After a 2025 marked by caution — rising financing costs, residential market softness, and buyer-seller valuation gaps that killed deals at the letter-of-intent stage — HVAC mergers and acquisitions are picking back up in 2026. Easing macro conditions, renewed PE appetite, and the explosive demand for data centre cooling have combined to produce the most active start to an HVAC M&A year since 2022.

The Hardwire News has reviewed Capstone Partners' Q1 2026 HVAC sector update, combined it with our own deal tracking, and compiled the most comprehensive picture of where HVAC M&A stands as we move into Q2. Here is the full breakdown.

Q1 2026 Deal Highlights

The quarter's standout transactions span the full spectrum of HVAC M&A — from PE-backed thermal management technology deals at the high end to distributor acquisitions and franchise roll-ups at the operational level:

• Blackstone Energy Transition Partners acquired a majority stake in Advanced Cooling Technologies, a liquid cooling technology company for AI and data centre applications — the highest-profile deal of the quarter and a signal of where premium valuations are concentrating.

• SRS Distribution (Home Depot) agreed to acquire Mingledorff's, one of the most established HVAC distributors in the southeastern US, continuing its aggressive expansion into professional HVAC distribution.

• Winsupply completed the acquisition of Central Corp in February, adding another chapter to the distributor consolidation story.

• APR Supply Co. completed a major acquisition in February, extending the 104-year-old distributor's geographic reach.

• Roto-Rooter's corporate parent Chemed Corporation paid $20.6 million to acquire two franchise locations, demonstrating the franchise roll-up dynamic.

• American Residential Services engaged Rothschild and Co. to explore strategic options, positioning what could be one of the largest HVAC service platform transactions in history.

HVAC M&A activity accelerated in Q1 2026, with notable transactions spanning thermal management technology, HVAC distribution, franchise roll-ups, and service platform exploration — reflecting renewed PE appetite and strong strategic buyer interest in the sector.

Why Data Centers Are Driving HVAC M&A

The single most important theme in HVAC M&A in 2026 is the data centre and AI infrastructure cooling opportunity. The numbers behind the opportunity are not marginal — they are transformational for the HVAC industry.

Bloomberg Intelligence projects the six largest US hyperscalers will spend more than $593 billion in capital expenditure in 2026 — a 45% increase from 2025. The global data centre cooling market, valued at approximately $19.5 billion in 2025, is projected to reach $45.8 billion by 2033 at a compound annual growth rate of 17%. These are not modest growth rates. They represent the kind of secular demand shift that reshapes entire industries.

For HVAC M&A, the data centre theme is driving acquirers to pay premium valuations for companies with relevant technology, engineering capability, and established relationships with hyperscalers and data centre developers. The Blackstone deal is the most prominent example, but it is not an isolated event — it is the headline transaction in a category of deals that Capstone Partners describes as the most competitive segment of HVAC M&A in 2026.

Valuation Multiples: Still Above 10x EBITDA

HVAC M&A valuations have held up better than many observers expected given the residential market softness. Capstone Partners' analysis indicates that:

• Thermal management and liquid cooling technology companies are transacting at 12x to 16x EBITDA or higher, driven by the data centre demand narrative and strategic buyer competition.

• Residential HVAC service platforms with strong recurring revenue — measured by service agreement penetration above 25% of customers — are transacting at 8x to 12x EBITDA.

• Distribution businesses are attracting 6x to 10x EBITDA multiples, with the high end going to businesses with differentiated product access, proprietary brands, or geographic coverage in high-growth markets.

• Smaller residential contractors — under $10 million in revenue — are transacting at 4x to 7x EBITDA, with the wide range reflecting significant variation in recurring revenue, owner dependency, and market position.

Who's Buying, Who's Selling, and Who's Watching

The buyer landscape in HVAC M&A in 2026 is more diverse than it has been at any point in the past decade:

• Private equity remains the most active buyer class, particularly for service platforms and technology companies. Firms with existing home services portfolios are looking to add geographic coverage, and firms without home services exposure are evaluating initial platform acquisitions.

• Strategic acquirers — including Home Depot through SRS and potentially other retailers or technology companies — are more active than at any point in recent memory. The integration of professional services supply with direct service delivery is a strategic thesis that several large companies are exploring.

• Family offices and independent sponsors are active in the sub-$50 million deal market, acquiring smaller contractors and distributors that are too small for institutional PE but represent genuine value-creation opportunities with patient capital.

The seller landscape is similarly diverse: PE firms seeking exits after multi-year hold periods, family-owned distributors and contractors facing succession challenges, and founder-operated businesses that have built strong market positions but lack the capital or management depth to compete with platform operators.

What to Watch in Q2 2026

Several factors will shape HVAC M&A activity through the rest of 2026:

• The ARS sale process: If American Residential Services completes a transaction, it will set a market benchmark for large-scale HVAC service platform valuations and signal the health of the acquisition market for platforms of that size.

• Interest rate trajectory: Federal Reserve rate decisions will directly affect the cost of leveraged buyout financing. Lower rates improve deal economics for PE buyers and expand the universe of affordable acquisitions.

• Residential market recovery timing: As the residential HVAC market stabilises and begins recovering, the revenue trajectory of residential service platforms improves — making them more attractive to buyers focused on growth rather than value.

• Hyperscaler capex execution: If the $593 billion in projected hyperscaler spending in 2026 materialises as expected, the data centre cooling deal market will remain highly competitive and valuation-supportive through the year.

Frequently Asked Questions

Is HVAC M&A active in 2026?

Yes. After a slower 2025, HVAC M&A accelerated in Q1 2026 with notable transactions including Blackstone's acquisition of Advanced Cooling Technologies, SRS Distribution's acquisition of Mingledorff's, and the exploration of a sale process by American Residential Services.

What are HVAC company valuation multiples in 2026?

Thermal management technology companies are transacting at 12x to 16x EBITDA. Residential service platforms with strong recurring revenue are commanding 8x to 12x. Distribution businesses range from 6x to 10x. Smaller residential contractors typically transact at 4x to 7x EBITDA depending on recurring revenue and market position.

What is driving HVAC M&A in 2026?

The primary drivers are renewed PE appetite following macro improvement, strategic buyer activity from large companies building home services supply chains, and unprecedented demand for data centre and AI cooling technology that is attracting premium valuations to thermal management companies.

How do I sell my HVAC business in 2026?

Positioning an HVAC business for sale requires strong financial documentation, recurring revenue through service agreements, reduced owner dependency, and clean operational records. Working with an investment bank or M&A adviser experienced in home services transactions — such as Capstone Partners — is the most reliable path to achieving competitive valuations.