How to Value a Private Investigator Firm in 2026

I've worked on investigations-services deals ranging from a $400K SDE solo PI practice in Florida to a multi-state insurance-defense firm that sold for north of $30M. The valuation conversation is almost never about the license or the office lease. It's about one thing: how much of the revenue comes from contracted work with insurance carriers, AmLaw 200 law firms, and Fortune 1000 corporate clients versus one-off domestic cases.

Private investigator firms are one of the more misunderstood categories in the legal-services M&A market. Sellers tend to anchor on gross revenue; buyers only care about defensible, repeatable gross profit. Let me walk through how these firms actually get valued.

The Three Tiers of PI Firms

Before you can talk multiples, you have to identify which tier your firm falls into, because buyers price each tier completely differently.

Tier 1 — Solo and small domestic practices. Under $750K revenue, mostly cheating-spouse cases, child custody surveillance, and skip tracing. These sell for 1.5-2.2x SDE, almost always to another licensed investigator. The buyer pool is shallow because the work doesn't scale and the goodwill is almost entirely owner-dependent.

Tier 2 — Regional insurance-defense and SIU firms. $1M-$8M revenue, primarily workers' comp surveillance, AOE/COE investigations, and claims fraud work for carriers like Travelers, Liberty Mutual, Sedgwick, and Gallagher Bassett. These trade at 3.5-5.5x adjusted EBITDA when sold to financial buyers, and up to 6x when sold to a strategic consolidator.

Tier 3 — Corporate intelligence and multi-state platforms. $10M+ revenue, due diligence, FCPA investigations, executive protection, and litigation support for AmLaw firms. Platforms like Kroll, Control Risks, Nardello & Co., and Mintz Group operate here. Multiples run 7-10x EBITDA for quality platforms, with premium transactions clearing 11-12x when there's a scarcity angle.

Why Client Mix Drives Everything

When I model a PI firm, the first schedule I ask for isn't the P&L — it's a client concentration report for the trailing 24 months. The reason is simple: PI work splits into two radically different economic profiles.

Insurance-carrier and law-firm work is effectively recurring revenue. A firm on the approved vendor list for a major carrier receives a predictable stream of assignments every week — surveillance, recorded statements, background checks — at contracted rates. Losing that relationship is hard because the onboarding, background checks, and insurance requirements create real switching costs. Buyers will pay up for it.

Domestic and one-off consumer work, by contrast, is transactional. The marketing cost to acquire the next cheating-spouse case is the same as the last one, margins are thin after case-level expenses, and there's no customer retention to speak of. Buyers will assign a much lower multiple to this revenue — sometimes zero credit at all in a strategic deal.

I've seen two firms with identical $3M top lines get offers that differed by $2.5M. The difference was 80% carrier work versus 80% domestic work.

Calculating Adjusted EBITDA for a PI Firm

PI firm P&Ls are notorious for personal expenses buried in the cost of goods sold line. When I build an adjusted EBITDA, these are the add-backs I look for:

• Owner compensation above market. Replace the owner's salary with a realistic $140K-$180K investigator director wage.
• Personal vehicles booked as surveillance vehicles. Very common. Only vehicles used 80%+ for cases should stay on the books.
• Subcontractor 1099 payments to family members. Must be normalized to market rates or removed entirely.
• One-time litigation or licensing expenses. State PI license renewals, bonding, and any regulatory defense costs should be reviewed carefully.
• Equipment depreciation. Cameras, GPS trackers, covert recording devices — buyers expect these to be depreciated and want D&A added back.

A clean add-back schedule on a $5M-revenue firm typically uncovers $200K-$400K of additional EBITDA. At a 5x multiple, that's $1M-$2M of enterprise value sellers leave on the table when they don't prepare properly.

Who Actually Buys PI Firms?

The buyer universe has shifted significantly in the past five years. It used to be almost entirely other PIs and retiring cops buying books of business. Today, the meaningful bids come from four groups.

PE-backed legal services consolidators. Firms like US Legal Support, Lexitas, and Veritext have historically focused on court reporting and record retrieval, but several have quietly added investigations to their service stack. They'll pay 5-7x EBITDA for tuck-ins that bring carrier relationships.

Claims services platforms. Companies like Command Investigations, Frasco Investigative Services, and Delta Group have been rolling up regional SIU and surveillance firms for the past decade. These are the most active buyers in the Tier 2 segment. Delta alone has completed more than a dozen acquisitions.

Risk and corporate intelligence firms. Kroll, Control Risks, Nardello, Mintz Group, K2 Integrity, and FTI Consulting buy upmarket platforms with corporate and AmLaw client bases. They pay the highest multiples but are extremely selective.

Former federal agents with capital. Ex-FBI, ex-Secret Service, and retired AUSA-turned-investigators with PE backing are a growing buyer class for boutique corporate firms in the $2M-$10M EBITDA range.

What Destroys Value in a PI Firm Sale

Owner is the rainmaker and the license holder. If every carrier relationship runs through you personally and the state PI license is in your individual name, buyers see two compounding risks. They'll demand a long non-compete, a 2-3 year earn-out, and a discount on the headline number.

Unbilled work-in-process piling up. I reviewed a firm last year with $1.8M of unbilled WIP older than 120 days. The buyer treated 60% of it as uncollectible and knocked the purchase price down by $900K at closing. Bill frequently, age your receivables, and write off stale WIP before going to market.

Subcontractor-heavy delivery model. Firms that run on 1099 investigators rather than W-2 employees have worker-classification exposure that terrifies institutional buyers. Quality-of-earnings providers will dig into this in diligence and often recommend an indemnity escrow of 10-15% of deal value.

No case management system. If your firm still runs on spreadsheets and email, buyers assume integration will be painful. Investing in a system like proper case management before sale is one of the highest-ROI things you can do.

Preparing Your PI Firm for Sale

Start 18-24 months out. First, shift your mix deliberately toward carrier and law firm work — even if it means turning down higher-margin domestic cases. Second, formalize your vendor agreements with contracted rate schedules so the revenue looks recurring on paper. Third, hire or promote a second senior investigator who can hold the key carrier relationships independently of you. Fourth, move subcontractors to W-2 where it makes sense, or at least document the independent contractor relationships carefully.

The Bottom Line

A well-run insurance-defense or corporate investigations firm is one of the more attractive niches in legal services M&A right now. The buyer pool is deeper than most sellers realize, multiples have held up even as other sectors compressed, and the consolidation story still has years to run. But none of that matters if your firm is priced and positioned as a solo domestic practice. Do the work to reposition it before you go to market, and the difference can easily be double the enterprise value.