The contractors generating the most buyer interest are not necessarily the ones with the highest revenue. They are the businesses with predictable earnings, quality backlog, transferable relationships, strong management, and less owner dependency.
When a distribution business owner starts thinking about a sale, the conversation usually begins with EBITDA.
A distribution business can generate $30 million in annual revenue and be worth considerably less than another distributor generating $20 million.
For many manufacturing owners, landing a major customer is a significant achievement.
Two manufacturing companies can each generate $3 million in EBITDA and still receive dramatically different offers from buyers.
Signing a Letter of Intent can feel like the hardest part of selling a business. In reality, it is the point where the transaction moves into a much more consequential phase: exclusivity, diligence, financing, documentation and closing.
Q3 2026 is not a market where every Northern California business is receiving the same valuation. The broader lower middle market is active, but buyers are increasingly selective about the quality of the companies they pursue.
Every HVAC owner who has spent years building routes, training technicians, winning service contracts, and answering emergency calls eventually asks the same question: what is this business actually worth?
MSP owners tend to enter a sale conversation with a stronger understanding of recurring revenue and operating metrics than many other business owners.
In earnout M&A, the structures most likely to pay the seller are based on revenue milestones, last 12 to 24 months, include precise accounting definitions, and allow the seller to retain meaningful operational control after closing.
