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Now Available: The Northwest's Leading Commercial Waterproofing Company

Sixty cranes crowd the Seattle skyline. Companies like Boeing, Amazon, Google, and Microsoft have turned the city into one of the hottest construction markets in the United States. Inland Waterproofing is the area’s premier installer of state of the art membranes, coatings and panels. They have a strong Seattle focus, but are licensed in adjacent states where more growth awaits. They have 100-125 jobs under contract at any given time and work for many of the region’s largest general contractors. Rick and Shelley own Inland Waterproofing and told me about their journey: “We went from 15 odd years ago working on a small residential house with a basement to now working on projects that are 50+ stories…that go nearly 100 feet down underground with parking garages.”


Walking through downtown Seattle with Rick and Shelley, is like watching a child explain their playground to a new visitor.

As we walk they excitedly gesture to a new 50-story building, then over to another giant rising out of the ground from its foundation, then point off in the distance to a 40+ story that’s half complete. These are jobs they know intimately and are eager to show off.


Recently, Inland Waterproofing also completed a huge contract with Boeing, waterproofing the 777X wing factory in Everett, Washington. Remarkably, most of the work was done below the water table, making the integrity of the work mission critical. Boeing made a $1 billion dollar investment when developing the 1.3 million-square-foot factory and Inland’s waterproofing application is now protecting the largest building in the world.

Industry News

(Aug, 2017) The Seattle Times - Boeing Reversing Years of Outsourcing

(July, 2017) The Seattle Times - Seattle Has Most Cranes In The Country

(April, 2017) The Seattle Times - Bellevue, WA Springs Up

(March, 2017) KING 5 News - Seattle Construction Projects At All-time High

(March, 2017) The Seattle Times - Record Construction Frenzy Sweeps Downtown Seattle

Fact Sheet

Industry:

Specialty Construction

Headquarters:

Seattle, WA & Beyond

Business Type:

Building Envelope Specialist

Online Presence:

Website

Years in Operation:

12

Number of Employees:

60

EBITDA:

$3.1M (2016)

$2.5M (2015) 

Industry Growth Trend:

6.3% in 2016

Company Growth Rate (NI):

9.1% in 2016

Projected Growth Rate (NI):

10% in 2017

EXIOSCORE:

86 (50 is average)

Price:

$11.5M

Under The Hood

Nearly every commercial building requires waterproofing below grade as well as several locations above grade. This is a rapid growth business with a highly skilled and dedicated work force and low turnover rate. Inland has a deliberate corporate culture where everyone is committed to meeting or exceeding the client’s expectations. The secret sauce includes the successful management procedures overseen by experienced field managers and supervisors. They’ll tell you the installation teams are the absolute best – seasoned and efficient, getting a steady stream of accolades from large commercial clients who know the difference. They also have a unique licensing niche. Inland is one of very few companies licensed and certified to install the state of the art waterproofing products. Together, these strong advantages result in profits of $40,000/employee vs an industry average of $15,000.

Opportunity

When Rick and Shelley first contemplated selling Inland, they realized that like most businesses their size, they play an outsize role in its success. Consulting with Exio to turn this weakness into a strength among other companies like theirs on the market, they began to change that in the summer of 2016.

"I have to put my finger on the pulse of the market and that's critical to be successful." -Rick Carlson

Rick and Shelley reduced their roles by uptraining key people into their skillsets. Growing Inland Waterproofing will require this management adjustment, and by embedding these skills more deeply into the business, they have made it easier for a new owner to focus more attention on growth. Since completing the process, a couple long out of town trips have successfully seasoned their staff. Changes also included hiring skilled office management, and training them for autonomous operation. 


These adjustments in the management structure will also allow a new owner to quickly capitalize on what Rick and Shelley see as major opportunities for growth. These opportunities are both geographic — expanding into the Portland, Oregon market — and product/service related. For instance, if a contractor asks, they will also install an air barrier system, but it’s not part of their regular service offerings. Rick sees that as a significant growth opportunity, “As much as I hate to say it … I could literally start another company doing [just] air barrier systems.”


In a similar vein, they also find it profitable and time efficient to include installation of pedestal pavers on plazas in their work when requested. These often surround Inlands’s core work or are installed atop their water control membranes at grade. The teams are already trained and certified, and enjoy this exacting work – making it another expansion opportunity.

"A lot of general contractors have told us, 'You guys need to go to Oregon! You need to be in Oregon, we need you down there." -Rick Carlson

Regarding Portland, it is a similar West Coast metro market, separated by 150 miles from Seattle. The footprint of the large general contractors who trust Inland to perform includes Portland and beyond. This leads to frequent requests to bid on business there by loyal clients. Opening an office there would likely pay its way on the strength of existing clients alone.

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Their Secret Sauce Is Their People

Within 3 minutes of arriving Shelley is shouting good-naturedly across a vast construction site, “Hey FU!” F.U. is what Shelley calls one of their most valued employees. The way Shelley explains it, Inland Waterproofing has a lot of Fransiscos that work for them. There’s Fransisco Gonzalez, Fransisco Uzman, etc. So Shelley shortened his name to “F.U.”

We found out early that the employees are the most important asset that we have by far - it's not vehicles, it's not tools, it's not any of the equipment. It's the employees." -Rick Carlson

FU waves back from a 4th story deck. He’s above an open courtyard with 30-40 decks facing in on it. “Hello, Shelley!” FU has been with Inland for 12 years and has come with them over from Spokane to Seattle to help handle the work load. He’s the absolute best at applying the final traffic coats to deck surfaces. Shelley tells me that he’s a perfectionist about the finish and texture. He’s also ridiculously fast. We have to tell him to pause three times for the camera so that we can get our shots. 


In an industry known for manual labor and a highly transient workforce, Inland defies the odds. They look for brains not brawn when hiring, use bonuses based on longevity, and expend great effort to protect their crew from being jerked around on the job site.

Exio Spotlight: Enterprise Stability

Inland’s owners have responded to input gleaned from interested buyers like you over the last few months. They’ve further addressed readiness for new owners with the following:

> Exio rebranded the company with a fresh look that will be contemporary for the coming years.

> Inland recently completed training long term managers to handle 100% of daily operations, including Rick's estimating, job costing, and client relations tasks. For Shelley's area, they hired a professional Office Manager and trained heavily on client interactions, staff management and the unique billing process. To stress test this arrangement, they have now been on two extended trips and are proud they are no longer needed for day-to-day operations and earnings growth.

> The training focus has continued apace to maintain their unblemished record, with zero claims on workman's comp — ever.

Competitive Advantage

Success does not happen by accident. Two key factors support Inland Waterproofing’s growth in the market. First, they understand the high-stakes nature of their service. Shelley said it best, “Our motto is we have one chance to get it right. When we’re working on walls that are 60, 70, 80 feet below grade, you’re not going to excavate [later] to find where the issue is.” They take that long view with relationships as well. Whether it’s a timing emergency, inclement weather, ice covering a whole work surface, or other contractors punching holes in their water barrier, they’ll find a way to solve the problem and help the general contractor win. That well-known Inland reputation means a great deal in the world of premier commercial construction.

"I will always find a way to work it out with project managers. We're all in this together. I'm going to see these same people [again], hopefully soon." -Shelley Carlson

A second factor that significantly improves job control in the market is their exclusive materials certifications. Inland Waterproofing is one of only four companies licensed to install CETCO’s products in the state of Washington and the only company with CETCO certification in Idaho and Montana. There are a number of other key products they hold certifications for, making them part of a very exclusive group that can bid on the largest commercial projects. The quality of Inland Waterproofing’s installations are widely trusted by building envelope consultants who recommend Inland by name to general contractors. These third-party experts specify the waterproofing requirements and then review the installation to ensure a building is sealed properly, acting as gatekeepers both on the bid side and the inspection side.

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WHAT'S NEXT?

Get a behind-the-scenes look at how Inland Waterproofing performs:

  • Valuation report and source data (including 5 years of financial records).
  • Detailed analysis of Inland's strengths, weaknesses, and opportunities.
  • A 15 minute video interview with owners Rick Carlson and Shelley Ourada where we ask them about performance reviews, difficult leadership moments, employee compensation, corporate philosophies and more.
  • 200 pages of Exio’s proprietary analysis to jumpstart your due diligence process.
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