Commercial Cleaning / Janitorial multiples?

searcher profile

April 29, 2024

by a searcher from Columbia University - Columbia Business School in Boston, MA, USA

Hello everyone,

I'm looking at a janitorial company in the Northeast. $2 million EBITDA and 10% CAGR revenue growth over the past 4 years. Their clients are schools, offices, hospitals, warehouses, etc.

Does anyone have an idea of what the EBITDA multiple ranges are for this type of business?

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commentor profile
Reply by a searcher
from Cornell University in Venice Beach, Los Angeles, CA, USA
I agree with a lot of what ^redacted‌ has up there, with some minor modifications. I'd echo that recurring revenue, length of contracts, and employee turnover are extremely important. End Markets are one thing I'd look at too. Healthcare, Education, Industrial, all fetch higher multiples than office space, for instance. The formers are more stable and can be more complex cleaning jobs. At the end of the day, this business is about managing low skilled labor, so it's all about operations, systems, processes, training, etc.

Under $1mm EBITDA you can get cheaper, 2-4x and put some creative structures in. Once you get to $9-10mm I'd say those are 8-10/11x businesses.

I've brokered a few janitorial deals, know some talented operators, and am always happy to connect and be a resource--feel free to send me a direct message.
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Reply by a searcher
from The University of Chicago in Nashville, TN, USA
You may have already taken a look but if not, the BVR Transaction data and the IBIS World information available through Seachfunder (top bar) can be a great sanity check. I have found it incredibly useful since I'm doing a geographically based search and as a result I end up poking around in a number of industries.

I did a quick search and found around###-###-#### 5x but that with the growth they are seeing they may be able to justify higher. The transaction data through BVIR can also provide some insight on margins and ratios based on revenue as well.
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