Buying or Selling a Restoration Company: The Complete Guide

Buying or selling a restoration company comes down to jobs a buyer can still dry, rebuild, or clear, a program or a referral source that survives a new name, and a lead who can take the next call when you are not in the truck. What trades is transferable cash flow after a real crew wage, invoices that match the bank, and equipment titled to the company. A mitigation firm that dries a house, a company that also rebuilds, and a remodeler who takes an occasional water job are different companies. Price a storm year as if it were every year and you will use the wrong multiple.

The short answer: an owner-operated firm, where you are still the estimator and the person the adjuster calls, often trades around 2x–3.5x Seller's Discretionary Earnings (SDE) after a real project-manager wage. A company with a lead already running jobs, written program agreements, and equipment titled to the company can move toward 2.5x–4.5x SDE. A managed firm a sponsor can add can be read on adjusted EBITDA. Trucks, drying equipment, and the building, if you own it, are usually separate from the multiple. Those ranges are directional. They are not a quote.

This guide is for restoration companies — fire, water, and mold mitigation, and the reconstruction that follows when you actually perform it. It sits on our construction sale page, next to the remodeling guide when the work is a planned renovation, and the commercial construction guide when the customer is an owner with a bid set. A general contractor who does not dry buildings is the general contracting guide. Do not blend a catastrophe spike with a kitchen remodel.

Companies that sell well have job files that match deposits, a second project manager, program status in writing, and equipment in the company name. Companies that sell poorly are a founder who still writes every estimate, one program at half the year, and a hurricane treated as the run rate.

This article is not legal, tax, insurance, or licensing advice. Who may perform mold work, how an insurance check must be endorsed, and what a program agreement allows change by state. Confirm them with qualified counsel before you sign a letter of intent. This guide is about selling a restoration company. It is not a guide to billing a claim.

Start with the construction sale page or a confidential business valuation.

Why Restoration Is Different

Restoration sells a response and a rebuild. Several facts change the price:

• The payer may not be the homeowner. An insurer, a third-party administrator, or a property manager may control the work and the check. A preferred-vendor slot is not a contract until you read the termination language.
• You may be the estimator. If every scope waits for you, that is key-person risk. A transferable firm has a project manager who has already closed a job you did not estimate.
• Equipment is collateral. Air movers, dehumidifiers, trucks, and meters on a note the buyer did not see come out of proceeds. A list with serial numbers belongs in the file.
• A storm is not a year. Catastrophe revenue belongs in the month it happened. It is not the weekly board.
• Mitigation and reconstruction do not share a cycle. Split dry-out from rebuild. A company that only mitigates should not be priced like a remodeling contractor.

Who Pays: Homeowners, Insurers, and Property Managers

Homeowners and direct work

Homeowners and direct work are the consumer file when the customer pays you, not an administrator. A written scope, a deposit, and a collection you can show. Cash that never hits the operating account will not survive diligence. A firm in Florida and a firm in Texas or the Carolinas can both be real revenue. Put the job file in the packet. Do not write the market as one coastline.

Insurance programs and commercial accounts

Insurance programs and commercial accounts are the stickier file when the agreement is real, and the riskier file when it is a handshake with an adjuster. One program or one property manager at a third of the year is concentration. Ask, before you list, whether the program will keep the buyer. The answer belongs in the letter of intent.

Main Street versus a lower-middle-market firm

Main Street is a few trucks, you estimating, and a license in your name. Price it on SDE. Lower middle market is a project manager who is not you, a separate mitigation crew and a rebuild crew, and more than one payer. That file can be read on adjusted EBITDA. Do not price a one-truck dry-out company like a multi-state restoration platform.

What Buyers Underwrite

Job cost and the mix

Job cost and the mix are the proof. Buyers want twelve to twenty-four months of revenue by type — water, fire, mold, reconstruction — and by payer, tied to deposits. A storm month belongs in that month. Receivables from an insurer who has not approved the scope are not cash.

Programs, licenses, and who can cancel

Programs, licenses, and who can cancel are the book. The agreement, the notice, and whether your credential is personal. A slot that can be pulled on thirty days is not a franchise. Mold and contractor licenses that sit in your name are a closing path, not a detail.

Equipment, trucks, and the shop

Equipment, trucks, and the shop are liens and capacity. Titles, what is in the field, and what is down. If you own the building, say so. Buyers price the operating company and the real estate separately. SBA 504 can finance a shop and long-lived equipment. It does not finance the goodwill of a program that can drop you.

Open jobs and draws

Open jobs and draws are the liability. A deposit or an insurance draw taken before the work is done is not earnings. Tie every dollar to a job, a percent complete, and what is left to buy. Warranty and a callback on a dry-out you already invoiced belong on the same schedule.

How Sellers and Buyers Should Read the Multiple

Use SDE when the owner is still estimating or still taking the night call. Add back only costs a buyer will not keep, and only after a market wage for the project manager and the crews. The valuation guide is the method. Equipment is not inside the multiple. A catastrophe year should be normalized before anyone multiplies it.

Getting the File Ready

Twelve to thirty-six months is the useful window. The sale-prep roadmap is the sequence. For a restoration company, the work is specific: a project manager on jobs you do not estimate, equipment titled to the company, revenue split by service and by payer, and the program language in writing. Keep the process quiet. A program that hears about a sale from a post may move the territory. The confidential sale guide is the rule.

Who Buys a Restoration Company

A project manager who wants the book, a restorer entering a market, and a buyer who wants the equipment with the program are the usual buyers. They do not underwrite the same file. The individual needs SBA, a license path, and sometimes seller financing. The 7(a) cap is $5 million. The strategic buyer will ask whether the program consents. A service-business sale fails when the only person the adjuster will call is you.

Diligence, Financing, and the First Ninety Days

Diligence is job files, tax returns, titles, licenses, program agreements, and receivables. The diligence guide is the calendar. Expect a lender to recast a storm year, related-party rent, and a wage you never paid. Working with an SBA lender means the equipment list matches the titles and the draws match the bank.

A holdback shows up when one program is the year or the qualifier is you. Tie it to a date. The earn-out note is the structure. A firm that cannot take a Monday call without you is a job with a phone.

What Moves the First Offer

A program that can cancel, a license in your name, and a storm you annualized belong in the letter so the price is for jobs a buyer can still run. Name the project manager, the wage, and the jobs they already estimate. A buyer who has not met that person will price a hire. Put the largest payer next to that name. Two years by month keep one hurricane from becoming the margin. Include open draws, callbacks, and equipment that is down. Mitigation and rebuild should be two lines, not one blended gross profit. The close should not assume a Friday wire if the program consent or the qualifier is still only you. Write the next on-call week and the lead's name on the closing checklist before you ask for a price.

A company in Florida and a company in Texas, Ohio, or the Carolinas can both be a real book. The file is the job cost and the program, not the state on the truck. Ask for the payer mix before you negotiate. Receivables older than the program's usual pay cycle should be visible, with a note on which ones are in dispute.

A buyer who has walked one dry-out will still ask who estimates when you are out, which program can cancel, and which meters and trucks are titled to the company. Answer with a name, the agreement, and a serial-number list. Water, fire, mold, and rebuild should be four lines across two years, with the payer named. A hurricane month stays in that month. Equipment in the field on jobs you have already invoiced is still your collateral until the note is paid. Callbacks and a scope an insurer has not approved are not finished margin. If the qualifier is you, the letter should say how the license moves and how many weeks you stay. The first offer moves when that path is written and the project manager is the one opening the next job file. List air movers and dehumidifiers by serial number, including units on jobs, and say which notes a lender will pay off. A callback you have not reserved, and a program that pays only after an inspection, should be visible before anyone treats last quarter as cash. Name the technician who takes the night call this week. Put the on-call rotation and the largest open job on the closing checklist before you sign, including the draw already collected and the work still left to buy before anyone treats the backlog as cash in hand today.

Talk With Bridge Point

If you are preparing to sell a restoration company — or you are a buyer who can staff the crews and hold the program path — Bridge Point Business Brokers can help you value the jobs and the equipment separately, and keep the process confidential. Start with a valuation or contact us at (352) 515-0226.