HAVE WE PEAKED?

The global disaster restoration services market is expected to reach a valuation of $41.2 billion in 2023. During the forecasted period (2023-2033), worldwide demand for disaster restoration services is expected to increase significantly and reach a market size of $80.1 billion by the end of 2033. The image below depicts estimated total market value of disaster restoration services in 2023 ($41.2 billion). It also represents market split by type; water damage restoration services are expected to account for a market share of 41%.?

As the industry continues to explode in projected size, it’s no surprise that private equity and larger privately held restoration companies are consolidating through mergers and acquisitions - enhancing their footprint and capitalizing on a larger customer base. In fact, during the last 5 years, the market has become more fragmented than ever - with the presence of various market players offering disaster restoration services.?

Many would argue that the future of the disaster restoration market (North America) is in great shape, and we have not yet reached our peak of consolidation through mergers and acquisitions. I would argue that the runway for selling your disaster restoration business (at a peak price) is shorter than most think!?

North America has yet to feel a harsh crackdown by insurance companies as to what can be charged on disaster restoration projects. 50-75% profit margins can raise an eyebrow or two and once the ball gets rolling, I’m confident we will see profit margins reduced to reflect “acceptable” margins by the ones footing the bill - insurance companies. When this happens, selling your business at peak value will become more challenging.?

So, have we peaked? No, I don’t believe we have peaked (yet) – but I believe you should certainly consider selling your business within the next 2-4 years if you are trying to time the market (for peak purchase price).?The next wave of private equity groups will be entering the market soon (second bite of the apple... In some cases a third) to purchase existing disaster restoration portfolios. When this happens, the clock will begin, and I anticipate those that do not sell in the next 2-4 years - will see a significant devaluation in their business sale price.

Selling your disaster restoration company is not something you decide to do overnight. It's a lengthy process and one that takes strategy and impeccable planning. If you're considering exiting and wish to learn more about selling at the peak - call Pinnacle Exit Solutions today to learn more on how to get started!