I’ve bought several pest control companies over the years while building Pest Badger to over $10 million in annual revenue. And honestly? I’ve made mistakes along the way. But I’ve also learned what works and what doesn’t when it comes to acquisitions.
If you’re running a pest control company and thinking about buying another business, or maybe you’re just getting started and want to buy your way into the industry, this guide is for you.
When Should You Start Looking at Acquisitions?
Here’s the truth: there’s no magic number.
It’s different for every company and every market. But if I’m being honest, I’d say you should start looking when you hit around $600,000 to $700,000 in annual revenue. That’s kind of my sweet spot these days.
Why that number? At $600,000 to $700,000, you’ve proven your business model works. You have systems in place. You understand operations. And most importantly, you have either the cash flow or the borrowing power to actually close a deal.
That said, if you’re brand new to the industry and want to buy your way in with a million-dollar company, there’s nothing wrong with that approach either. I’ve seen it work. You’re skipping the startup phase entirely and getting an immediate customer base, trucks, equipment, and brand recognition.
The real question isn’t how big you are. It’s whether you have the capital, the systems, and the bandwidth to integrate another company into your operations.
Why Buy Instead of Just Growing Organically?
Buying another pest control company is super fast growth. It might also be the most expensive way to grow depending on the deal you get, but speed matters.
Let me break down the real math here. If you’re growing organically, you might add 500 to 1,000 customers a year through door-to-door sales, digital marketing, and referrals. That’s solid growth. But if you buy a company with 2,000 customers? You just added two to four years of growth in a single transaction.
Here are the real reasons I look at acquisitions:
Route Density: Maybe the company is in your current market. You buy them, combine their routes with yours, and suddenly your technicians have way less drive time. They’re making more money, you’re more efficient, and you have stronger brand awareness in that area.
Think about it this way: if your tech is driving 30 minutes between stops, and you add more customers in the same neighborhoods, now they’re driving 10 minutes between stops. That’s three times the productivity. Same labor costs, triple the revenue potential.
New Market Entry: Want to break into a new city or region? The easiest way is to go buy an established company over there. You get instant presence instead of starting from scratch.
When we expanded into Minnesota, we could have started cold. Hired some salespeople, started knocking doors, built from zero. Instead, we found a local company that already had customers, trucks, and brand recognition. We were profitable in that market on day one.
Eliminate Competition: Sometimes you’re buying a competitor just to take them off the board. If there’s another company in your market doing good work and stealing deals from you, buying them might be cheaper than competing with them for the next 10 years.
At the end of the day, it comes down to speed and strategic positioning.
What Size Company Should You Actually Buy?
I get asked this all the time. And honestly, there is such a thing as too small.
A lot of people post online that they’re selling their company, and they’ve got maybe $200,000 in revenue. Look, there’s some value there. It is a company. But here’s the problem: they see all these things online about “three times revenue” valuations, and they think their $200,000 company is worth $600,000.
That’s just not reality.
Yes, you’ll hear “three times revenue” thrown around a lot. But at the end of the day, acquisitions are based off EBITDA (your cash flow, your actual profit). Revenue matters to a point at scale, but profit is what really counts.
Here’s a real example: Let’s say a company does $250,000 in revenue. Sounds decent, right? But when you dig into the numbers, maybe they’re only netting $30,000 to $40,000 in actual profit after paying themselves a reasonable salary. At a 3x EBITDA multiple, that company is worth $90,000 to $120,000, not $750,000.
So if someone’s doing $250,000 in revenue? To be honest, I really don’t want it unless I can almost get it for free. The juice isn’t worth the squeeze at that size.
There’s just too much work involved in integrating a small company. You still have to transfer licenses, rebrand trucks, migrate customers to your CRM, train their technicians on your systems. Whether the company has 200 customers or 2,000 customers, the integration work is basically the same.
That’s why I focus on companies doing at least $600,000 to $700,000 or more. The ROI on your time and effort is just better.
How to Find Companies to Buy
In a perfect world, I’m looking for off-market deals. Not deals posted by a broker.
Don’t get me wrong, brokers have their place. But they’re trying to get the absolute most for their client, and they don’t really want to work with multiple buyers. There are a lot of nuances there. They hardly sell any of these deals the way you’d think.
So I focus on off-market opportunities first.
Building Relationships is Everything
I connect with other business owners in my markets. I build good relationships with these guys. I have mentors, older guys in the industry who might be thinking about retirement. Those relationships matter.
Some of my best deals have come from people finding me because I’ve built a solid reputation. They see me as a potential buyer, they’re ready to retire and hang up the hat, and they reach out.
My Approach to Finding Deals
I’ve found companies in all kinds of ways:
Some have found me: They see what we’re doing at Pest Badger and reach out when they’re ready to sell.
Direct outreach: I’ve sent a lot of direct messages on LinkedIn. Actually, it’s usually a VA doing it for me, but still. If you’re listening to this, you might have gotten one from me.
In-person connections: When we opened our Minnesota office, we were renting a storage unit. The guy who owned that storage unit? He also happened to own a pest control company that was getting ready to sell. His dad mentioned it, and boom, we had a deal to look at.
Walking in cold: Just like door-to-door sales, I’ve literally walked into people’s offices and asked them face to face if they’re ready to sell. Didn’t always work out. Nobody asked me to leave or anything, but they just weren’t interested yet. But you know what? Now that seed is planted. When they do want to exit, I might be the first person they think of.
Patience Pays Off
One deal I personally reached out on? The owner told me no the first time. Two years later, he ended up wanting to do the deal.
Another one took six months just to sit down, come to terms, and get to know each other one on one.
Not all of them work out. I’ve had a lot fall through. But I’m always learning something from every single one.
Due Diligence: What You're Actually Buying
At the end of the day, you’re buying their financials. You’re buying their book of business. You’re buying their trucks.
Here’s what you need to look at:
Their actual customer list: Get into their CRM and see how many customers they really have. What’s the average customer worth? Are they doing all one-time services, or do they have programs?
This is where you’ll find surprises. I’ve looked at companies that claimed 3,000 customers, but when I got into their system, 2,000 of them were one-time customers from three years ago who never came back. The real recurring customer count was 1,000. That’s a massive difference in valuation.
Equipment and assets: See all their trucks, equipment, everything physical they own.
Are the trucks in good shape or are they beaters with 200,000 miles that you’ll need to replace immediately? Do they have modern equipment or are they running stuff from 2005? This all factors into your offer.
The real numbers: As business owners, we’re always super optimistic. We think, “Oh, they have 5,000 one-time clients, and I can convert all these to quarterly programs.” That’s just not realistic. You’ll be lucky if you convert half. Maybe less.
I learned this the hard way. On one of my early deals, the seller had a ton of one-time mosquito customers. I thought, “Easy, I’ll just convert these to full-service programs.” Reality? Maybe 10% converted. The rest just wanted mosquito spray once a year.
Customer retention: Look at their year-over-year retention. If they’re losing 30% to 40% of their customers every year, that’s a leaky bucket. You’re not just buying customers, you’re buying a customer retention problem.
Contracts and agreements: Do they have any commercial contracts? Property management agreements? Those can be gold or they can be trouble. Check the terms. Are they locked in at low rates? Are the contracts coming up for renewal soon?
There are a lot of nuances here. I’ve been through some good deals and some bad deals. You need to be careful about what you’re buying.
The Biggest Mistakes (And Why 80-90% of Acquisitions Fail)
There’s a stat out there that 80 to 90% of companies in home services are not happy with their acquisitions. I believe it.
Here’s why: we get too emotionally invested.
We want to buy because it looks good in our heads, sounds good in our heads. But on paper, we know it’s probably a bad move. We still move forward because we’re already invested. We’ve already put this much time into it.
Maybe it’s the competitiveness in us that doesn’t want to walk away from the deal. Whatever it is, we get too emotionally attached and we overpay.
I’ve done it. I’ve learned from it.
Mistake #1: Falling in Love with the Brand: Just because they have nice trucks and a cool logo doesn’t mean the business is solid. I almost overpaid for a company once because their branding was great and I could envision it fitting perfectly with ours. Then we dug into the numbers and realized their customer retention was terrible.
Mistake #2: Trusting the Seller’s Numbers Without Verification: Always, always verify everything. I’ve seen sellers claim certain revenue numbers that didn’t match what was actually in their bank account or what their tax returns showed. Trust, but verify everything.
Mistake #3: Underestimating Integration Costs: You’re not just buying the company. You’re buying the headache of integrating it. New software migration, rebranding costs, training their team on your systems, potential customer loss during the transition. Budget for this stuff or it’ll eat your profits.
Mistake #4: Ignoring Cultural Fit: If the seller runs a laid-back operation and you run a tight ship, there’s going to be friction when you take over. I’ve had technicians quit within weeks of an acquisition because they didn’t like the new structure. That’s lost knowledge and customer relationships walking out the door.
The key is to go in with your eyes wide open. Run the numbers conservatively. Don’t get emotionally attached. And be willing to walk away if it doesn’t make sense.
What Are You Really Buying?
People ask me all the time: “What are we actually buying here?”
It’s simple. You’re buying their customer list. That’s it.
There’s a lot to unpack, but basically that’s what you’re getting. It’s mostly goodwill. The recurring revenue is the prize. Then you get some trucks and equipment to go along with it.
But the customer list? That’s gold.
Final Thoughts: Just Ask
If you’re serious about acquiring a pest control company, start building relationships now. Connect with other owners. Be visible in your market. Make it known that you’re a potential buyer when the time is right.
And don’t be afraid to just ask. Walk into offices. Send messages. Plant seeds.
All they can do is say no. And maybe they’re not ready right now. But maybe they’re getting a little older. Maybe in a year or two, they’ll remember you were the one who asked. Then you’ll have a relationship already built when they’re ready to exit.
Want to connect with 2,000+ other pest control business owners who are growing and scaling their companies? Join our free Facebook group, Pest Control Millionaires. And if you want to dive deep into marketing strategies that actually work for pest control companies, grab a copy of our book, Zip Code Kings.
Now get out there and start looking for your next acquisition.
