If you own an industrial services or specialty maintenance business doing $20 million or more in revenue, there is a reasonable chance you have already had the call. A platform’s corporate development lead, or a private equity firm’s associate, reaches out, says accurate things about your reputation, and eventually gets to a number. The number is a multiple of trailing EBITDA, and the multiple is described as “market.”
That offer is real capital from a real buyer. However, it is also, in our experience, an offer that prices the business the buyer hopes you are rather than the business you have actually built. When DGP ran a competitive process for Highland Commercial Roofing, a commercial roofing contractor serving industrial and commercial customers, the winning bid came in roughly 50% above the unsolicited offers the owners had received beforehand. At The PK Companies, DC Capital Partners invested at a valuation substantially above the unsolicited interest that preceded the process. Those gaps came from buyers being shown what they were actually buying.
What Buyers Are Underwriting in 2026
GF Data, which tracks sponsor-backed transactions between $10 million and $500 million of enterprise value, put the average multiple at 7.2x EBITDA for full-year 2025 and 7.3x for the first quarter of 2026, essentially flat across eighteen months. PitchBook counted roughly 5,100 U.S. private equity transactions in the first quarter worth about $482 billion, a step down from an unusually strong back half of 2025 but well ahead of the stagnant years before it, with about $2 trillion of dry powder still to be deployed. Within industrials specifically, PwC’s midyear read is that strategics are winning the large deals while sponsors concentrate on mid-market buy-and-build platforms.
Those platforms are not generalists. Acuren, the Houston-area inspection and integrity provider, combined with NV5 into a roughly $2 billion revenue inspection and engineering platform and has kept adding regional operators, among them Baton Rouge-based Premium Inspection & Testing and its 500 employees. MISTRAS Group, at roughly $740 million in trailing revenue, has made a string of inspection and technical services acquisitions of its own. In passive fire protection, Catchment Capital agreed in April to acquire Isolatek from SK Capital, citing demand from data centers, battery plants, and semiconductor fabs. In inspection technology, Hexagon agreed to pay about $1.45 billion for Waygate Technologies and said plainly that the appeal was recurring, regulation-driven integrity testing rather than revenue tied to capital cycles.
Among those announcements, one word keeps appearing: recurring. The platforms are paying for demand that is mandated by code, permit, insurer, or integrity program, and that comes back whether or not the plant’s capital budget does. An owner who sells capacity by the project is priced like a contractor. An owner who sells compliance and uptime is priced like a services business, and the distance between those two prices is where most of the value in a transaction lives.
The Five Things That Move the Number
Across DGP’s engineering and technical services transactions, a few attributes consistently drove buyer interest.
- Non-cyclical, regulatory-driven demand. The first question a serious buyer asks is not “how much revenue” but “how much of that revenue has to happen.” API 510, 570, and 653 inspection intervals, OSHA process safety management requirements, insurer-mandated fireproofing, and asset-integrity programs written into an operating permit all generate work that is scheduled by regulation rather than by a customer’s appetite. When DC Capital described PK at closing, the phrase it used was “non-discretionary, regulatory driven.” A business where the majority of revenue is mandated is worth materially more than a business where the majority of revenue is a good year for capex, even at identical EBITDA.
- Repeat customers with visible backlog. Buyers underwrite next year, not last year. A master service agreement with a refinery or chemical complex, an evergreen turnaround relationship, and a top-ten customer list where the same names recur year after year convert your revenue from something the buyer has to resell into something they can count. Concentration cuts the other way. If your three largest plant owners represent more than 40% of revenue, expect the buyer to ask for an earnout or a lower price, and often both. Repeat customers with significant backlog was a highlighted attribute in DGP’s Highland and Veris processes for exactly this reason.
- A management team that runs the business without you, and wants to stay. In every DGP technical services transaction, the attribute buyers weighted most heavily after revenue quality was a long-tenured management team incentivized to grow. Founders in this sector often carry the key customer relationships and estimating judgment, and to a buyer that reads as an asset that walks out the door at closing. A second tier of leaders with real P&L responsibility, tenure measured in years, and equity or retention economics already in place removes that discount. It also answers the question most owners in this industry care about more than the headline price: what happens to my people.
- A certified workforce you cannot hire fast enough. API-certified inspectors, ASNT Level II and III technicians, AMPP-certified coatings inspectors, NCCER-credentialed craft. Platforms in this space are constrained by credentialed labor, not by demand, and a buyer looking at your business is looking at your bench. The revenue is what the bench produces. Document certifications, turnover, and average tenure by classification before a process starts, because the buyer will ask for it.
- A tech-enabled or proprietary edge. This is the difference between a services business and a labor business in a buyer’s model. PK’s inspection technology, which gives plant owners real-time visibility into asset integrity and on-site safety compliance, was the attribute DC Capital singled out as making the revenue model “highly sustainable” rather than merely repeatable. Drone and robotic inspection, digital reporting that a client’s engineers come to rely on, proprietary application methods: any of these makes the relationship stickier and the margin more defensible, and buyers pay for both.
Same EBITDA, Very Different Number
PK is the cleanest illustration we have. Founded in 2004 and headquartered in Wichita and the Woodlands, with operations in Texas, Louisiana, and Mississippi, PK offers coatings, fireproofing, tech-enabled inspection, and soft-craft services to energy, petrochemical, manufacturing, and food and beverage customers. It was family-owned, growing quickly, and had already fielded unsolicited interest.
Seen through an unsolicited-offer lens, PK was a regional industrial contractor with strong growth and a good safety record. Seen through the five drivers above, it was something else: a regulatory-driven, recurring-revenue business with proprietary inspection technology, a diversified blue-chip customer base, and a management team that wanted to keep building. DGP marketed a majority recapitalization to a select group of financial and strategic acquirers focused on industrial services. DC Capital Partners, a sponsor that invests in middle-market government and engineering companies, made a control investment at a valuation above the founders’ expectations, and the founders rolled meaningful equity into the next chapter.
For your consideration:
- What share of your revenue is mandated by code, permit, insurer, or integrity program rather than by a customer’s discretionary budget?
- How much of next year’s revenue is already under MSA or in committed backlog?
- What share of revenue sits with your three largest plant owners or general contractors?
- Who runs the business if you take ninety days off, and do they have a reason to stay after a sale?
- How many certified inspectors, applicators, or technicians do you have below the ownership level, and what is their average tenure?
- Is there anything in how you deliver the work that a competitor with the same people could not replicate?
Most owners can answer three or four of these well. The remaining ones are usually where the gap between the unsolicited offer and the competitive-process number lives.
If an Offer Is Already on the Table
An unsolicited offer is information, not a decision. What it tells you is that at least one buyer has built a thesis that includes businesses like yours. It does not tell you what a broader set of buyers would pay once they understand the mandated share of your revenue, depth of your bench, and stickiness of your technology. The only way to learn that is to put the business in front of them.
Preparation is where the twelve to eighteen months before a process are well spent. Reporting quality, converting handshake relationships into MSAs, documenting certifications and turnover, and putting retention economics in place for your second tier are all fixable inside that window.
The question worth asking is not “is this a good offer.” It is “is this offer pricing the business I actually built.” Those are different questions, and only the second one is something you can do anything about.
If you would like a realistic view of what a competitive process would produce for your business, let’s have a conversation. Contact us here.