Chemed Corporation’s plumbing arm, Roto‑Rooter Services, completed the purchase of franchise territories in San Francisco, California, and Fort Worth, Texas on March 31 2026. The transaction, valued at approximately $20.6 million, adds service locations that serve a combined population of about 3.3 million people.
The deal expands Roto‑Rooter’s footprint in two high‑growth markets, reinforcing its long‑standing strategy of acquiring franchises to boost market share and profitability. The acquisition is expected to be accretive to earnings in the near term as the new locations ramp up operations, providing additional call volume and economies of scale.
Chemed’s Q4 2025 earnings report showed a 3.7% decline in Roto‑Rooter revenue and a 21.1% drop in Adjusted EBITDA margin, reflecting higher marketing costs and water‑restoration write‑offs. The acquisition is therefore a key area to monitor for future growth and profitability, as it may offset existing headwinds.
While Roto‑Rooter’s revenue fell 3.7% YoY in Q4 2025, the company’s VITAS Healthcare segment grew 1.9% YoY, though its Adjusted EBITDA also declined. The dual‑segment structure provides diversification, but the recent pressure on the plumbing arm underscores the importance of the new territories.
CEO Kevin McNamara noted in October 2025 that, despite a decline in Roto‑Rooter revenue in 2024, there were signs of stabilization and a return to a predictable growth trajectory. The acquisition aligns with that outlook, positioning Roto‑Rooter to capture demand in the San Francisco and Fort Worth markets.
By adding these territories, Roto‑Rooter strengthens its market share in key regions and enhances its ability to leverage franchise operations for scale. The transaction reinforces Chemed’s diversified cash‑flow model, combining healthcare services with essential home services, and may help the company weather economic fluctuations.
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