Thoughts/experience with acquiring a service business that’s a union shop?

October 08, 2024

by a searcher from Johns Hopkins University in Leavenworth, WA 98826, USA

Searchfunders-

I am digging into a new opportunity close to home (public/private electrical utility shop near me) and using union folks for everybody in the field outside of operations (specifically the International Brotherhood of Electrical Workers). What I’m seeing so far: Pros: Better access to skilled/trained labor, competitive advantage in some bids, maybe a bit more stability, and better employee benefits. Cons: Higher labor costs, reduced flexibility in workforce management, and collective bargaining constraints.

What else am I missing?

I appreciate any insights you can share!

Reply by a searcher
from University of Central Missouri in Baltimore, MD, USA

In addition to pension liabilities, you'll want to think through what your exit looks like. Buyer universe will likely be more limited. Non-Union shops won't be interested and some PE won't mess with Unions... leaving you with larger union shops as buyers. Worth looking into the larger members of the local union.

Reply by a searcher
from Johns Hopkins University in Leavenworth, WA 98826, USA

Thanks, Ron & Eric- Great input. Unfortunately, Seems like a big portion of the service businesses in WA are union shops. Though, I guess from a labor standpoint, there are a few positives.

+1 more reply.

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