Established Restoration Company, Missouri Water & Fire Restoration Contractor

$5.7M

Revenue

$1.1M

SDE

5.5x

Multiple

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Full Editorial Writeup

This Missouri-based restoration company handles the full arc of property damage work: emergency mitigation for water, fire, smoke, mold, and odor events, followed by structural reconstruction and rebuild. It serves both residential and commercial clients, works with all major insurance carriers, and operates as a non-franchise, meaning no royalty drag and no territory caps on growth. On roughly $5.66M of revenue it produces about $1.09M of cash flow, a healthy 19% owner-earnings margin for a restoration contractor.

The integrated mitigation-to-rebuild model is the real story here. Most restoration shops do the emergency dry-out and then hand the rebuild to a GC, leaking margin and control. By keeping the whole job in-house, this business captures both the high-urgency mitigation dollars and the higher-ticket reconstruction revenue, which is where restoration operators make their money. That vertical integration is what drives the margin profile and the repeat flow from insurance adjusters.

The listing emphasizes an experienced, trained staff already in place, which is the single most important asset in this trade. Restoration is a people-and-certifications business: IICRC technicians, estimators who know Xactimate, and carrier relationships are what actually generate revenue. Priced at $6M, roughly 5.5x cash flow, this is an SBA-approved deal aimed at a buyer who can step into a running operation rather than rebuild a team.

Why we like it

Earnings quality is solid for the trade, with about $1.09M of cash flow on $5.66M revenue, a 19% margin that reflects the captured reconstruction work most restoration shops give away. The listing claims revenue grew year-over-year with profitability improving on cost discipline, which if verified supports the full 5.5x ask. Insurance-funded work also tends to collect reliably once scopes are approved.
The moat is the combination of carrier relationships, certified technicians, and an in-house mitigation-to-rebuild model. Being non-franchise means no royalty fees and no territory restrictions, so a buyer keeps 100% of the economics and can expand freely. Adjuster referral networks take years to build and are hard for a new entrant to replicate.
Demand is genuinely non-discretionary and counter-cyclical. Water, fire, and mold losses happen regardless of the economy, and the work is paid by insurance carriers rather than homeowner wallets, which insulates revenue from downturns. Climate volatility and aging housing stock keep the loss pipeline full.
Operator advantage is strong because the trained staff stays through the transition, lowering key-person risk versus an owner-dependent shop. A buyer with reconstruction, sales, or marketing muscle can push the reconstruction attach rate and open adjacent counties without franchise permission. SBA approval widens the buyer pool and reduces equity required to close.

How to improve it

Audit the mitigation-to-reconstruction attach rate in the first 90 days and set a target for converting more dry-out jobs into full rebuilds in-house. Every job that currently gets handed to an outside GC is leaked margin that belongs on your P&L.
Formalize and deepen carrier and adjuster relationships by pursuing preferred-vendor or Third Party Administrator program status with the top insurers. Program enrollment converts sporadic referrals into a steady, defensible job pipeline that survives owner transition.
Build a 24/7 commercial emergency-response program with proactive outreach to property managers, facility managers, and commercial insurance brokers. Commercial losses carry larger tickets and better margins than residential, and the recurring relationship with large property owners is the closest this trade gets to recurring revenue.
Tighten estimating and job costing using Xactimate discipline and real-time project tracking to protect the 19% margin as volume scales. Restoration margins erode fast when field labor and supplements are not managed tightly, so instrument the gross margin per job before growing.
Invest in digital lead generation and local SEO so the business captures homeowner-initiated emergency searches, not just adjuster referrals. Owning the first call lets you steer the claim and lock in the rebuild before a competitor shows up.
Evaluate a tuck-in or geographic expansion into adjacent Missouri counties now that there are no franchise territory limits. A second crew footprint spreads fixed overhead and increases catastrophe surge capacity, which carriers reward with more volume.

Diligence notes

Verify the claimed year-over-year revenue growth and margin improvement against tax returns and monthly P&Ls for the trailing three years. Restoration revenue is lumpy and weather-driven, so confirm the current-year uptick is structural and not a single large CAT event or a few oversized jobs.
Scrutinize customer and carrier concentration, since a book heavily dependent on one or two insurers or one adjuster relationship is a real risk. Ask what share of revenue comes from the top five accounts and whether those relationships are personal to the seller or institutional.
Confirm the technician certifications, estimators, and project managers are employees who intend to stay post-close, and check for any non-compete or retention exposure. The entire valuation rests on the trained staff, so key-person departure risk must be quantified before closing.
Examine work-in-progress, accounts receivable aging, and insurance supplement collections, as restoration companies often carry large receivables tied to pending claim approvals. Slow or disputed carrier payments can mask the true cash conversion behind the reported $1.09M cash flow.
Pull licensing, bonding, insurance, and any past litigation or warranty claims on completed reconstruction work. Mold and structural rebuild carry liability tails, so confirm clean compliance and adequate coverage before assuming the obligations.

Source

Originally listed on BusinessBroker.net. View original listing →