Raj Kankaria·July 24, 2025

You've Been Served: Buying a $1.3m Process-Serving Company | Raj Kankaria Interview

Raj Kankaria is a former army officer, investment banker, and LG-company strategy executive who found himself simultaneously unemployed and served divorce papers in 2023. Intrigued by what process servers earned, he got certified and began contracting for Houston-based Lonear Attorney Service, building an 18-month relationship with its owner Patrick Yoder. When Yoder needed to exit to focus on his litigation-finance startup, Raj offered to buy the business for $1 million (4x SDE on ~$250k-$300k earnings, $1.3m revenue) structured as a seller-financed deal: $600k note over seven years at 7% interest, 30% equity retained by Yoder, and $100k in cash equity split equally between Raj and a co-investor. The deal required no SBA loan and was predicated on deep mutual trust. Just 29 days post-close at recording, Raj is already pushing through cultural change — standardizing work hours and cutting overtime abuse left over from Yoder's absentee period — while pursuing organic growth via a new preferred-vendor agreement with Infotra/Serve Manager and pitching tech-streamlined workflows to new law-firm clients. His medium-term goal is to reach a $2m revenue run rate by year-end and grow 30% annually thereafter, with an eye toward inorganic consolidation of the hyper-fragmented process-serving industry, which he believes is the next sector to attract meaningful PE rollup activity.

Deal facts

purchase price: $1 million
multiple: 4x SDE
sde ebitda: SDE ~$250k-$300k
revenue: $1.3m
financing structure: $600k seller note (7 years, 1-year interest-only with option for 2-year interest-only, then 5-6 year amortization, 7% interest) + 30% equity retained by seller + $100k equity from buyer and partner ($50k each)
notes: No SBA loan used. Asset purchase structure. Personal guarantee signed by buyer. Seller (Patrick Yoder) retained 30% equity. Co-buyer/partner contributed $50k alongside Raj's $50k. Seller had previously been offered a 5x multiple with earnout from a competing buyer but accepted 4x clean deal. A significant SBA rule change on June 1 (close date) nearly derailed the deal.

Why this business

Raj discovered process serving by chance when he was served divorce papers while unemployed and asked the server what he charged — roughly $100-$120 a job. He started serving papers himself as a side gig, contracted with Lonear Attorney Service, built a close relationship with its owner Patrick Yoder over 18 months, and when Patrick needed to exit to focus on his litigation-finance startup, Raj offered to buy the company he already knew intimately rather than taking the role of president.

What's working

Deep prior relationship with the seller — 18 months of working alongside him as a contractor, helping with business development — removed virtually all due-diligence risk for both sides
Becoming a preferred vendor/partner for Infotra (Serve Manager's parent company), which will route new jobs to Lonear
Tech-enabled pitch to clients: offering streamlined e-filing and tracking through Serve Manager to win business from competitors still using paper-and-manual workflows
Recurring, relationship-based revenue from law firms and national process-service companies that rarely switch providers once satisfied
Counter-cyclicality: debt-collection volumes rise in economic downturns, providing a partial hedge
AI augmenting back-office data entry, reducing manual input of petition details
Nationwide reach by exchanging out-of-market jobs with peer companies, extending revenue beyond Houston
Industry fragmentation and early PE/rollup interest set up an inorganic growth path

What's hard

Implementing operational changes (overtime policy, fixed work hours) immediately upon closing caused emotional pushback from employees accustomed to a lax, absentee-owner culture
SDE of ~$250k-$300k leaves limited cash after servicing the $600k seller note, resulting in a $120k salary — a significant step down from prior W2 earnings of $300k-$900k
Seller was only willing to do a seller-financed deal due to high mutual trust built over 18 months; this deal structure would be hard to replicate with a cold seller
Business scale ($1.3m revenue) is below the ~$2m threshold where larger national consolidators are actively acquiring, so growth is needed before a strategic exit is achievable
Industry is highly unsophisticated and fragmented, requiring the buyer to professionalize operations largely from scratch

Notable quotes

I asked the guy how much he charged to serve each paper. And he told me a number that was a lot higher than what I was anticipating. And so I started serving papers, got myself a process server certification and was going door to door serving papers for various lawsuits, divorce, personal injury cases.

Rather than looking at historical financials, I went ahead and looked at the projected financials for 2025. They were about 250 — a little bit over 250,000 of IBIDA — about 1.3 million in revenue.

I offered him a 4x multiple structured favorably and de-risked for both of us at $1 million. And I just got him the LOI first and he accepted.

I am trading salary for two things. One is time — I mean time in the sense that I can do stuff like this in the middle of a workday. The second thing I'm trading salary for is the opportunity to build something of my own which I am very confident is going to grow.