HVAC Add-On Deals Rose 88% in a Single Year. Here Is What the Data Shows.

Updated October 7, 2026

By Darren Padgett, Jr. • April 7, 2026 • 8 min read

Through the first half of 2025, private equity firms completed 32 add-on acquisitions in HVAC: up 88% from just 17 in the same period the prior year.

That's not a rounding error. That's a structural shift, confirmed by S&P Global Market Intelligence's analysis of HVAC M&A activity.

And it's not slowing down. Capstone Partners tracked 149 total HVAC transactions in full-year 2025: a 12.9% increase over the prior year. More than 50% of the 77 HVAC deals tracked through June 2025 were PE-backed.

Private equity has decisively taken over your industry. Here's why and what it means for you.

What does the 88% increase in add-on deals tell me?

The increase reflects platforms buying smaller operators as part of their existing acquisition strategies. The reporting below ties that activity to capital deployment and the buy-and-build approach, rather than a single large deal.

When people see a number like 88%, they assume it's an outlier: a spike that corrects itself. This one won't.

The 88% surge in PE add-on activity isn't the result of a single mega-deal or a momentary trend. It reflects a systematic execution of the buy-and-build playbook across dozens of platforms simultaneously. Platform firms that raised capital in 2021–2023 have hit their deployment windows. They need to buy. They have the money. And your market has the targets.

S&P Global's reporting made this explicit: megadeals get the headlines, but add-on deals are what actually power middle-market PE returns. And right now, add-ons in HVAC are the engine running hardest.

There are roughly 114,000 HVAC businesses operating in the United States, the vast majority family-owned and generating under $10 million in annual revenue. That's an enormous pool of acquisition targets. PE has barely scratched the surface.

Why do buyers combine smaller HVAC businesses into a larger group?

The strategy is to acquire individual businesses and eventually sell them as part of a larger platform. The example below explains the difference between the purchase and exit multiples that motivates this approach.

To understand the reported pace of HVAC add-on acquisitions, it helps to understand multiple arbitrage.

Here's how it works in practice.

A PE firm buys a strong regional operator, the platform, at 6x to 7x EBITDA, per The Alignment Firm's breakdown of PE trades consolidation. Then they begin acquiring smaller local operators, the add-ons, at just 3x to 4x EBITDA. Once the combined platform hits sufficient scale (typically $100M+ in revenue), they sell the entire entity to a larger fund at 12x to 15x EBITDA.

The arbitrage is in the gap. A $1 million EBITDA add-on bought at 3.5x costs $3.5 million. When the platform exits at 13x, that same $1 million of EBITDA is worth $13 million. That's $9.5 million of value created, not from operational improvements, but purely from the multiple expansion that comes with scale.

This is why PE firms love the trades. As Alberto Sinesi, a director at PKF Investment Banking, told S&P Global: "Private equity firms love situations where they can buy a cornerstone company, a platform, and then build around that platform."

The add-on isn't just an acquisition. It's a math problem with a known answer.

What would make my HVAC business an add-on target?

Buyers look for recurring work, clean financials and a business that can operate without the owner. They also consider whether the location and team fit their existing operations.

Not every HVAC or trades business gets a call from a PE-backed platform. Buyers often use a specific profile, which is useful to understand whether you want to sell or remain independent.

The baseline criteria, according to Exit Lab HVAC's analysis:

• Revenue: At least $2M–$5M in annual revenue, though many platforms target higher
• EBITDA margins: 15% or better
• Recurring revenue: 30–40% from service contracts and maintenance agreements
• Customer concentration: No single customer exceeding 30% of revenue
• Owner independence: Business can operate without the owner for 30 days
• Financial cleanliness: Reviewed or audited financials, accurate EBITDA, detailed customer data

Beyond the numbers, platforms are also looking for geographic density. They want add-ons within 50 miles of existing operations to slash truck time and drive logistical efficiency. They want businesses with scalable operations, documented processes, and a management layer that doesn't revolve around the founder.

Eliot Kerlin Jr., managing partner at Broadwing Capital Management, summarized the origin story of many targets: "A lot of these companies started as family-owned or founder-owned businesses with a truck or a couple of trucks and grew from there." That founder-owned profile is common in the industry and often appears in buyer criteria.

Which platforms are buying HVAC and trades businesses?

Orion Group, Sila Heating & Air Conditioning and FirstCall Mechanical are examples named in the reporting below. Each has completed repeated acquisitions with private equity backing.

This isn't abstract. There are specific PE-backed platforms actively acquiring in the HVAC and trades space right now. And they're moving fast.

Orion Group (backed by Alpine Investors) has completed over 35 acquisitions since November 2020. They're one of the most aggressive buyers in the residential trades space.

Sila Heating & Air Conditioning (backed by Morgan Stanley Capital Partners) has done 28 acquisitions since May 2021. They have significant capital and a clear geographic expansion strategy.

FirstCall Mechanical (backed by SkyKnight Capital) has completed 15 acquisitions since January 2022. Smaller but still a meaningful player in targeted markets.

These aren't hypothetical buyers. They have mandates from their limited partners to deploy capital. They have deal teams whose entire job is to find and close on businesses like yours. If your market has any of these platforms nearby, they are either already talking to your competitors or will be soon.

Have tariffs stopped private equity from buying HVAC businesses?

The reporting cited below says tariffs have not prevented these acquisitions. Buyers continue to point to domestic service demand, stable customers and recurring work.

Every time there's economic turbulence, some owners assume M&A activity will cool. In the trades, that assumption is wrong.

S&P Global's reporting addressed tariff concerns directly. Alberto Sinesi at PKF Investment Banking was clear: "Tariffs have not really prevented private equity firms from making acquisitions."

Your labor is domestic. Your service calls are domestic. Your customer base isn't going anywhere. The demand drivers, aging housing stock, non-discretionary repair needs, climate volatility, don't respond to trade policy.

Pete Witte, global private equity lead analyst at EY, put it bluntly: "Anything to do with the trades, where you've got stable customer bases, long-term visibility into the outlook for the business, strong recurring revenues. It just lends itself to that kind of activity."

The global HVAC market was worth $310.6 billion in 2024, with the U.S. accounting for $88.9 billion of that total. That market does not contract because of tariffs. It grows.

What choices do I have as an independent HVAC owner?

You can prepare for an acquisition, pursue a platform or roll-up partnership, or remain independent. Each choice requires a clear view of your operations and the resources you would need.

If you're an independent operator, this wave presents a genuine fork in the road. And most owners I talk to haven't yet processed which path they're actually on.

Path 1: You become an acquisition target. You optimize your business, recurring revenue, clean books, owner-independent operations, and you let a PE-backed platform pay you a premium multiple for what you've built. You either cash out or roll equity and ride the exit. This is a real, achievable outcome for owners who move with urgency.

Path 2: You become a platform or roll-up partner. You're not selling. You're buying. You partner with growth capital to execute your own acquisition strategy in your market. You're the one making the calls, not receiving them. This is for owners who want to scale and have the operational foundation to support it.

Path 3: You remain independent. PE-backed competitors may enter your market with more resources. Independent operators can respond by improving their systems, customer relationships, employee proposition, and financial visibility.

The good news: most owners have more runway than they think. But the window to choose your path deliberately, rather than having circumstances choose for you, is finite.

What should I get in order before speaking to a buyer?

Review recurring revenue, financial records, operating systems and the decisions that still depend on you. Address the gaps before asking a buyer or capital partner to rely on those records.

The difference between a 4x exit and a 10x exit often comes down to preparation that started 12–24 months before any deal. CFOx Advisory's 2026 M&A Outlook is direct: quality assets see multiple expansion while lower-quality assets get discounted. The K-shaped valuation split is real.

The businesses that attract premium offers, or that successfully raise growth capital, share a common profile:

Recurring revenue is king. Memberships and service contracts aren't just good business. They're the single biggest driver of valuation. Top-quartile firms have membership-driven revenue accounting for nearly 28% of total revenue. Below 15% recurring revenue is considered high-volatility by PE buyers.

Your tech stack matters more than you think. The primary differentiator between a 7x and a 12x business, per CFOx Advisory, is operational and technological sophistication. A modern CRM, dispatch software, and financial reporting infrastructure signal a scalable business.

Owner dependency affects deal risk. If the shop struggles when you are not there, a buyer may treat that as risk. Build the management layer before you need it.

Get your financials clean now. Reviewed or audited financials, accurate EBITDA, and clean customer data are table stakes. PE buyers have seen too many owner-reported numbers that don't survive diligence.

If you're not sure where your business stands on any of these dimensions, that's the first problem to solve. Our Scale Roadmap at NCKTR gives you a framework for building toward institutional-grade positioning. And how we work with trades owners is detailed on our how-it-works page.

What should I take away from the rise in add-on deals?

Treat the buying activity as a reason to understand your options, not as a reason to rush into a sale. Your starting point is the evidence about how your own business runs.

The 88% surge in PE add-on deals isn't a market anomaly. It's the middle of a consolidation wave that will reshape your industry over the next 36 months. The operators who come out ahead are the ones who treat this moment as a strategic inflection point, not just a news story.

What else should I know?

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