Transaction Advisory

Global HVAC in general, from commercial and residential services to equipment and system manufacturing, remains a large, durable market, estimated in excess of $350 billion in 2025, with mid-single-digit CAGR through the next decade.

More specifically, PE firms remain the dominant buyers of residential HVAC service platforms, executing buy-and-build rollups across various regions in the U.S. Large growth/mega-cap PE and alternative-asset groups (Goldman Sachs Alternatives, General Atlantic, L Catterton, Gryphon, Gamut and various others) are buying sizeable regional platforms, while middle-market PE and strategic consolidators focus on tuck-ins and regional density.

Essential, recurring and locally fragmented, residential/commercial service platforms continue to trade actively. A notable example: Sila Services’ sale from Morgan Stanley’s PE arm to Goldman Sachs Alternatives, reportedly at ~$1.5billion including debt in early 2025. These trends have been strong for the last five plus years and continue into Q4 2025 and 2026, primarily due to the focus on recurring revenue via annual/periodic maintenance plans, low capital intensity, multitrade bundles (HVAC + plumbing + electrical) and technology-enabled service ops. 

• Companies with maintenance plans, membership programs and consistent seasonal service cycles provide investors with predictable revenue and EBITDA, along with a strong base on which to further build and grow.
• The multitrade capabilities keep customers with one family of companies and allow for cross-selling opportunities.
• Large platforms, such as Sila Services and Apex Services Partners (an active Alpine Investors platform), have completed numerous add-ons and created well-oiled corporate development and integration processes and protocols allowing for swift and efficient M&A processes.
• Platforms are also now focusing on businesses with upgraded dispatch, mobile invoicing and various modern diagnostic tools that improve productivity, margins and scalability, which is more attractive to investors.

Deal valuation remains at a premium with PE buyers paying double digit multiples for high quality platforms (mid-teens Enterprise Value/EBITDA), especially those with significant recurring revenue. From an add-on perspective, many of the smaller tuck-ins, which in many cases are single-digit EBITDA family/founder owned businesses, are trading for multiples generally ranging from three to eight times and in some instances more, to the extent they are larger professionalized companies. Founders who have run these smaller regional residential HVAC businesses for decades are educating themselves on the current M&A boom in residential HVAC services. They are retaining advisors and seeking M&A, knowing that a significant liquidation event may be in their futures, while many often remain with the company to run the business and retain equity. Earnouts and performance-based consideration are often built into the purchase agreement terms.

Diligence considerations and processes also continue to be rigorous, especially with sophisticated PE platform buyers, where advisors are being retained for various workstreams, including but not limited to financial, tax, employee/HR and benefits, and insurance diligence, among others, as necessary. Buyers will deep dive into the target’s labor model, technician productivity, customer churn and retention, recurring revenue breakdown and integration.

Overall HVAC Industry Outlook: Through 2026, the industry expects active add-ons by PE-backed service platforms, continued trimming of non-core assets by global OEMs (e.g., Carrier’s sale of its fire/security businesses) and fast deal flow in controls/AI and mission-critical cooling. HVAC equipment distribution roll-ups are expected to remain steady as strategics seek to increase market share in growth geographies. With secular tailwinds (electrification, refrigerant transition, AI compute), the sector’s M&A engine appears to be poised for continued activity, even if multiples stay selective and buyer due diligence is rigorous. Further, the residential HVAC M&A outlook is that it may be about halfway through the broader consolidation cycle, but commercial HVAC services have a longer runway, which we will see as we get into 2026.