Know exactly what to verify before buying a jan-san distribution business — from customer concentration and supplier exclusivity to inventory quality and driver retention.
Find Janitorial Supply Distributor Acquisition TargetsAcquiring a janitorial supply distributor in the $1M–$5M revenue range requires scrutiny of recurring commercial accounts, supplier rebate structures, route-based logistics, and inventory health. Deals typically close at 3–5x EBITDA using SBA 7(a) financing with a working capital peg tied to 90-day trailing inventory and receivables.
Verify normalized EBITDA, customer revenue concentration, and gross margin by product category before advancing to LOI or deeper operational review.
Request 3 years of tax returns and P&Ls. Identify personal vehicle expenses, owner compensation above market, and non-recurring costs to produce a clean EBITDA schedule.
Obtain revenue by account for trailing 12 months. Flag any single account exceeding 20% of revenue and assess contract status, tenure, and renewal terms.
Segment margins across commodity consumables, private-label products, and equipment. Identify where margin compression from Grainger or Amazon Business is most acute.
Assess the transferability of supplier agreements, inventory quality, and operational infrastructure including delivery routes and warehouse management systems.
Review all distribution agreements for change-of-control clauses, exclusivity provisions, and rebate structures. Confirm top vendors will honor terms post-acquisition.
Conduct a physical count and calculate SKU-level turnover rates. Identify slow-moving or obsolete stock inflating working capital and negotiate exclusion or write-down at close.
Evaluate delivery route efficiency, vehicle fleet condition, and whether same-day or next-day delivery capabilities supporting customer retention are maintainable post-close.
Confirm key-person risk is manageable, verify legal and licensing compliance, and finalize working capital peg and deal structure before closing.
Determine if the owner manages primary account relationships. Assess whether a sales rep or operations manager can assume responsibility and negotiate seller transition and non-compete terms.
Confirm all business licenses, commercial leases, and fleet registrations are current and transferable under an asset purchase structure without landlord or agency re-approval delays.
Set working capital target using 90-day trailing inventory and receivables average. Consider a 10–20% earnout tied to 12-month post-close retention of top commercial accounts.
Expect 3–5x EBITDA. Businesses with diversified accounts, exclusive supplier agreements, and gross margins above 28% command the higher end. Heavy customer concentration or owner-dependent sales compress multiples.
Yes. Most deals in the $1M–$5M revenue range are SBA 7(a) eligible. A typical structure includes 10–15% buyer equity, an SBA loan, and a 5–10% seller note held for two years post-close.
Request copies of all distribution agreements and look for change-of-control clauses. Contact top vendors directly during due diligence to confirm willingness to assign agreements and maintain rebate tiers.
Customer concentration tied to the owner's personal relationships is the most common value destroyer. Verify that at least two staff members hold active relationships with top accounts before closing.
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