The private-equity buying spree in HVAC may be approaching an important second act.

A review of the industry's consolidation wave found 27 private-equity-backed HVAC and plumbing platforms that either formed or changed hands between 2019 and 2021. 

That timing matters.

Private-equity investments are rarely intended to remain unchanged forever.

Many sponsors typically look toward another transaction after several years of growth.

The First Wave Was About Building Platforms

Over the past several years, private-equity firms have acquired established HVAC businesses and then used them as platforms for additional contractor acquisitions.

The basic strategy has been:

Buy a strong regional business.

Keep the local brand.

Acquire smaller contractors.

Centralize parts of the back office.

Expand geographically.

The result has been the creation of contractor organizations far larger than almost anything the residential HVAC industry had seen previously.

Now Some of Those Platforms Are Maturing

Companies backed during 2019–2021 are now well into their investment cycles.

That creates the possibility of:

  • Sales to larger private-equity funds
  • Continuation vehicles
  • Strategic acquisitions
  • Recapitalizations
  • New minority investments

The buyer may change even if the HVAC brands underneath the platform do not.

This Matters to Independent Contractors

Every major transaction establishes another reference point for HVAC business valuations.

Strong companies with:

  • Recurring maintenance revenue
  • Good margins
  • Strong management
  • Clean financial reporting
  • Multiple locations
  • Low owner dependence

remain particularly attractive acquisition targets.

HVAC Consolidation Is Not Over

The industry's thousands of independent contractors mean HVAC remains highly fragmented despite years of acquisitions.

That leaves plenty of room for additional consolidation.

The first private-equity wave created the platforms.

The next phase may involve who buys the platforms themselves.

For contractors, that means the M&A market could stay active even if the names of the buyers start changing.