Selling a restoration company

Pipes burst, kitchens catch fire and storms hit in good economies and bad, and someone has to be on site within hours. That need-driven demand, spread across many small local companies, is what draws consolidators. FirstService says its Brands division, which includes Paul Davis and First Onsite, competes mainly with local, regional and family-owned businesses¹⁰.

Private equity has built several restoration platforms in recent years. Alpine Investors launched Guardian Restoration Partners in April 2024, and that August Guardian added Quick Dry Restoration in Idaho and Spartan Emergency Water Removal in Virginia¹². Alpine later reported that Guardian bought five more restoration businesses in 2025, for 14 since launch¹³. In December 2025, Summit Partners backed Fortify Companies acquired Rytech Restoration, a franchise network of more than 100 locations¹⁴.

New platforms are still forming. In June 2026, Brenton Point Capital Partners invested in Merit Restorations, a Virginia mitigation and reconstruction contractor, and said Merit is positioned to make add-on acquisitions¹⁵. In May 2026, Summit Restoration Group, backed by Point 41 Capital Partners, partnered with Capital Construction Services and Capital Fire & Water in Richmond, taking that platform beyond its Atlanta base¹⁹.

Whether you would be a platform or an add-on changes the conversation. A platform buyer studies your managers and systems as closely as your numbers. An add-on buyer focuses on your referral relationships, crews and market. When Roebling Capital's All Claims Repairs acquired Clarke Contractors in Cincinnati in March 2025, Clarke's team kept running daily operations and its owner became CEO of the combined company¹⁶.

You are likely to hear from several kinds of buyers:

• Private equity backed restoration platforms seeking add-ons in new cities or new capabilities, such as reconstruction, contents or large loss.
• Private equity firms seeking a first restoration platform, usually a company with managers beyond the owner.
• Strategic buyers, including franchisors and large restoration operators. FirstService says the Paul Davis locations it owns were mainly bought from franchisees¹⁰.
• Family offices and independent sponsors, which often hold longer and buy one company at a time.

The first thing a buyer wants to understand is where your jobs come from: insurance carrier programs and third-party administrator networks, plumbers and other trades, property managers, commercial accounts and direct calls. Show that mix as jobs and revenue by source for three to five years. Brenton Point cited Merit's relationships with insurers and claims administrators as a strength¹⁵, while All Claims Repairs describes a model that leans less on administrators¹⁶. What matters is that you know your mix and can explain it.

Next is revenue by job type. Mitigation work such as extraction, drying, tear-out and mold remediation moves quickly and earns different margins from reconstruction, which ties up crews, subcontractors and cash for longer. Buyers will ask for gross margin on each line and how much rebuild work you keep after your own mitigation jobs. Companies that carry a loss from first call through rebuild, as Merit and Clarke do, keep more of each claim¹⁵¹⁶.

Credentials are part of what a buyer is paying for. The IICRC publishes the trade's main standards, including S500 for water damage, S520 for mold remediation and S700 for fire and smoke¹. It certifies technicians in areas such as water damage restoration, applied structural drying, microbial remediation and fire and smoke restoration², and runs a separate Certified Firm program³. A buyer will count who holds which certifications and whether they plan to stay.

Where states license mold work, buyers check who holds the license. Texas licenses mold remediation contractors and companies separately⁴. New York requires a license to advertise or perform mold assessment or remediation, bars one person from both assessing and remediating the same property, and licenses individuals and businesses separately⁵. If you rebuild homes built before 1978, the EPA's Renovation, Repair and Painting rule requires the firm itself to be certified⁶.

Buyers also look at how fast you get paid. Insurance work can wait on adjuster approvals and scope disagreements, so collections often run slow. An aging report by payer, with an explanation for anything old, shows how much cash the business needs. Expect a close look at your equipment and vehicles, and their age, too.

A hurricane, a deep freeze or a hail season can double a quarter, and buyers will not value a storm year as if it will repeat. FirstService tells investors that organic growth at its restoration brands depends partly on weather-driven claims, which are hard to predict¹¹. In the fourth quarter of 2025, its Brands division's organic revenue fell 7%, mainly because its restoration brands saw fewer weather events and large-loss claims than a year earlier¹¹.

Storm work also moves cash. FirstService said its 2025 operating cash flow was helped by working capital, because its restoration businesses saw milder weather than in the storm-heavy year before¹¹. Most owners know the pattern: a busy catastrophe season builds receivables and ties up cash until carriers pay. A buyer will check whether your storm receivables were collected, and how long it took.

The strongest presentation splits revenue into two lines: the base business from everyday water, fire and mold losses in your home market, and catastrophe work, including storm deployments outside your territory. Show both for at least three years, with gross margin for each. When a buyer can see a steady base and treat storm revenue as upside, the discussion centers on your core company rather than your best year.

If last year's earnings were lifted by one event, say so up front and show what a normal year looks like. Buyers find out anyway, and a surprise in diligence costs far more than candor at the start.

Most issues that hurt restoration deals are visible well before a sale, so most can be worked on:

• One program or one payer. If a single carrier program, administrator network or commercial account drives a large share of jobs, a buyer will ask how much of the business would remain if that relationship ended or changed its terms.
• Relationships held by the owner. If adjusters, agents, plumbers and property managers all call your cell phone, the buyer is really buying you. Spread those relationships across your project managers and business development staff.
• A storm year presented as normal. Catastrophe-season earnings offered as the run rate usually get cut in diligence, often late, when there is little room to negotiate.
• Slow or disputed receivables. Old balances, open supplements and jobs without signed completion paperwork read as risk, as do large year-end write-offs.
• License and certification gaps. A mold license held only by the owner, lapsed certifications, or pre-1978 rebuild work without EPA firm certification⁶ will surface in diligence.
• An aging fleet or thin job costing. Worn equipment means spending soon, and missing job-level margins force a buyer to guess. Both tend to come off the price.
• Unclear Florida collections. A law passed in a December 2022 special session bars policyholders from assigning post-loss benefits under residential or commercial property policies issued on or after January 1, 2023⁸⁹. Buyers will want to see how you get paid now, and how much of your receivables still rests on older assignment agreements.

Franchise owners are very much part of this market. In May 2025, Azalea Capital combined ASAP Response, a Rainbow Restoration franchisee, with the Greenville, South Carolina Rainbow franchise it already owned to form Southeastern Restoration Holdings¹⁷. In December 2025 it added Old Dominion Disaster Restoration, which runs Rainbow franchises in Virginia¹⁸. In both deals the selling owner stayed on as CEO and kept an ownership stake¹⁷¹⁸.

If you are a franchisee, your franchisor will almost certainly have a say. Federal rules require a franchisor's disclosure document to summarize, in Item 17, how the agreement defines a transfer, whether the franchisor must approve one, the conditions for approval, and whether the franchisor has a right of first refusal or an option to buy your business⁷. Those terms shape your list of possible buyers before you talk to anyone.

Read your agreement and the current disclosure document early. Note the remaining term, renewal conditions, transfer fees, training requirements for a new owner and territory protections. Ask whether the franchisor has approved sales to private equity backed groups before, and what it required. Franchisors can be buyers too: FirstService's company-owned Paul Davis operations came mainly from franchisees¹⁰.

Independent owners face a version of this too. Carrier programs and administrator networks may need to approve or re-credential your company after a sale, so ask each one how it handles a change of ownership before you sign a letter of intent.

Most restoration deals pay a large share of the price in cash at closing and tie the rest to the future through rollover equity, an earnout or sometimes a seller note. With rollover, you keep a stake in the larger company and share in its value when the platform is sold again. A Merit co-founder and the owners of ASAP Response and Old Dominion all kept ownership stakes¹⁵¹⁷¹⁸.

Earnouts are a natural tool in restoration, because storm revenue makes it hard to agree on a normal year. If a buyer proposes one, focus on the definition. An earnout based on base revenue or base gross profit, with catastrophe work measured separately, is easier to reach and harder to dispute than one based on total EBITDA in a quiet weather year.

Expect the buyer to set a normal level of working capital, mostly receivables and work in progress, that must stay in the business at closing. Because restoration receivables rise and fall with storms, the months used to set that level matter. Ask how it was calculated and test it against your own seasonal pattern.

Your role after closing should be clear on paper. Some sellers stay on to lead, as at ASAP Response, Old Dominion and Clarke Contractors¹⁶¹⁷¹⁸. Others step back, as Rytech's founder did when he retired after the Fortify deal¹⁴. Many buyers keep local brands: Guardian said Quick Dry and Spartan would keep their own names¹², while Summit Restoration Group created a shared platform brand¹⁹. If you own your building, a lease to the buyer or a separate sale can be part of the deal.

Good preparation for a sale is also good management, and none of it commits you to selling. Start a year or two ahead, so your numbers have time to reflect the changes:

• Split revenue into base and catastrophe work for at least three years, by month, with gross margin for each.
• Break out revenue and margin by job type: mitigation, mold remediation, reconstruction and contents.
• Build a referral source report showing jobs and revenue each year from every program, network, plumber, property manager and commercial account.
• Run an aging report by payer, and clear old balances, open supplements and missing completion paperwork.
• Introduce your project managers to adjusters and referral partners so relationships do not run only through you.
• List every license and certification, who holds it and when it renews, including state mold licenses and EPA firm certification where they apply⁴⁵⁶.
• Inventory equipment and vehicles with age and condition, and decide what to replace before a sale.
• If you are a franchisee, review your agreement's transfer terms with a franchise attorney⁷.