Roofing contractor, 44% maintenance, partial storm-year normalization required, warranty tail unquantified
§ 01 · Observed
What was documented in diligence.
Revenue: $890,000 maintenance/replacement (44%), $1.14M storm/insurance (56%). Trailing 12 months included one above-average hail event in Q3 — storm revenue $190,000 above the 3-year average. Normalizing storm revenue to 3-year average reduced SDE by $142,000. Warranty reserve: no reserve in seller P&L; 3-year installation volume suggests $28,000–$52,000 annual expected claim cost unaccrued. Supplement revenue: $160,000 in trailing period vs. $95,000 3-year average — normalization reduced SDE by $65,000. Subcontractor crews: 3 of 3 crews are owner-relationship-dependent; no entity-level agreements.
§ 02 · Outcome
What happened.
Initial ask 3.1× storm-year SDE. After storm normalization, warranty reserve accrual, and supplement revenue restatement, adjusted SDE declined 29%. Repriced to 2.4× adjusted SDE. Crew portability risk priced into $120,000 seller note with 12-month retention milestone.
§ 03 · Structural Pattern
How this deal fits the four-pillar framework.
Mid-band placement after storm normalization moves the deal from what appeared to be a maintenance-positioned business to one where storm revenue dominates. Warranty tail and crew portability are secondary adjustments that compound the SDE reduction. Consistent with the most common Q1 2026 repricing pattern in roofing.
This is an anonymized composite drawn from observable structural patterns in the sample window. It is not a specific deal. The structural pattern, band placement, and outcome reflect commonly observed combinations; a future consented case study will replace this entry.
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