Commercial Refrigeration Services Company
This acquisition opportunity focuses on a commercial refrigeration installation, service, and repair company that serves restaurants, grocery stores, medical labs, schools, and industrial cold storage facilities. The business operates in a two-state region across the Midwest and has built a reputation over 20 years as a reliable 24/7 emergency service provider. With trailing twelve-month revenue of $3.7 million and adjusted EBITDA of $680,000, the company offers preventive maintenance programs, new walk-in cooler/freezer installations, refrigeration retrofits, and emergency repairs.
The company employs 11 field technicians (all EPA-certified for refrigerant handling), 2 installation crew leads, 3 apprentices, and 3 office staff, including dispatch and invoicing support. The owner is semi-passive, involved in higher-level vendor and client negotiations but no longer runs service calls. Most work is driven through long-term commercial contracts and established vendor relationships.
Buyers looking for a defensible blue-collar service business with recurring contracts, technical licensing protections, and route density will find this opportunity attractive. However, the transaction must be carefully structured around technician retention, licensing transferability, and key account continuity to support SBA 7(a) financing and long-term performance.
SBA 7(a) Deal Structure Recommendation
A recommended structure for the SBA-financed acquisition could be:
Purchase Price: $2.6 million (3.82x EBITDA)
SBA Loan: $1,950,000 (75%)
Buyer Equity Injection: $260,000 (10%)
Seller Financing (Subordinated): $390,000 (15%) with technician continuity and key contract retention clawback provisions
This pricing reflects the premium typically paid for trades businesses with emergency service capability, recurring contract revenue, and licensing advantages that create competitive moats. Seller note provisions must offer performance-based reductions if technician turnover or contract losses exceed defined thresholds in the first 90–120 days post-close.
Technician Risk and Licensing Continuity
Refrigeration services are regulated under EPA Section 608, requiring certification for any technician handling refrigerants. The business maintains proper documentation for each technician’s license, and the buyer must verify that all licenses are current and not tied to the owner’s personal standing.
Because of licensing risk, the seller financing note should include an adjustment clause: if more than three licensed techs leave within 90 days, the buyer may reduce the note balance by 25%. This clause is a critical protection given the labor shortage in HVAC and refrigeration trades.
A pre-close plan should also include:
Employment Contracts: Secured agreements for top 5 techs and 2 lead installers, with retention bonuses of $3,000–$5,000 staggered at 6 and 12 months
Transition Bonuses: Paid if employees participate in onboarding or training of any replacements hired within 6 months post-close
Apprenticeship Pipeline Plan: Create or continue a trade school pipeline and mentorship program to build junior tech bench strength
Service Contract Structure and Revenue Predictability
Approximately 58% of annual revenue is tied to ongoing commercial maintenance contracts. These include 89 restaurants, 12 grocery chains (multi-location), 4 school districts, 2 food distribution warehouses, and 3 laboratories. Contracts generally include:
Quarterly or bi-annual system inspections
Emergency dispatch with service level guarantees
Parts discounts and prioritized scheduling
Contracts auto-renew annually and are terminable with 30–60 days notice, depending on the account. The buyer should audit each contract for:
Termination clauses and assignment provisions
Scope of covered equipment
Price escalation rights
Maintenance billing terms (monthly, quarterly, annually)
Buyers should also evaluate gross margin contribution per account to identify low-margin or high-disruption contracts that may be renegotiated or eliminated post-close.
Client concentration is moderate, with no single client accounting for more than 8% of revenue. The top 20 accounts represent 61% of recurring revenue. Buyers should prioritize transition meetings with these clients in the first 30 days post-close to affirm continuity of service and support.
Fleet, Equipment, and Facility Considerations
The company owns 14 service vans, all wrapped and GPS-tracked, with an average age of 4.6 years. Fleet maintenance is well-documented and included in COGS. Equipment includes:
Vacuum pumps
Refrigerant recovery units
Leak detectors
Recovery cylinders
Brazing kits
Manifold gauges
Tools are assigned per technician and verified quarterly. The buyer should request a full tool and asset register to be included in the asset purchase agreement.
The company operates out of a 6,000 square foot warehouse/office facility, with a front desk area, dispatch center, parts storage, and a small training room. Rent is $5,200/month NNN with 3 years remaining on the lease. The landlord is open to early renewal or building purchase. Buyers should verify zoning and environmental compliance for refrigerant and chemical storage.
Sales Process and Marketing System
Sales are currently inbound, with no dedicated outbound rep.
Lead flow is generated from:
Referrals (over 60% of new customers)
Google Ads and LSA (Local Services Ads)
Trade organization directories (e.g., restaurant and grocer associations)
Emergency call availability (Google My Business, local SEO)
The business ranks #1–#3 on Google for “commercial refrigeration repair” in its metro area. Website is built on WordPress, integrated with Housecall Pro for scheduling, invoicing, and technician dispatch.
Post-close marketing improvements include:
Hiring a Commercial Sales Rep: To build relationships with commercial kitchens, food service consultants, and general contractors
Launch of a Referral Program: Offer $500–$1,000 credit for successful business referrals or maintenance contract signups
Cross-Sell Campaigns: Target HVAC-only clients for refrigeration services and vice versa
Case Studies and Social Proof: Showcase walk-in cooler installations or emergency response saves to build credibility
Financial Systems and Working Capital Considerations
Accounting is maintained on accrual basis in QuickBooks, reviewed quarterly by an external CPA. All revenue is job-costed via Housecall Pro and classified by service type:
Emergency service (27%)
Preventive maintenance (34%)
Installations (21%)
Retrofits (8%)
Parts sales (10%)
Buyers should confirm that COGS includes labor, parts, consumables, and subcontracted services. Working capital needs at close will likely include:
Inventory restocking: $45,000–$65,000
Payroll buffer: $70,000 (2 weeks)
Equipment capex: $30,000 for van maintenance or new diagnostic tools
Marketing ramp-up: $10,000–$15,000
Legal and Insurance Compliance
Key diligence items include:
Verification of EPA licenses and refrigerant compliance logs
MSDS documentation for all chemicals and coolants
Certificate of insurance for $2M general liability, $1M auto, $1M umbrella, and workers comp
No OSHA violations, hazardous material claims, or EPA fines
Bonding capacity in place for government contracts (if applicable)
Any open warranties, major contractual obligations, or supplier relationships (e.g., OEM agreements) should be documented and assigned at closing.
Ideal Buyer Profiles
This business is ideal for:
Mechanical contractors expanding into refrigeration
HVAC entrepreneurs looking to vertically integrate
First-time buyers with access to licensed service managers
Trade service roll-up firms consolidating fragmented metro areas
Post-Close Execution Priorities
Within the first 100 days, the buyer should:
Meet with top 20 clients to affirm service and propose renewal options
Sign employment agreements with all senior technicians
Begin building a new tech training and apprenticeship pathway
Evaluate fleet health and replace vans due for retirement
Add a service sales rep and outbound quoting function
Conclusion
The commercial refrigeration services industry is resilient, high-margin, and relatively insulated from economic downturns due to the critical nature of its services. Businesses that combine emergency response, long-term maintenance contracts, and skilled labor are uniquely positioned to produce durable cash flow and equity growth for an operator willing to focus on technician management and route optimization.
If structured correctly with protections around licensing, technician retention, and contract stability this acquisition offers an excellent entry point into blue-collar cash flow backed by repeat customers, operational equipment, and skilled staff. With modest investment, the buyer can increase revenue via territory expansion, cross-sell, and technician productivity gains pushing EBITDA to $1M+ within 18–24 months and creating long-term enterprise value for eventual exit or hold.
