Kroll’s latest industry report on residential HVAC services validates what our team at The Advisory Investment Bank has been seeing firsthand across hundreds of conversations with essential-service founders.
The global HVAC services market now exceeds $350 billion, with steady growth projected. But the real story isn’t about industry size — it’s about who is buying, why they’re buying, and what determines value.
Below is our breakdown of what this means for HVAC, plumbing, and electrical owners who may be considering an exit in the next 12–36 months.
1. Private Equity Dominates the Buyer Landscape
Kroll highlights that private equity continues to drive the majority of HVAC transactions. This mirrors our own deal flow:
70%+ of HVAC deals today go to PE-backed platforms.
Why?
- Recurring revenue
- Inelastic demand
- Multi-trade cross-sell potential
- Highly fragmented local markets
- Predictable cash flow
If you run a strong HVAC company, you are on private equity’s radar—whether you realize it or not.
2. Recurring Revenue Is the #1 Value Driver
Memberships, maintenance contracts, tune-up plans — they all matter far more today than they did five years ago.
In buyer models, recurring revenue can increase valuations by 1–3 full turns of EBITDA.
If you don’t have a membership program or have an underdeveloped one, it’s an immediate opportunity to increase your valuation.
3. Bundled Services Outperform Single-Trades
PE platforms love HVAC companies that can eventually bolt on:
- Plumbing
- Electrical
- IAQ / filtration
- Home energy
- Smart home services
Kroll’s report reinforces that multi-trade service providers command higher buyer interest and higher multiples.
4. We Are Now Halfway Through the Consolidation Cycle
This is the most important point in the report — and the one HVAC founders must understand.
According to Kroll:
We may be at the midpoint of the residential HVAC consolidation wave.
Meaning:
- Multiples are still strong
- Buyers are active
- Demand is high
But the second half of a rollup cycle historically means:
- More competition among sellers
- Buyers becoming more selective
- Multiples stabilizing or tightening
- Higher diligence standards
- Fewer “above market” outcomes
This aligns exactly with what we’ve seen across the 550M+ in essential-services deals we’ve worked on.
5. Why This Matters for Owners
For an HVAC owner thinking about selling in the next few years, timing will be everything.
The founders who capture peak valuations will be those who:
- Enter the market with preparation
- Understand the buyer landscape
- Run a competitive process (not a single-buyer conversation)
- Avoid being underpriced by unsolicited inbound offers
- Engage advisors who know the HVAC buyer universe extremely well
This is precisely why The Advisory exists — to help Main Street owners avoid being out-negotiated by billion-dollar platforms with teams of deal professionals.
6. Our Take at The Advisory
The HVAC sector still offers a tremendous exit opportunity. But the window will narrow, just like it has in pest, restoration, and fire safety.
If you’re an owner evaluating:
- What your business is worth
- Which buyers would value it most
- Whether you should sell in 2025 or wait
- How to prepare now to maximize valuation
- How to avoid bad deal structures or retrades
We’re here to help.
Thinking About Selling in 2025–2027?
This is the moment to get clarity.
We will:
- Provide a free valuation
- Break down your adjusted EBITDA
- Show you current comps across HVAC platforms
- And tell you exactly who would buy your business today
If you’d like to speak directly, email me at:
At The Advisory, our mission is simple:
Defend Main Street. Protect founders. And help essential-service owners secure life-changing outcomes.
