Pest control business, owner is qualifying applicator, mixed recurring and one-time revenue
§ 01 · Observed
What was documented in diligence.
Pesticide applicator license: owner is the qualifying individual; state requires re-examination by new qualifying individual — estimated 3–4 month timeline. Owner route service: 22 stops per week at an average of $95 per stop = $109,000 annual revenue requiring replacement at $62,000 fully loaded technician cost. Revenue split: $410,000 recurring service (quarterly/annual), $260,000 one-time and seasonal. Renewal rate data covers only 14 months — insufficient for cohort-resolved retention analysis. Monthly attrition estimated at 2.9% based on available data.
§ 02 · Outcome
What happened.
Initial ask 4.6× blended SDE. After owner-route normalization and license-continuity structure, buyer repriced to 3.7× adjusted SDE. Lender required license continuity documentation before credit. Closed at 3.7× with 90-day license transition plan.
§ 03 · Structural Pattern
How this deal fits the four-pillar framework.
Mid-band placement reflects owner-applicator concentration and license transfer requirement. The revenue co-mingling of one-time treatments with recurring route revenue was the primary earnings-quality issue requiring normalization before pricing.
This is an anonymized composite drawn from observable structural patterns in the sample window. It is not a specific deal. The structural pattern, band placement, and outcome reflect commonly observed combinations; a future consented case study will replace this entry.
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