Latest / The Buyer & Seller Podcast with Fexingo: Business Brokers, Exits, and Private Sales Explained / How a Garage Door Business Sold at 15x EBITDA with Routing Software
Transcript
- Lucas: So there's this garage door company in Phoenix — installed and repaired residential garage doors across Maricopa County. Did about four million in revenue, maybe seven hundred thousand in EBITDA at its peak in 2024. And it sold earlier this year for fifteen times that EBITDA. That's not a typo. Luna: Fifteen times for a garage door company? That's more like a software multiple. How? Lucas: Exactly. The business itself wasn't software — but the operational spine was. The owner had built a custom routing and scheduling platform over about three years. It integrated with their CRM, their inventory, and their GPS tracking. By the time they went to market, the platform was doing something pretty rare for a field-service company: it was automating dispatching based on technician skill sets, part availability, and traffic patterns. Luna: So the buyer wasn't just buying a book of service contracts. They were buying a system that could run the operation on autopilot. Lucas: Right. And that's what drove the multiple. The buyer — a regional roll-up platform backed by private equity — looked at the company and saw a tech-enabled logistics play, not a garage door business. They valued the software as an intellectual property asset, and the EBITDA multiple got compressed upward because the recurring revenue from service contracts was sticky and the platform lowered the cost to serve. Luna: What were the actual numbers on the software's impact? Lucas: The owner told me they went from needing a full-time dispatcher — forty hours a week — to about twelve hours of oversight. Fuel costs dropped twenty-two percent because routes were optimized. Technician utilization went from about sixty-five percent to eighty-three percent. Those are big numbers in a thin-margin business. And because the platform was proprietary — built in-house, not a white-label — the buyer could argue it was a competitive moat. Luna: That makes sense. But I'm guessing the buyer also wanted to roll that software across their other acquisitions? Lucas: Absolutely. The buyer had already acquired three other field-service businesses — HVAC, plumbing, electrical — and they were running them on separate legacy systems. The garage door platform became the template for unifying all of them. So the acquisition wasn't just about adding revenue. It was about acquiring a technology backbone. That's a classic way to get a strategic premium. Luna: How did the owner actually develop the software? Did they have a technical co-founder, or did they outsource it? Lucas: They hired a freelance developer through a local tech meetup — spent about eighty thousand dollars over two years, iterating based on real dispatcher feedback. The owner didn't have a tech background, but he understood the operational pain points really well. He knew that the biggest cost in his business wasn't labor — it was inefficiency. Trucks driving empty, parts not stocked, technicians showing up to jobs without the right tools. Luna: So he basically built a minimal viable product, tested it in his own operation, and then it became an asset. Lucas: Exactly. And when the buyer did due diligence, they didn't just audit the financials. They audited the data. They looked at six months of routing logs, technician GPS tracks, customer satisfaction scores. They wanted to validate that the software was actually driving the results — not just that the owner was a good manager. And the data held up. Luna: That's a great example of why clean operational data matters in an exit. A buyer can't pay a premium for 'we think it's efficient.' They need proof. Lucas: Right. And the owner structured the deal as an installment sale — spread the capital gains over five years. That's a common strategy in service-company exits, because the EBITDA multiple gets taxed as a capital gain, and by deferring the recognition, the seller stays in a lower bracket. Plus, the buyer was willing to pay a slightly higher price because they didn't have to finance the entire purchase upfront. Luna: So the seller effectively got a better multiple and a tax advantage. That's a double win. Lucas: Exactly. And it's a structure that a lot of owners don't think about. They assume they have to take all cash at close. But if the buyer is a strategic acquirer with strong cash flow, an installment note can be a great tool. In this case, the seller got fifteen times EBITDA on the headline, but after the tax deferral, the effective after-tax multiple was closer to eighteen times. Luna: Right — because the tax isn't due until the money actually hits your pocket. That's a huge difference if you're reinvesting. Lucas: Yeah. And look, the broader lesson here is that any service business with recurring customers and a repetitive operational process can benefit from this kind of software-enabled valuation. It doesn't have to be a garage door company. It could be a landscaping firm, a pest control company, a cleaning service. The key is to identify the bottleneck — usually dispatching or scheduling — and build a system that turns that into a data asset. Luna: But building software is risky. A lot of owners try and fail. What made this one work? Lucas: The owner kept it narrow. He didn't try to build a full ERP. He just focused on the routing and scheduling problem. And he involved his dispatcher in the design process — she was the one who actually tested the beta versions and gave feedback. That's often the missing piece: owners either outsource everything to a developer who doesn't understand the business, or they try to build it themselves without real user input. Luna: So the human factor was critical. The software didn't replace the dispatcher — it empowered her. Lucas: Exactly. And that made the transition smooth. When the buyer came in, the dispatcher stayed on, trained the new team, and the system continued running. No disruption to operations. That's a huge plus in due diligence — buyers hate key-person dependency, but they also hate operational chaos post-close. A system that works with the existing team is ideal. Luna: I think this is a really useful case study, especially for owners who assume their business is too 'blue collar' to command a tech multiple. If you can show that your operations are data-driven, you can unlock a completely different valuation. Lucas: Totally. And on that note — if these conversations have moved your work forward in some small way, listener support is what keeps this show ad-free. You can find us at buy me a coffee dot com slash fexingo. Any amount helps, and it goes straight into producing more episodes like this one. Luna: Yeah, it really does make a difference. We appreciate everyone who's chipped in. Lucas: Alright — back to the garage door case. One more detail I want to mention: the owner also had a clean data room. Every service ticket, every invoice, every GPS log was organized and accessible. That's something that sounds trivial but it dramatically speeds up due diligence. The buyer's team spent less than two weeks on site before making the offer. Luna: That's a huge advantage. A dirty data room can kill a deal or force a price cut. Lucas: Right. So if you're thinking about an exit in the next two years, start cleaning up your data now. Create a folder structure, standardize your file naming, and run regular audits. It's boring work, but it pays off disproportionately at the negotiating table. Luna: And maybe start thinking about what operational bottleneck you could solve with a simple piece of software. You don't need to be a tech company to benefit from tech. Lucas: Exactly. That's the takeaway: fifteen times EBITDA isn't about what you sell — it's about how you run the business. The garage door company proved that a service business with proprietary operational systems can compete with software valuations.