M&A activity snapshot
Business services has been the most frequently reported sector in GF Data's lower-middle-market deal data for five years. GF Data reports that Business Services consistently led deal count over the last five years, especially in the $10 million to $25 million and $25 million to $50 million size tiers. In small deals, the sector had 57 reported deals through H1 2025, nearly half of all small transactions.
The wider market slowed in 2025 and is recovering in 2026. GF Data's contributors reported 297 completed transactions in 2025, a 23% decline from 2024. In the first half of 2026 they recorded 170 completed transactions, on pace for about 340 deals.
The sector is large and fragmented. Administrative and support services (NAICS 561) generated $1,225,849 million of revenue in 2025, up 2.2%. Census business statistics for 2022 show 355,191 firms in NAICS 561, of which 314,031 had fewer than 20 employees, which is why roll-up strategies keep finding targets.
Who is buying
PE-backed platforms do most of the buying, largely through add-ons. Lincoln International names Landscape Workshop (Ares), Pye-Barker Fire & Safety (Altas, Leonard Green), PremiStar (Partners Group) and Summit Fire & Security (BDT & MSD Partners) among the facilities services acquirers active in Q2 2026. Contract security roll-ups continued into 2026, with Marksman Titan Security Group (Quad-C) buying Priebe Security Services.
Public strategics buy for geography and service lines. ABM, the largest U.S. janitorial and facility contractor, competes mainly with regional and local owner-operated companies, which are the same companies it acquires. Waste haulers, uniform-rental companies and security consolidators play the same role in their verticals (see the subindustry pages below).
Independent sponsors and search funds compete for smaller, single-market companies below platform size. The lower end is financeable for add-ons: in H1 2025, add-ons valued between $1 million and $5 million carried total debt of 5.7x EBITDA, versus 2.3x for platforms.
What buyers look for
Recurring contract revenue. Facility services work is contract-based but rarely locked in. ABM notes that many of its service agreements are cancelable on short notice, yet it has historically had a high rate of client retention. Buyers pay for proof of retention, not just contract count.
Labor discipline. Direct labor represented 68% of ABM's total revenue in 2025. Wage pass-through clauses, scheduling, and turnover control decide margins. The sector's workforce is mostly non-union: BLS shows union representation of 4.5% across NAICS 56, though large contractors can be far higher.
Competitive position. A majority of ABM's revenue comes from services that require competitive bids, and the low barrier to entry makes the market very competitive. Buyers look for something a competitor cannot copy quickly: route density, licensing, specialized certifications, or long client relationships.
What makes a strong company
Business services companies that reach the top of the multiple range typically show:
- Multi-year contracts with documented renewal history, price escalators, and no single client dominating revenue.
- Margins that hold when wages rise, because contracts pass labor costs through.
- A management team that runs operations and holds client relationships without the owner.
- Clean wage-and-hour, licensing, and safety records; buyers audit all three.
- Scale where it counts. GF Data data shows the premium paid for above-average financial performers averaged about 15% historically but was 7% in Q1 2026, so size and contract quality now carry more weight than a single strong year.
Valuation and deal structure
Business services trades at or near the top of the lower middle market. GF Data's $10-250 million TEV series shows business services at 7.2x in 2024 and 7.5x year-to-date 2025, against a long-run 7.0x across 1,333 deals. In H1 2026, business services led the market at 7.5x, while distribution fell to 6.0x.
Size moves the multiple more than sector. Across all industries through Q3 2025, deals at $10-25 million TEV averaged 6.4x, $25-50 million 6.8x, $50-100 million 8.3x, and $100-250 million 10.3x. Below that, small business services deals averaged 6.2x EBITDA in H1 2025, a 0.4x premium to the historical average of 5.8x.
Rollover is standard in platform deals. 68.3% of completed platform deals through Q3 2025 included seller rollover equity, an average of 14.8% of TEV. Public comparables trade far higher than private deals: the Lincoln Facilities Services Index was valued at 16.8x EV/EBITDA as of Q2 2026, a ceiling a private seller should not expect to reach.
Subindustries
Each vertical below has its own buyers, value drivers, and regulatory issues. Janitorial and security are labor businesses; waste and linen are route-and-asset businesses; event production depends on venue contracts and equipment.