Deal Review Acquisition of a Custom Uniform Manufacturer
Asking Price: $3,750,000
Annual Revenue: $5,980,000
Annual EBITDA: $820,000
Location: Southern U.S.
Business Model: B2B Apparel Manufacturing
Customer Base: Government contracts, private schools, hospitality groups, security firms
Deal Type: Asset Purchase
Executive Summary
This transaction centers on the acquisition of a 40-year-old custom uniform manufacturing business with extensive roots in both the private and public sectors. The company designs, manufactures, and distributes uniforms for four core verticals: public safety, private education, hospitality, and facilities management. With strong EBITDA margins, minimal customer churn, and a clear path to scale through federal contracting and e-commerce, this business presents as a stable, cash-flowing investment with multiple operational levers for expansion.
At a $3.75M asking price and $820,000 in EBITDA, the business is priced at a 4.57x multiple. However, over $900,000 of saleable inventory and equipment is included in the sale. The owner is exiting to retire and has agreed to stay on for up to 18 months as a paid advisor. The transaction structure includes an SBA 7(a) loan, a 10% equity injection, and a 10% performance-based seller note payable contingent upon retention of top three contracts.
The business operates out of a 20,000 sq ft facility with production, warehousing, and showrooms under one roof. Labor and sourcing are managed locally, with subcontracting options utilized only for overflow or specialty runs. With robust vendor relationships and a proprietary digital design library, the company delivers both made-to-order and catalog-based products under long-standing MSA terms.
Deal Terms and Structure
Total Price: $3,750,000
EBITDA: $820,000
Deal Type: Asset Purchase
Included Assets:
Inventory: ~$550,000 (finished goods + raw materials)
Equipment: ~$350,000 (cutting tables, embroidery, sewing lines)
Customer Database (15,000+ entities)
Digital design library (CAD-based pattern files, logo IP, embroidery software)
Warehouse lease with favorable terms ($0.45/sq ft)
Financing Stack:
80% SBA 7(a) senior debt
10% Buyer equity
10% Seller Note (subordinated, paid only if 3 largest clients renew within 12 months)
Seller Involvement: Up to 18 months via consulting agreement ($5,000/month retainer)
Transition Services: Client introductions, vendor transition, training on design platform, quoting system, and lead time planning
Business Model and Product Offering
The company operates under a dual-stream business model:
Custom-Made Uniforms:
Designed to spec based on client requirements, typically for government entities (fire departments, school security, maintenance crews). Includes sizing services, logo embroidery, and specialty materials (fire-retardant, moisture-wicking).Catalog Products:
Pre-developed uniform sets available in standard sizes and colors. These are typically used by private schools, hotels, janitorial services, and facility maintenance groups. Quick reorder, bulk discount tiers, and seasonal demand drive consistent revenue.
Service Differentiators:
3-week turnaround standard, faster than industry average
Local manufacturing = supply chain control
Embedded order history per client
Logo management and brand standard compliance
Employee sizing templates and online reordering
Product Examples:
Button-down shirts with embroidered patches
Security and fire uniforms (ANSI compliant)
Hospitality jackets, aprons, chefwear
Polo shirts and khakis for school uniforms
Branded COVID-era PPE (low residual demand but still offered)
Customer Base and Contract Terms
The business services approximately 180 recurring B2B customers, of which 70% reorder at least once per quarter. Most operate under purchase agreements or purchase order–based terms. The top 10 clients generate 55% of revenue.
Client Segments:
Public School Systems (26%)
Government Facility Departments (20%)
Hotel Chains (18%)
Janitorial/Property Management (14%)
Security Services (13%)
Other/Miscellaneous (9%)
Notably, 3 contracts 2 with state agencies and 1 with a private school network renewed within the last 6 months, extending terms through 2026 with automatic renewals. These contracts account for 35% of trailing revenue and are subject to standard performance and delivery SLAs.
Financial Overview
Trailing Twelve-Month Financials:
Revenue: $5,980,000
COGS: $3,310,000
Gross Profit: $2,670,000
Operating Expenses: $1,850,000
EBITDA: $820,000
EBITDA Margin: 13.7%
Expense Drivers:
Labor: $1,020,000 (26 employees; cutters, sewers, floor manager, admin)
Rent: $108,000/year
Materials: $1.6M/year (fabrics, patches, hardware)
Shipping & Fulfillment: $180,000
Marketing & Sales: $52,000 (primarily trade shows, catalog print, website SEO)
Financials have been reviewed by an independent CPA firm and are SBA-ready. Inventory accounting is FIFO; all inventory is clean and current (no write-offs or aged SKUs). The company carries no debt and minimal AP.
Operational Infrastructure
The facility includes:
Cutting and Sewing Floor: 12 sewing machines, 3 automated cutters, layout tables, pattern archives
Embroidery Center: 3-head embroidery machine, 1 laser cutter, 1 heat press
Quality Control Station: Inspection, measurement, final packaging
Inventory Storage: 3,000 sq ft with rack and bin system, barcode-scanned
Front Office: Design room, quoting, invoicing, CRM access
Personnel:
2 Floor Supervisors (production + embroidery)
1 Office Manager (client service + PO management)
2 Designers (CAD + layout, logo prep)
1 Warehouse Manager
2 Drivers (local delivery)
15 Sewing/Cutting Staff
2 Customer Service Representatives
Owner oversees pricing, sourcing, and strategic bids
The business uses StitchLabs for inventory and Shopify for custom quote-to-order flows (not a storefront; used for internal templates). QuickBooks Enterprise is used for accounting.
This transaction involves the acquisition of a well-established, vertically integrated custom uniform manufacturer with over four decades of operational history. Headquartered in the southern United States, the business specializes in design, manufacturing, and distribution of high-performance uniforms tailored to niche customer segments including government agencies, private schools, hospitality groups, and private security firms. What distinguishes this business is its ability to produce both standardized catalog inventory and bespoke orders with rapid turnaround times using an in-house production team, modern equipment, and a comprehensive digital asset library.
At a purchase price of $3.75 million and annual EBITDA of $820,000, the transaction reflects a 4.57x multiple well within acceptable range considering the value of included assets, strategic customer relationships, and embedded operational redundancies. The deal includes approximately $900,000 in tangible assets including finished goods inventory, raw materials, and capital equipment, along with a proprietary digital design library that contains over 8,000 client-specific patterns, embroidery files, and product templates. In addition to the asset value, the buyer will inherit a reliable labor force, embedded vendor relationships, and a facility optimized for low-waste, batch-based production. The seller is seeking retirement but has agreed to remain as a paid consultant for up to 18 months at a fixed monthly rate to assist with client introductions, vendor transitions, production system training, and new business quoting.
The business operates from a leased 20,000 square foot facility that houses all core operations: cutting, sewing, embroidery, quality control, warehousing, and administration. This layout provides full visibility across the production lifecycle, reduces transportation inefficiencies, and allows for high levels of quality assurance, even during peak order cycles. The current lease agreement is favorable below market rate at $0.45 per square foot on a 5-year renewal cycle with landlord willing to assign or renegotiate lease with the buyer under similar terms.
Client relationships are long-standing and dependable. The top ten accounts contribute approximately 55% of annual revenue. Three cornerstone contracts two with state-level facilities management departments and one with a regional private school network account for roughly 35% of the company’s gross receipts. These contracts have recently renewed with multi-year terms and include auto-renewal provisions. The seller’s deep knowledge of procurement channels and historical success in winning RFPs for uniform supply ensures continuity, and during transition, the seller has agreed to conduct full introductions to each contract’s purchasing officer or committee, complete with past performance documentation and workflow maps.
Product offerings include both catalog and custom solutions. Catalog SKUs include standard sizing across various garment types (e.g., pants, polos, button-down shirts, outerwear) with brand-compliant logo placement and color palettes. These items are ordered repeatedly by hotels, janitorial firms, and private schools. Custom products, which represent 60% of revenue, are quoted based on fabric type, use case (e.g., fire retardant, high-visibility), employee size profiles, required embroidery or insignia, and order volume. The company’s digital design library automates many steps of this process by generating pricing and lead time estimates from past quotes and archived production templates. Turnaround time on custom orders averages three weeks, with expedited delivery available at a premium.
Staff includes 26 full-time employees, 15 of whom are directly involved in production. A floor manager supervises day-to-day manufacturing, while a second supervisor oversees embroidery and heat-transfer operations. Two in-house CAD designers handle all digital rendering, logo placement, and embroidery files. An office manager oversees purchasing, client communication, order entry, and customer service. Additionally, two local delivery drivers handle outbound logistics within a 50-mile radius, reducing UPS/FedEx costs and enabling just-in-time delivery for high-volume clients. Employee tenure is strong average time on payroll is 6.3 years and the seller has committed to providing employment agreements for three key staff prior to close to mitigate transition risk.
Financially, the company is solid. Revenue for the trailing twelve months was just under $6 million, with gross profit of $2.67 million and EBITDA of $820,000, equating to a margin of 13.7%. Cost of goods sold includes both materials and direct labor. Materials are sourced from five U.S.-based vendors, none of which account for more than 35% of total purchases. Price volatility is low due to fixed-volume discounts, and the company is generally able to pass through cost increases to its B2B customers. Labor is competitive in the region, and the business benefits from low employee turnover. Equipment is owned outright and maintained in good condition, with recent upgrades to embroidery heads, cutters, and heat-transfer units totaling over $110,000 in the last two years.
The technology stack is lean but effective. The company uses StitchLabs to manage inventory, Shopify’s backend for quote-to-order flow (private access only), and QuickBooks Enterprise for accounting. All production orders are barcoded and tracked internally. Workflow documents are maintained in Google Workspace, and each client has a digital job jacket containing past orders, embroidery templates, pricing history, and sizing guides. New staff are trained using a 14-day onboarding curriculum, and SOPs exist for each department including maintenance, production flow, QA, order entry, and customer service.
One of the key financial levers in this transaction is the use of deferred seller compensation. The seller has agreed to a 10% note approximately $375,000 payable only upon successful retention of the three cornerstone contracts within 12 months of closing. The note is subordinated to senior debt and will be structured as interest-only for the first year, with a balloon payment thereafter. This mitigates buyer risk and incentivizes the seller to remain engaged during the transition window.
The buyer will finance the acquisition primarily through an SBA 7(a) loan, with an 80% LTV based on EBITDA and asset value. Down payment of 10% will be required, and the remaining 10% will be covered via the aforementioned performance-based seller note. The business is SBA pre-approved through a preferred lender, and a third-party valuation has already been completed to support underwriting.
Growth opportunities are significant. First, the company does not currently participate in federal procurement despite being eligible through existing NAICS codes and product history. A SAM.gov profile and GSA bid qualification process would position the business for larger contracts in military base operations, VA hospitals, and federal prisons each of which utilizes standardized uniforms with predictable order volume. Second, the current e-commerce strategy is non-existent. While Shopify is used for internal order management, no front-facing storefront is available. A basic e-commerce launch could capture reorders from smaller customers, enable direct-to-consumer sales, and reduce client service workload. Third, the business does not upsell branded accessories (e.g., name tags, hats, gloves, bags), even though its client base purchases these items from third-party vendors. Adding a basic promotional products catalog with minimal inventory risk could increase average order value by 10–15%.
Additionally, the seller has outlined an untapped channel in private security and EMT contracting. These customers are underserved in the region and often procure from larger catalog firms with high MOQs (minimum order quantities) and poor fit options. The company’s ability to size employees individually and deliver in small batches is a competitive advantage. Entering this market with targeted outreach and trade show participation could yield six-figure revenue within 18 months.
Potential risks include customer concentration (with 35% tied to three clients), labor disruption (especially in a tight hiring market), and increasing competition from overseas manufacturers, particularly for basic garment types. However, most customers value domestic production and rapid delivery over price and are unwilling to risk foreign sourcing, especially when custom embroidery or agency branding is involved.
Ideal buyers include strategic apparel companies, contract manufacturers, B2B uniform suppliers, or independent operators with experience in textile operations or logistics-heavy service businesses. A PE buyer with a consolidation strategy in light manufacturing or uniform supply would find strong synergies here, especially given the seller’s willingness to assist with bolt-on integrations and M&A targeting.
From a valuation perspective, the multiple is justified by the stability of cash flow, quality of assets, and proven customer retention. Inventory is clean, with low obsolescence and consistent turn ratios. The facility is optimized for production efficiency, and staff are cross-trained across functions. The presence of a digital design library and structured SOPs means operational knowledge is transferable, and the transition risk is mitigated through retained seller involvement.
To summarize, this custom uniform manufacturer offers an ideal blend of recurring B2B revenue, capital-efficient production, embedded IP, and operational self-sufficiency. With strong systems, excellent client relationships, and multiple growth pathways, the business is well-suited for a buyer seeking a stable, cash-flowing acquisition with low technology risk, physical asset backing, and strong upside through contract expansion, digital sales, and vertical integration.
