$16.5M
$1.6M
10.0x
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Established Florida commercial facility services platform providing recurring custodial, porter, maintenance,...
Why we like it
- The revenue is recurring and contract-based, which is the whole game in facility services. Custodial and porter work gets renewed automatically as long as the building stays open, producing predictable monthly cash flow that survives downturns because clean, functioning buildings are a non-negotiable operating cost, not a discretionary spend.
- This is a genuinely recession-resistant service. Commercial properties still need cleaning, porters, and maintenance whether the economy is booming or contracting, so revenue volatility should be low and driven mostly by occupancy and account churn rather than economic cycles.
- At $16.5M in revenue this is a real platform, not a route. That scale means the business likely has supervisory layers, regional density, and vendor relationships that a smaller acquirer could not replicate quickly, giving it defensibility on larger commercial bids.
- Florida is a structural tailwind. Population growth, commercial construction, and in-migration keep expanding the base of buildings that need recurring service, so an operator who holds accounts and wins new construction has organic volume coming to them.
How to improve it
- Attack the margin immediately. A 9.7% cash flow margin on $16.5M is low even for janitorial, so audit labor scheduling, overtime, supply costs, and route density in the first 90 days to find the 200 to 400 basis points that turn a 9.96x deal into a defensible one.
- Segment the contract book by profitability and renewal risk. Identify which accounts are subsidizing others, reprice or exit the money-losers, and lock the profitable anchors into longer terms with built-in annual escalators tied to labor inflation.
- Cross-sell adjacent services into the existing base. Every building already buying custodial is a candidate for maintenance, day porter upgrades, floor care, and specialty cleaning, and expanding wallet share on current accounts is the cheapest revenue you can buy.
- Build or tighten a labor retention system. In janitorial, turnover is the silent margin killer through rehiring, retraining, and quality complaints, so invest in wages, supervision, and scheduling tech to cut churn and protect account satisfaction.
- Install real financial reporting by contract and by service line. If the business runs on blended numbers, you cannot manage what you cannot see, so stand up job-level costing to know exactly where the $1.6M comes from before you deploy capital.
- Pursue tuck-in acquisitions of smaller regional janitorial books. At this scale you can consolidate route density and overhead, buying $1M to $3M revenue competitors at 2x to 3x and folding them into your infrastructure to arbitrage the multiple gap.
Diligence notes
- Scrutinize contract terms and concentration. Get the full account list with revenue per client, renewal dates, cancellation clauses, and notice periods, because a 9.96x multiple on recurring revenue is only justified if the contracts are truly sticky and not concentrated in a few accounts that could walk.
- Reconcile the cash flow figure hard. Confirm whether the $1.6M is true SDE or adjusted EBITDA, what add-backs are included, and whether owner labor and management are properly expensed, since the entire valuation hinges on the durability and honesty of that number.
- Investigate labor structure and liabilities. Verify employee versus contractor classification, wage rates, workers comp claims history, any union exposure, and pending labor disputes, because misclassification or comp claims can create large hidden liabilities in a workforce this size.
- Understand why the multiple is nearly 10x. Janitorial platforms typically trade at 3x to 5x, so probe the seller's rationale, whether there is a growth story or asset base justifying it, and be prepared to walk or renegotiate to a price that reflects true earnings.
- Confirm working capital and receivables health. A $16.5M services business carries meaningful AR and payroll timing, so review the receivables aging, days sales outstanding, and required working capital so you are not blindsided by a cash need at close.
Source
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