Closed transaction · March 2020

Corrosion Eliminators

MDR & Associates took Corrosion Eliminators, a tank coating specialist, through to closing in March 2020.

Corrosion Eliminators logo

The transaction

  • ClosedMarch 2020
  • SectorBusiness & consumer services
  • LocationMineral Wells, Texas
  • BuyerFinancial buyer
  • Engagement to closing180 days
  • Represented byMDR & Associates

The sale

How it ran

Corrosion Eliminators, a tank coating specialist in Mineral Wells, came to us 180 days before it closed in March 2020. It was sold to a financial buyer, found through the same confidential process every company we represent goes through: a blind profile, buyers qualified before they learn the name, and more than one at the table where the company draws them.

What that buyer examined is what any buyer of service businesses examines — the factors below, in that order.

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What decided the price

What buyers look at in a service business

Recurring and contracted revenue

The strongest single driver. Revenue under contract, on a schedule, or under a maintenance agreement is worth a multiple of the same revenue sold ad hoc.

Owner dependence

If customers buy because of you, the buyer is not buying a business. Reducing this is the highest-return work available before a sale.

Customer retention and length

Churn and average tenure tell a buyer what they are really acquiring. Have the numbers ready before they ask.

The full list, and who the buyers are: Selling a service business in Texas.

Your company

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