A Private Equity Buyer Will Probably Call You This Year: Here's What They Check Before Making an Offer
- Essential services, HVAC, mechanical, refrigeration, plumbing, sit at the heart of a consolidation wave: recurring revenue, demand that cannot be offshored, a fragmented market. Buyers are calling companies that were not for sale.
- Before pricing an offer, a buyer evaluates four dimensions: the real quality of cash flows, how solid operations are without the owner, the durability of growth, and the depth of the team.
- The balance of power is not decided during the negotiation. It is decided before the call, depending on whether you already know your answers or the buyer discovers them before you do.
- Knowing your position on these four dimensions does not require being a seller. It is useful whether you sell or not.
Because your sector checks every one of their boxes. Recurring service revenue nobody can offshore. Demand carried by buildings that already exist and regulatory transitions that force investment. And above all, a market fragmented into thousands of independent companies, which enables the strategy they prefer: buying several regional businesses and combining them, each acquisition making the next more profitable.
The practical consequence concerns you directly: buyers no longer wait for companies to list themselves for sale. They call. And they often call at the moment the owner is tired, which is not a coincidence: it is the moment the balance of power favours them most.
Cash first, but not the cash of your financial statements: the real quality of earnings. What share of revenue is recurring and contractual rather than one-off. How profit converts into actual money. What remains once non-repeatable items are removed.
Operations next: does work flow through systems or through the memory of a few people. A buyer measures the difference between a business and a group of talented people, because they are buying the first and not the second.
Growth: where new revenue comes from, how much of it depends on one or two clients, and whether recent growth is a trajectory or a good year.
Team, finally, and it is often the dimension that decides the price: who stays if you leave, who decides when you are not there, and how much critical knowledge lives in a single head.
The offer does not necessarily disappear. It changes shape, and not in your favour. The price drops, because the buyer is buying a risk. Or the price moves through time: a portion conditional on your presence for years, which amounts to selling your business and buying back your job. Owner dependency does not kill the deal; it transfers value from your side of the table to theirs.
Preparing to sell is a project, with an intention and a timeline. Knowing where you stand is a position, useful in every scenario: if you sell one day, if you decline an offer with full knowledge, if you simply want the business to be worth more in five years. This is where our position diverges from the brokers': a broker helps once you have decided to sell, and their interest is that the transaction closes. The Sentinelle Mandate takes the same look a buyer would take, across the same four dimensions, but it sells nothing other than lucidity: the diagnostic belongs to you, whether you sell or not.
For the owner of an established essential-services business of one to twenty million in revenue, who has received a call, or knows one is coming. Less so for the startup, which buyers of this type do not yet look at.
What does a private equity buyer check before making an offer?
Four dimensions: the real quality of cash flows (recurrence, cash conversion), how solid operations are without the owner, the durability of growth and client concentration, and the depth of the team. Owner dependency is the factor that moves the price the most.
Should I respond to a buyer who calls if I don't want to sell?
Nothing obliges you to, but the call is free information: it tells you your sector and your profile attract interest. The best position is to know your four dimensions before calling back, so the conversation happens on your numbers, not theirs.
How much does a Mirabilys diagnostic cost?
The fee is fixed and non-negotiable. That is not rigidity, it is how we protect the integrity of the work and the equality of every client relationship.
Need a structured outside read?
A 30-minute discovery call lets us evaluate whether your situation fits the Sentinel Mandate methodology.