Diligence 4.1
Strategy & Investable Universe
Where the money is, where we buy, and how a book gets built.
Cedarline Capital · Fund I
The UniverseStrategy · 02
Essential residential services

$180B of recurring, local, non-discretionary work.

HVAC, plumbing and electrical services in the US are a roughly $180 billion annual pool spread across more than 100,000 mostly single-location businesses. The demand recurs and cannot be deferred, which is exactly the condition a disciplined roll-up is built for.

$180B
US residential trades pool (annual)
100k+
Independent contractors
90%+
Single-location, owner-operated
57
Median owner age
Sample data, illustrativeCedarline Capital · Universe
Where We BuyStrategy · 03
Two boxes, clearly drawn

Platform criteria and bolt-on criteria.

PlatformThe anchor we build on
Size$3M+ EBITDA
Position#1 or #2 local share
MixService & replacement over new-build
PeopleA second-line manager who can stay
Entry~5–6x EBITDA
Bolt-onWhat compounds it
Size$0.3M–$2M EBITDA
FitAdjacent geography or trade
Entry~4x EBITDA
IntegrationOnto platform systems within 100 days
EffectImmediate pricing & overhead lift
Walk from auctions above 6.5xCedarline Capital · Where We Buy
Portfolio ConstructionStrategy · 04
Base case, $180M fund

Three platforms, ten to fourteen bolt-ons, one operator each.

PlatformTradeEntry EBITDAEntry mult.Bolt-onsEquity (incl. follow-on)
Platform 1 (LOI)Southeast HVAC$6.0M5.3x3 under LOI$38–45M
Platform 2 (exclusivity)Texas plumbing$4–5M~5.5x3–5 mapped$30–40M
Platform 3 (pipeline)Electrical / mixed$3–5M~5.5x4–6 mapped$25–35M
3
Control platforms
10–14
Bolt-ons across the fund
~35%
Reserved for bolt-on capital
≤3.0x
Net debt / EBITDA, platform level
Concentrated by designCedarline Capital · Construction
Value CreationStrategy · 05
Pulled inside the business, not from a board seat

Five levers on every platform.

1Pricing & dispatchStandardised pricing books and disciplined dispatch to lift margin per call.
2Recurring revenueMembership and service agreements turn one-off jobs into an annuity.
3Technician engineRecruiting, apprenticeship and retention to solve the binding constraint.
4Shared back officeFinance, marketing and a central call centre across the platform.
5Cross-trade referralHVAC, plumbing and electrical feeding each other work.
Operator-led value creationCedarline Capital · Levers
The ArbitrageStrategy · 06
Illustrative platform math

$6M EBITDA in at 5.3x, ~$18M out at 9.5x.

At entry
$32M
$6M EBITDA × 5.3x. Platform acquired.
After build
$18M
EBITDA after bolt-ons and organic growth over the hold.
At exit
$171M
$18M EBITDA × 9.5x. Sold to scale buyer.

Two engines in one deal: EBITDA grows 3x through buy-and-build, and the multiple lifts ~4.8 turns from sub-scale to scale. The base case treats the growth as the driver and the multiple as support.

Single-platform illustration · sample dataCedarline Capital · Arbitrage