How It Works | Archen Partners

The process

Six stages, 6 to 9 months

Most of the sales we advise on run 6 to 9 months from first conversation to funded close. Here is what each stage actually involves.

Weeks 1 to 3

Confidential valuation

We start with your financials and a long conversation. The number that matters is EBITDA, your earnings before interest, taxes, depreciation, and amortization. In plain terms, the profit your business produces in a year. Then we adjust it. If you pay yourself above market, run vehicles through the company, or absorbed one-time legal costs that will not repeat, those expenses get added back to the profit line. Those adjustments are called addbacks, and they are standard practice, not creative accounting. The result is adjusted EBITDA, the number buyers multiply. You leave this stage with a valuation range grounded in what buyers are actually paying, and it stays between us.
Weeks 4 to 8

Preparation and packaging

Before any buyer sees your company, we get it ready to be seen. That usually means a quality of earnings review, an accountant's independent check that your profit numbers hold up under scrutiny, so nothing surprises anyone later. We work out the story with you: what you built, the programs and customers it serves, and where a buyer can take it next. Then we write the confidential information memorandum, the document everyone in this business calls the book. It is the full picture of your company, including your contracts, backlog, and certifications, and nobody sees it without signing a nondisclosure agreement first.
Weeks 8 to 14

Confidential buyer outreach

We do not blast your business to a mailing list. We build a curated buyer list with you, and you cross off anyone you do not want approached. Every buyer signs a nondisclosure agreement before they learn your name. For defense sellers, we also screen buyers for FOCI, foreign ownership, control, or influence, before your company is ever mentioned to them. A buyer with foreign-ownership complications is screened out or flagged for mitigation at the start, not discovered in month five. Your employees, customers, and competitors hear nothing.
Weeks 14 to 20

Offers and negotiation

Offers arrive in two rounds. First come indications of interest, preliminary letters that put a price range on paper so we can see who is serious. Then come letters of intent. A letter of intent, or LOI, is the document where one buyer commits to a specific price and structure and asks for a period of exclusivity to finish the deal. Choosing the right LOI is the most important decision in the whole process, and we negotiate its terms hard before you sign, because your negotiating position is strongest before exclusivity begins.
Weeks 20 to 30

Diligence

Diligence is exhaustive, and you deserve to hear that up front. The buyer's accountants, lawyers, and security advisers will examine your financials, contracts, certifications, payroll, and export-control records, and the requests land while you are still running the company. If your company serves defense or federal customers, there is extra homework: planning the novation of your federal contracts, which is the government's formal consent to transfer them to the new owner, and mapping how facility and personnel security clearances move. Our job is to quarterback all of it. We organize the data room, the secure folder where every document lives, we handle the traffic, and we keep the requests off your desk so the business does not slip while the deal gets done.
Weeks 30 to 36

Close and transition

Lawyers finalize the purchase agreement, funds flow to your account, and the company changes hands. We help you plan the part most founders worry about more than the money: telling your employees, with a clear message about what stays the same and what changes. Most buyers ask the founder to stay through a transition period, and the length and shape of that role is negotiated before you sign, not after. You walk out on terms you agreed to, not terms you discovered.

Valuation

What your business is worth

Buyers price your company as a multiple of profit, and the profit measure they use is EBITDA: your earnings before interest, taxes, depreciation, and amortization. The raw number is rarely the right one, so buyers work from adjusted EBITDA. Adjustments, called addbacks, credit you for expenses a new owner would not carry: an owner salary above market rate, vehicles on the books, one-time legal costs. Done honestly, addbacks raise the number a buyer multiplies, and every one of them has to survive scrutiny in diligence.

Sector	Typical EBITDA multiple
Defense
Precision manufacturing and defense components	5.0x - 8.0x
Aerospace and defense MRO	5.0x - 8.0x
C5ISR and defense electronics	6.0x - 10.0x
Government and mission services	4.0x - 7.0x
Industrial
Industrial automation and electrical services	4.5x - 7.0x
Precision machining and fabrication	3.5x - 5.5x
Industrial distribution	4.0x - 6.0x
Testing, inspection, and calibration	5.0x - 8.0x
Home Services
Residential HVAC and plumbing	5.0x - 8.0x
Residential electrical and generators	4.5x - 7.0x
Roofing and exteriors	4.0x - 7.0x
Pest control and recurring home services	5.0x - 8.0x

Typical ranges we see, every business is different. Where you land inside a range depends on the drivers below.

What moves the multiple

Two companies with identical profit can sell for very different prices. Buyers pay up for:

Defense: sole-source or limited-competition positions, and a healthy prime versus subcontract mix, meaning how much work you hold directly
Defense: funded backlog and recompete timing (a recompete is when a contract comes back up for bid), plus a cleared workforce
Defense: certifications current, from AS9100 and NADCAP to CMMC, with audit-ready books that hold up to DCAA, the government's contract audit agency
Industrial: OEM certifications, integrator partnerships, and installed-base relationships, the customers whose equipment you already support
Industrial: long-run programs, ISO 17025 accreditation where it applies, and modern equipment on the floor
Home services: recurring service agreements and memberships, with a strong install-to-service revenue mix
Home services: route density, technician retention, and a brand and review base that outlives the owner
Every group: customer diversity, with no single customer or program dominating
Every group: a management layer that runs the day-to-day without the founder, and clean books

The buyers

Who is on the other side of the table

Four kinds of buyers dominate these markets. Each pays for something different, and the right one depends on what you want after the sale.

Private equity platform

A fund making its first purchase in your market, with your company as the foundation it builds on. Sector-focused platforms exist across all three of our groups: defense platforms, industrial consolidators, and home services platforms. Each pays for scale and for a management team that can absorb future acquisitions.

Platforms often invite the founder to keep a meaningful minority stake as rollover equity. You sell most of your company today, keep a share of the new, larger one, and sell that share again when the platform itself sells. That second sale is what people call the second bite of the apple, and for some founders it ends up rivaling the first.

Private equity add-on

Your company is bolted onto a platform the fund already owns. Add-on buyers pay for capacity, capabilities, and geography they do not have yet, whether that is machine time, cleared staff, a service territory, or a new customer set.

Because the playbook already exists, add-ons are usually the fastest deals to close. The trade-off is that your company becomes part of an existing operation rather than the center of a new one.

Strategic acquirer

A larger company already in your market. For defense sellers that means a prime, which holds contracts directly with the government, or a tier-1, which supplies the primes. In industrial and home services it means larger operators and national brands. Strategics pay for your customers, your capabilities, and, where it applies, your cleared capacity, and they sometimes pay the highest price because they gain the most.

Be clear-eyed about integration: it means change for your team. Whether your name survives is decided case by case, and if it matters to you, we put it on the table early.

Family office

The investment arm of a wealthy family, buying businesses to own rather than to resell on a clock. Family offices bring patient capital, longer holds, and a lighter touch after close.

They tend to suit founders who care most about continuity for employees and customers, sometimes at a price below the highest bidder.

Defense deal mechanics

Selling a defense business is different

These six mechanics apply when your company serves defense or federal programs. If that is you, we plan for every one of them from day one, because generalist advisers learn them on your dime.

Novation

Federal contracts do not automatically follow the company. Novation is the government's formal consent to move them to the new owner, and it gets planned early, never improvised.

Clearances

Facility and personnel security clearances have their own transfer process. We map what is cleared, and who, before diligence starts so nothing stalls at the finish.

CFIUS and FOCI

CFIUS is the federal committee that reviews foreign investment in American businesses. Buyers with foreign ownership, control, or influence are screened out or set up for mitigation up front, not discovered late.

Set-asides

If you hold small-business set-aside contracts, your size status can change at close. The recompete strategy has to price that in honestly before you sign, not after.

Export controls

ITAR and EAR are the rules governing defense and dual-use exports. We check your registrations and export-control hygiene before buyers do, so findings become fixes instead of price cuts.

Government accounting

Indirect rates, the overhead percentages built into government billing, and your DCAA audit posture can confuse commercial buyers. We translate them into language a buyer's model understands.

Fees and confidentiality

The two questions everyone asks first

What it costs

There is no fee for the first conversation. It costs nothing and commits you to nothing. If you decide to engage us, you pay a modest engagement fee, credited against a success fee that is earned only at closing. Most of what we earn, we earn when your deal closes and your money is in the bank. You will never be surprised by our invoice.

Who finds out

Nobody, until you decide. Every buyer is screened before outreach and signs a nondisclosure agreement before your name is shared, and you approve the list before anyone is contacted. Your employees, customers, and competitors learn about the sale at close, when you tell them on your terms, not before. Confidentiality is not a feature of our process. It is the process.

FAQ

Straight answers to fair questions

Do I have to sell 100 percent?

No. Many founders sell a majority stake and keep the rest, an arrangement usually called a recapitalization. You take real money off the table now, keep equity in the business, and share in the next sale. Full sales, majority sales, and structures in between are all available. The structure follows your goals, not the other way around.

How long until I can fully step away?

Most buyers ask for a transition of 6 to 24 months, and the range is negotiable. The stronger your second layer of management, the shorter your required stay. If a fast exit matters to you, tell us at the start and we will make it a term of the deal rather than an afterthought.

What about my employees?

Buyers are not just buying contracts and equipment. They are buying your team, and whether that team is cleared engineers, certified machinists, or licensed technicians, it is often the scarcest asset on the table. Retention matters to buyers as much as it does to you, and we negotiate protections where they count: pay, benefits, and roles for your key people. Sellers who look after their team tend to attract buyers who do the same.

What if I already have an offer in hand?

Bring it to us and we will pressure-test it against what the broader market would pay. Usually a competitive process beats a single unsolicited offer, and by a wide margin. Sometimes the offer is fair, and when it is, we tell you so.

Am I big enough?

Our guideline is about $500,000 of EBITDA. Below that, most of the buyers we work with will not engage, and we will say so honestly rather than waste your time. If you are not there yet, we will point you in the right direction and tell you what to build toward.

Will the government or my competitors find out?

Not from us, and not by accident. The process is gated by nondisclosure agreements, buyers are screened before they hear a name, and competitors are only approached if you approve them. Your employees and customers learn at close, when you tell them on your terms. For defense sellers there is one more party: the government learns when novation planning requires it, on a schedule we manage with your counsel, not through the rumor mill.

What kills deals?

Late surprises. Customer or program concentration revealed in diligence, indirect rates that do not reconcile, a recompete that expires mid-process, a key cleared employee who walks. Almost every one of these is survivable if it surfaces early, and fatal if it surfaces late. That is why we push for full honesty at the valuation stage: what we know in week one, we can plan around. What a buyer discovers in week twenty, we cannot.

How a sale actually works.