The news is everywhere. You can’t avoid it. Every month, dozens of your fellow restorers are “selling out.” No, really. Restoration companies are a hot commodity, and eager buyers are on the prowl right now, looking to purchase willing sellers. Why is this happening? Do you want this to happen to you? And if so, what can you do to make yourself more attractive?
Before we get too far down the “extreme makeover” road, let’s stop for a second and look at the history of consolidation and outside financial interest in our industry. I entered the restoration world in 2009 after a 25-year career on Wall Street. I left the crazy world of trading and investing to start a consulting company for small businesses, and my first clients were independent restorers. After only a short time, I wondered why my Wall Street peers were not interested in this marketplace. As it turns out, they were. Even back in the early 2000s, investors were placing bets in our space. Cotton Companies was a major player in the commercial fire and water damage space, with revenue exceeding $80 million in 2005. The next year, Charys Holdings, an Atlanta-based investment firm, bought Cotton. For those who do not know, Belfor was a German conglomerate that built its American footprint by purchasing successful independent restoration companies in major cities throughout the 2000s, eventually folding them into a single operating entity, and growing into the $2 billion behemoth they are today.