by a new credit facility aimed at promoting growth within the plumbing services sector.
  • Josh Gruhn will remain President of Southside Plumbing, ensuring continuity of leadership and expertise.
  • The company is poised for expansion, particularly through enhanced marketing and service offerings.

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Frequently Asked Questions

Kingsway Financial Services has acquired Southside Plumbing for a purchase price of $5.625 million, with a potential earn-out of up to $1.125 million, bringing the total maximum purchase price to $6.75 million. This strategic acquisition is expected to enhance Kingsway's portfolio in the skilled trades sector.
Southside Plumbing represents the third acquisition under Kingsway's Skilled Trades platform, aligning with the company's strategy of acquiring asset-light businesses with strong recurring revenue models. This move is seen as a means to drive long-term growth and value for shareholders.
Southside Plumbing is projected to generate unaudited pro-forma annual revenue of approximately $4.0 million, with an adjusted EBITDA of $0.9 million. Given its strong reputation and recurring revenue streams, it is anticipated that the business will outperform in the growing Omaha market.
Kingsway believes Southside Plumbing has significant growth potential, particularly through enhanced marketing efforts and the introduction of new service lines. The strong positive momentum in its service and repair business, currently growing at around +20% per year, further underscores strong prospects for future expansion.
Kingsway has secured a new credit facility to support growth initiatives across its Skilled Trades platform. This financial backing, consisting of a commercial term loan, provides the necessary resources to capitalise on Southside Plumbing's market opportunities and further develop its operations.
With approximately 70% of trailing 12-month revenues from recurring or reoccurring sources, Southside Plumbing's model provides a stable revenue base. This recurring revenue stream is crucial for sustained profitability and provides a solid foundation for future growth.
Josh Gruhn, the founder and President of Southside Plumbing, will continue to lead the company post-acquisition while also maintaining an economic interest. His ongoing involvement is expected to facilitate a smooth transition and leverage his deep industry knowledge to further enhance the business.
This acquisition is in line with Kingsway's strategic objective of expanding its portfolio of high-quality, asset-light businesses with strong growth potential. By focusing on sectors like plumbing services, Kingsway aims to deliver superior long-term value to shareholders through effective management and operational excellence.