As the consolidation wave continues to sweep across the collision repair industry, not all shops are created equal in the eyes of strategic buyers. Some command top dollar. Others get passed over entirely. Here’s what separates the standout shops from the rest, based on the latest insights from across the industry.
As the consolidation wave continues to sweep across the collision repair industry, not all shops are created equal in the eyes of strategic buyers. Some command top dollar. Others get passed over entirely. Here’s what separates the standout shops from the rest, based on the latest insights from across the industry:
At the core of any high-value acquisition is reliable profitability. Consolidators are looking for shops with well-documented financials, consistent gross profit margins (typically over 45%), and EBITDA margins in the 15–20% range. Buyers want to see multi-year performance that isn’t just a fluke—stability and repeatability are key. Shops with these strong margins often command premium multiples of 4-6x EBITDA, particularly for high-growth or scaled multi-site operations.
Clean books, solid revenue tracking, and transparency around expenses allow acquirers to underwrite a deal with confidence. If a shop can’t show sustainable EBITDA north of $1 million, it will struggle to attract serious offers.
Top-dollar shops aren’t just profitable—they’re also technically advanced. OEM certifications from brands like Tesla, Mercedes-Benz, Audi, BMW, and Rivian are increasingly non-negotiable for buyers seeking to future-proof their platforms.
But it’s not just about the plaque on the wall—consolidators want shops that:
The “old school” way of doing things won’t cut it anymore. High-performing shops embrace cutting-edge technology, calibration, and documentation. These shops are not only more efficient—they’re more defensible in a legal environment and trusted by insurers and customers alike.
A great shop in the wrong place can still be a tough sell. Location matters—a lot. Shops located in growth markets with strong car parc trends, affluent customer bases, and high insurer activity tend to get higher multiples. Urban or suburban areas with easy access, high visibility, and strong drive-by traffic are particularly desirable.
Shop appearance and customer experience also significantly impact valuation. Facilities with strong curb appeal, cleanliness, and modern customer areas signal attention to detail and quality that buyers value.
Also, real estate ownership (or a long-term, market-rate lease) can sweeten the deal and create more negotiating power. Buyers are looking for long-term operating security.
Consolidators aren’t just buying a facility—they’re buying a team. Shops with low turnover, tenured leadership, and a culture of continuous improvement are incredibly valuable. Trained technicians, strong estimators, and a reliable GM create continuity post-sale.
Shops that lean into modern SOPs, digital workflows, and accountability systems stand out. Consolidators want to see that the team isn’t reliant on one person (usually the owner) and can thrive under new ownership.
Too much reliance on any one insurer (especially a low-paying DRP) or a single OEM can be a red flag. High-performing shops have a diversified revenue stream, with a healthy mix of:
Balance is the name of the game. Shops that are 100% DRP or overly dependent on one manufacturer carry more risk—and that means less value.
Collision repair businesses that pull top dollar in today's market typically check these boxes:
On the flip side, shops that are financially unstable, operationally outdated, overly dependent on one revenue source, or located in declining markets often can’t even get an offer. In a consolidating landscape, being good isn't good enough anymore—you have to be great and prepared.
05/13/2025
