PE Investment Strategy and Valuation in HVAC

Private equity investors typically seek to buy 50-75% of an HVAC business to keep the owner motivated, with valuations ranging from six to eight times net profit for a $10 million business and 10-12 times for a $25 million business. The peak valuation period was in 2021.

“That is why they want to buy 50-75% of the business, rather than 100%. They want the HVAC contractor to be motivated to grow their end of the business.”

Signals are extracted from public coverage and print archives and pinned to a verbatim quote, presented as reported by their sources; naming a company in a signal is not an accusation against it. The verified mark denotes a high-confidence, corroborated signal. See our methodology and legal notes.