For businesses valued from $5M to $100M+
Considering selling your building services business?
Janitorial, facilities and building maintenance companies are valued on contract quality. Buyers care far less about total revenue than about how long the contracts run and how cheaply the routes can be served.
- Average contract length
- Renewal rate
- Route density
- Gross margin per account
- Labor turnover
- Self-performed versus subcontracted
- Wage escalators
- Customer concentration
- Adjusted EBITDA add-backs
What building services buyers are actually underwriting
Contracted revenue and route density are the two things that decide the number.
A tight cluster of accounts within one metro is worth substantially more than the same revenue scattered across three, because the cost to serve is lower and the buyer can layer it onto an existing route. Contract length and renewal history determine whether the revenue is treated as recurring at all.
Wage pressure is the other question every buyer asks. Contracts without escalation clauses have quietly compressed margin across this sector, and buyers will trace three years of gross margin to find out whether yours have held.
What gets examined closely
- Average contract length and auto-renewal terms
- Historical renewal and loss rate, account by account
- Route density within each metro you serve
- Gross margin per account and how it has moved with wages
- Labor turnover and wage pressure in each market
- Self-performed versus subcontracted work
- Customer concentration, particularly with property managers and REITs
- Whether supplies and consumables are pass-through or margin
Who buys building services companies
Private equity platforms and their add-ons
Facilities services roll-ups want contracted recurring revenue and density. They will model the route economics themselves, so the cleaner your account-level reporting, the closer their number is likely to be to yours.
Strategic acquirers
National facility services firms buying geography, contract bases or specific customer relationships. Where a strategic already serves the same buildings for a different service line, cross-selling can support a stronger number.
Which type of buyer suits you depends less on the multiple than on what you want afterward: a clean exit, a second bite through rollover equity, or a few more years running the business with someone else's balance sheet behind it. That is worth deciding before you go to market rather than during.
- Month-to-month contractsRevenue a customer can cancel on thirty days' notice is not valued as recurring, however long it has actually run
- Thin route densityScattered accounts cost more to serve and are worth less to a buyer than a tight territory with the same revenue
- Wage increases that were never passed throughMargin compression traced to contracts without escalators shows up directly in the multiple
Where building services owners lose value
Almost always in the same three places, listed alongside. None of them are inevitable, and all three are decided well before a letter of intent is signed.
Renewing key accounts onto longer terms with escalation clauses, before you go to market, is slow work that changes the valuation more than almost anything else available to you.
Request a confidential valuation.
An advisor who works in facilities and building services will review your business and give you a real range.
- No cost, no obligation, strictly confidential
- Grounded in what buyers in your sector are paying now
- Useful whether you sell next year or in five