Hi everyone, I’m looking at an established engineering and contracting business in Northern California. It serves hospitals, data centers and large commercial buildings, and one of its main advantages is the set of contractor licenses it holds. Those licenses let clients hand it entire projects instead of splitting the work across trades. The challenge is that two of the key licenses, the C-10 (Electrical) and the plumbing license held by the company, are qualified by the owner as RMO. As I understand CSLB rules, once the qualifier leaves, the company has 90 days to replace them, with one possible 90-day extension. Here are the options I’ve considered and my concerns with each: - An existing employee qualifies as RME. This puts too much leverage in one employee’s hands, and the business stops if they leave. - Bringing in an outside licensed consultant or qualifier. I’m not sure it would hold up, or that it would be stable enough to support acquisition debt. - Acting as the prime contractor and subbing out the licensed work. This may still require a prime license, and it gives up much of the one-stop-shop edge and the margin. - Bringing in a licensed operating partner with equity. This seems the most durable, but it’s the hardest to find. I’d love to hear from anyone who has dealt with this: how did you solve the qualifier problem, and how long did it take, when you bought a licensed trades or engineering business? Did you make the license transition a closing condition, or have the seller stay on as RMO for a set period? How did you structure the seller’s pay or holdback for that? Did lenders (conventional) require a specific licensing plan before they’d fund? Are you, or do you know, a C-10 or plumbing license holder interested in a partnership or equity role in an acquisition? Thanks in advance! Any experience or lessons learned would be very helpful. Kelsi