Regional Elevator Inspection and Maintenance Company

This article details a strategic acquisition structure for a regional elevator inspection, repair, and maintenance company servicing commercial buildings, hospitals, government agencies, and multi-story residential complexes. The company operates under strict state and municipal regulations requiring routine inspections, certifications, and preventive maintenance. Its technicians are licensed and authorized to perform third-party annual inspections, ensuring code compliance and public safety. The business is not involved in new elevator installations—rather, it focuses on legacy systems, modernization projects, and preventative upkeep.

With $4.3 million in annual revenue and $905,000 in adjusted EBITDA, the company services over 600 elevators across three states. Approximately 70% of revenue is recurring, tied to mandatory maintenance and inspection contracts, while 30% stems from repair jobs, modernization efforts, and emergency calls. The company employs union and non-union technicians depending on the market, all of whom carry active elevator mechanic licenses.

Given its regulatory moat, recurring contracts, and trained workforce, this business is well-positioned for SBA 7(a) acquisition financing. The buyer can expand via technician recruitment, contract roll-ups, compliance bundling, and acquisition of undercapitalized service firms that lack long-term maintenance infrastructure or internal compliance departments.

Proposed SBA 7(a) Deal Structure

Due to stable cash flow and license-driven revenue, the acquisition supports a conventional SBA structure:

• Purchase Price: $3.62 million (4.0x EBITDA)

• SBA Loan: $2.715 million (75%)

• Buyer Equity Injection: $362,000 (10%)

• Seller Financing (Subordinated): $543,000 (15%) amortized over 6 years with a 12-month interest-only period

Protective provisions:

1. 25% clawback on seller note if contract renewals fall below 85% in first 6 months

2. $50K performance bonus if buyer secures $500K in new inspections or maintenance contracts in year one

3. Seller agrees to remain available for license continuity and agency correspondence for 9 months post-close

Customer Segmentation and Revenue Streams

Client breakdown:

• Commercial office buildings: 32%

• Hospitals and healthcare campuses: 19%

• Municipal and county buildings: 17%

• Apartment complexes (5+ stories): 14%

• Universities and schools: 10%

• Hotels and casinos: 8%

Revenue streams:

• Recurring maintenance contracts: $2.95M

• Annual and semi-annual code inspections: $520K

• Emergency repairs (stuck elevators, sensor failures): $430K

• Modernization (motor, panel, cab refurb): $300K

• Compliance filings and re-certification reports: $100K

Maintenance contracts span 1 to 5 years and include monthly or quarterly inspections, lubrications, part replacements, and compliance testing. Many cities and states mandate documented inspections to remain in operation—creating high retention and renewal rates.

No single client accounts for more than 6.5% of revenue. The top 75 clients generate 64% of the business.

Technician Infrastructure and Licensing Model

Staffing:

• 7 licensed elevator mechanics (union and non-union split)

• 1 modernization specialist

• 2 code inspection managers (NICET certified)

• 1 compliance officer for municipal filings

• 2 dispatch/admin coordinators

• 1 operations manager (non-owner)

Each technician manages a set route of 80–100 elevators and services 3–6 buildings per day depending on issue severity. Techs are licensed by state boards and must meet continuing education and re-certification benchmarks.

Post-close strategy:

1. Introduce quarterly bonuses tied to route retention and zero-downtime metrics

2. Pay for new junior techs to achieve licensing over a 12–18 month pathway

3. Create technician-in-training route in underserved rural area

Facility, Fleet, and Tools

Facility:

• 6,300 sq ft leased operations hub

  • Tool and part inventory area

  • Certification log storage

  • Compliance documentation and filing systems

  • Fleet garage and maintenance bay

Lease: $5,200/month, 3 years remaining

Fleet:

• 6 service vehicles (2018–2023), branded and equipped with tools and parts

• FMV: ~$215,000

• All GPS-enabled and tied into dispatch software

CapEx outlook:

• Add one vehicle for rural expansion route: $38K

• Purchase mobile compliance reporting tablets: $9K

• Upgrade part inventory management system: $11K

Sales Channels and Expansion Strategy

Sales acquisition:

• Referrals from building managers, facility directors, and developers

• Participation in public RFP bids for inspection contracts

• Strong SEO for “elevator inspection + [region]”

• Long-standing relationships with elevator manufacturers and distributors

Marketing spend: ~$30,000 annually

Growth drivers:

1. Bid for additional municipal and school district inspections

2. Acquire small firms with 1–2 techs and no admin infrastructure

3. Launch modernization push for elevators over 20 years old

4. Build preventative maintenance education kits for building owners

5. Add water-rescue elevator protection retrofits for coastal and flood-prone zones

Financial Summary

• Revenue: $4.3M

• COGS (tech wages, parts, vehicle): $2.1M

• Gross Profit: $2.2M

• SG&A: $1.295M

• Adjusted EBITDA: $905K (21%)

Service line margins:

• Recurring maintenance: 55–60%

• Inspections: 70–75%

• Emergency repairs: 65%

• Modernization: 50–55%

• Compliance filings: 85%

Most contracts are prepaid monthly or quarterly. Public sector clients pay net-30 via PO. Code inspection fees are paid upon service unless bundled with maintenance. Emergency repair billing is hourly plus parts.

Legal, Compliance, and Licensing

• State elevator contractor license in three jurisdictions

• Technicians individually licensed and insured

• OSHA, ADA, and local code training every 6 months

• Fully insured: $2M GL, $1M auto, $1M workers comp, $1M umbrella

All inspections logged per AHJ (Authority Having Jurisdiction) requirements. Reports stored for 7+ years. No open OSHA or code compliance cases.

Working Capital and Transition Budget

• Payroll float: $110K–$125K

• Seller license and regulatory support: $35K

• Vehicle and inventory upgrades: $58K

• Technician training and licensing pipeline: $22K

• Sales and RFP submission enhancements: $15K

Ideal Buyer Profiles

• Route-based operators (HVAC, alarm, plumbing) with licensing transfer strategies

• PE-backed compliance services aggregators

• SBA-eligible buyers with background in mechanical services or municipal bidding

• Elevator OEM distributor looking for service downstream control

Post-Close Execution Plan

1. Deliver continuity notices to 100+ compliance contract holders

2. Host technician roundtables to reinforce retention and growth plan

3. Submit RFPs to 3 new school districts and 2 counties

4. Launch elevator modernization upsell with before/after analytics

5. Explore acquisition of nearby 2-tech firm servicing 80+ elevators

Conclusion

This elevator inspection and maintenance company offers a rare combination of regulatory lock-in, long-term service contracts, trained labor, and non-discretionary compliance demand. Its model is difficult to replicate due to licensing, safety regulations, and jurisdictional barriers. The business generates consistent cash flow, has low customer churn, and provides scalable upside through regional expansion and technician onboarding. For SBA 7(a) buyers or compliance-driven service roll-ups, this represents a stable, defendable, and highly strategic acquisition opportunity with infrastructure already in place for rapid scale.