Beyond Price: The Deal Terms That Can Make or Break Your Exit

When most restoration owners think about selling their business, the first question that comes to mind is: What’s my company worth?

Price matters, of course. But here’s the truth that many owners don’t realize until they’re in the middle of a transaction: deal terms often matter just as much, and sometimes more, than the headline purchase price.

A $20M offer can turn into $14M net to the seller after terms, adjustments, and holdbacks are factored in. On the other hand, a well structured deal, even with a lower "headline" purchase price, can actually deliver more cash in hand and a cleaner exit. The difference comes down to the details.

The Terms Buyers Use to Shift Risk

Sophisticated buyers negotiate price and they negotiate risk allocation. They use deal terms to push as much of that risk onto the seller as possible. Here are a few common terms you’ll likely encounter:

1. Earnouts

Part of the purchase price is contingent on hitting future performance targets. In restoration, this can be tricky. Earnouts can be a useful tool to bridge a valuation gap and align buyer and seller incentives if structured carefully, but they’re also where buyers often “buy cheap” today and promise later dollars that may never materialize.

2. Escrows & Holdbacks

A portion of your purchase price is held back in an escrow account, usually for 12–24 months, to cover potential claims, customer retention targets, and other transition related terms. These amounts can range from 5–15% of the deal, meaning millions of dollars sit in limbo if not negotiated properly.

3. Working Capital Adjustments

This one catches many owners off guard. Buyers expect you to deliver a “normalized” level of working capital (non-cash current assets minus current liabilities) at closing. If you’ve been slow to collect receivables historically and carried a high amount of working capital, that could come directly out of your pocket in a purchase price adjustment. Getting this right requires a careful analysis of historical trends and clear definitions and a transparent calculation in the purchase agreement.

4. Seller Notes

Sometimes buyers ask you to “finance” part of the purchase price by holding a seller note. Done right, it can bridge valuation gaps, defer taxes, and provide a steady income stream in the future. Done wrong, it exposes you to credit risk if the buyer underperforms after close.

Why Restoration Deals Are Unique

In restoration, these terms carry even more weight because of the industry’s dynamics:

• Seasonality or the "reliance" on events can make earnout structures especially risky.

• Collections cycles mean working capital targets are complex - commercial and insurance AR doesn’t always match a textbook model.

• Margin variability between mitigation, repair / reconstruction, and ancillary services work can lead buyers to push for conservative assumptions unless the data is packaged correctly.

  
  

If you don’t anticipate these challenges, you’ll lose leverage at the negotiating table.

How the Right Advisor Protects You

This is why industry expertise in sell-side M&A advisory is important for bringing the right buyers to the table who understand the industry. It’s about having someone in your corner who:

• Knows how buyers structure deals and where they push hardest.

• Understands the restoration industry and how to explain its nuances to defend your value.

• Keeps control of the process so you’re negotiating from strength, not reacting under pressure.

  
  

At Restoration Business Advisors, we understand what buyers use to shift risk, and we know what levers to use to push back. Our role is to protect and capitalize on the value you’ve built, so the terms of the deal work for you, not against you.

The Deal

The price on paper doesn’t tell the full story. What matters is how much you actually take home and how clean the exit is once the deal closes.

That’s why when it’s time to sell your restoration business, you don’t just need any buyer, you need an advocate who knows the industry, understands the details, will find you the right buyer, and will fight to get you the right terms.

At Restoration Business Advisors, that’s exactly what we do.