Acquidex · Industry Atlas · Tokyo · New York
Restoration Acquisitions · Q2 2026 · Issue 01
AQX-IR-RST-2026Q2
2026 Multiples Band, Structural Conditions, and the Underwriting Lens
US small-business water, fire, and mold restoration acquisitions traded in a 2.5×–4.5× SDE band over the trailing twelve months. Accrual vs. cash DSCR timing gaps, TPA program transferability, and supplement revenue inflation are the structural conditions determining band placement in Q2 2026.
BY AVERY HASTINGS · CPA · FOUNDER, ACQUIDEX
Sample 2025-05 → 2026-04·n=—·Quarterly·Published 2026-05-02·Next 2026-08-15·Acquidex v1.0 §3.4
PILLAR 01
Earnings Quality
61%
↑ ↑ vs Q1of deals recognized revenue before insurance settlement, creating AR timing gaps. Cash SDE can be 20–35% lower than accrual SDE in the trailing period.
PILLAR 02
Pricing
2.5×–4.5×
→ → Band heldBand stable. TPA program status (Alacrity, Contractor Connection, SteadyState) held by entity vs. owner is the top-of-band differentiator.
PILLAR 03
Fundability
#1
↑ ↑ vs Q1SBA fall-through cause: AR timing adjustment under lender cash-basis underwriting reduces DSCR below 1.25× in majority of accrual-basis deals.
PILLAR 04
Transferability
43%
↑ ↑ vs Q1of deals had TPA program registrations in the owner's personal name, not the entity. Non-transferable — requires re-application after close.
Executive summary
Four findings shaping Q2 2026 restoration deal flow.
Principal finding
Revenue was recognized before insurance settlement in 61% of deals, creating AR timing gaps that SBA lenders cannot bridge. Restoration businesses using accrual-basis accounting will show SDE that is 20–35% higher than cash-basis SDE in active trailing periods. Lenders underwrite to cash-basis SDE — the adjustment is not optional and is the primary source of DSCR failure at commitment in this vertical.
Further findings
- 02
Finding 02
TPA (Third-Party Administrator) program registrations — Alacrity, Contractor Connection, SteadyState, and similar preferred vendor programs — were held in the owner's personal name rather than the entity in 43% of deals. TPA programs are revenue-generating, but they are non-transferable when registered to an individual. Post-close, the new owner must re-apply from scratch, with no guarantee of reinstatement and a typical re-approval timeline of 60–180 days during which the TPA revenue channel is interrupted.
- 03
Finding 03
Supplement revenue — the additional charges submitted to carriers after initial estimate acceptance, covering scope changes, materials price adjustments, and labor additions — was presented at peak-negotiation levels in 34% of deals. Supplement revenue is a function of estimator skill, carrier relationship management, and current carrier appetite for supplement acceptance, which compresses as claim volume increases. Normalizing supplement revenue to a 3-year average reduced presented SDE by 8–18% in these deals.
- 04
Finding 04
IICRC certification gaps — restoration technicians without current Water Damage Restoration Technician (WRT), Applied Structural Drying (ASD), or Fire and Smoke Restoration Technician (FSRT) credentials — appeared in 41% of deals. TPA programs require IICRC certification for approved vendor status in most networks. Certification gaps are both a TPA risk and a technical quality risk, and they create post-close exposure when carrier audits of preferred vendor qualifications occur.
The Acquidex Read
Q2 2026 · AQX Evaluation
AQX Evaluation Layer · Section 07 · Bands & Structural Conditions
The Q2 2026 numbers, with the conditions that move them.
| Metric | Band | Structural condition |
|---|---|---|
| SDE multiple paid | 2.5× – 4.5×1 | Upper band requires TPA programs in entity name, cash-basis DSCR verified, IICRC-certified staff |
| AR days outstanding | 45 – 120 days | Above 90 days signals carrier payment delays or contested claims; impacts cash-basis SDE calculation |
| TPA revenue % of gross | 20% – 45% | TPA revenue verified as entity-registered (not personal); above 35% requires TPA agreement review before LOI |
| Supplement revenue % of gross | 8% – 22% | Normalize to 3-year average; peak-negotiation supplement rates are not forward-durable |
| IICRC-certified staff % | 60% – 100% | WRT, ASD, FSRT certifications required for TPA approved vendor status; below 70% creates TPA renewal risk |
| Franchise royalty % (if applicable) | 6% – 12% | Franchise royalties reduce SDE; brand/TPA access and training may justify the cost — verify net benefit |
| Sources · BizBuySell closed-deal data, IBBA Market Pulse Q3–Q4 2025 and Q1 2026 surveys, Pratt's Stats SMB transaction database, Acquidex direct deal observations (buyer, lender, broker engagements during sample window) | ||
AQX Evaluation Layer · Section 08 · Four-Pillar Underwriting Lens
What moves a deal from the middle of the band to the edges.
The four-pillar lens — Earnings Quality, Pricing, Fundability, Transferability — surfaces the structural conditions most frequently observed in restoration business acquisitions. Each is described in operational terms in the Underwriting Playbook.
| Pillar | ↑ Top-of-band condition | ↓ Bottom-of-band condition |
|---|---|---|
| Earnings Quality | Cash-basis SDE verified; AR normalized under 75 days; accrual-to-cash adjustment calculated and disclosed before LOI | Accrual SDE presented without cash-basis adjustment; AR days above 90; supplement revenue at peak not normalized |
| Pricing | TPA programs in entity name; IICRC certifications current; supplement normalized to 3-year average; franchise structure priced correctly | TPA programs personal to owner; IICRC certification gaps; supplement at peak year; franchise royalty not deducted from SDE |
| Fundability | Cash-basis DSCR holds at 1.25×+; AR days normalized; TPA re-application risk quantified in lender model | DSCR fails under cash-basis accrual adjustment; AR timing creates DSCR trough; TPA gap creates forward revenue uncertainty |
| Transferability | TPA registrations in entity name; IICRC certifications transferable (not individual-only); estimator bench documented | TPA programs in owner personal name; IICRC certs individual-only; sole estimator/relationship manager is the owner |
AQX Evaluation Layer · Section 09 · Cross-Border Lens · US / Japan
Cross-Border Lens · US / Japan
Water, fire, and mold restoration as an insurance-driven recurring trade service exists in Japan but operates under a fundamentally different insurance structure. Japan's non-life insurance market (損害保険) handles property claims through direct carrier settlement rather than preferred vendor TPA networks, reducing the structural significance of TPA program access. Japanese restoration companies (水害復旧・修復工事) tend to be subsidiaries of larger construction firms. SMB standalone restoration acquisitions are rare at the scale tracked here. Cross-border comparison data is not available at current sample size.
Byline · Provenance
Avery Hastings, CPA · Founder, Acquidex
SMB acquisitions in the US and Japan. Methodology development and research direction. Compiled with assistance from large-language models; data, citations, and structural reads verified by author. External pressure-test reviewers will be named at the publication of the Acquidex v1.0 methodology paper.
Methodology · Acquidex v1.0
§3.4 (Earnings Quality), §3.3 (Transferability), §5.1 (Add-Back Stripping per SBA SOP 50 10 8)
Sample window
Sources
SDE definition
Band construction
Limitations
This report is published by Acquidex for informational purposes and does not constitute investment, legal, tax, accounting, or financial advice. Acquidex is not a registered investment adviser. Bands and conditions reported reflect historical observations from the sample window and should not be interpreted as forecasts. Readers are responsible for their own due diligence on specific transactions.