Private Equity and HVAC: Why Buyer Demand for Home Services Companies Keeps Climbing

Blackstone just agreed to pay roughly $2.5 billion for Champions Group, a residential HVAC, plumbing, and electrical platform based in Orange County, California. The deal values the company at approximately 18.5 times EBITDA. A few months earlier, Goldman Sachs Alternatives acquired a majority stake in Sila Services from Morgan Stanley Capital Partners at a reported valuation of around $1.7 billion, with an implied multiple in the 17 to 20 times range depending on how you count pending add-ons.

These are not small bets. And they are not isolated. Private equity add-on activity in home services rose 88 percent year-over-year through mid-2025, and strategic buyers now account for roughly 80 percent of all HVAC service transactions. The question every contractor should be asking is not whether consolidation is happening. It is why the biggest buyers in the world are willing to pay these kinds of multiples for businesses that, on the surface, look like local trades companies.

The answer is in the data.

The McKinsey Framework: Why Home Services Commands Premium Multiples

McKinsey & Company published a framework that maps home service categories along two axes: how critical the service is and how frequently customers need it. The resulting quadrant tells you almost everything you need to know about where private equity capital is flowing.

HVAC sits in the top-right corner: critical and frequent. When your air conditioning fails in July or your furnace dies in January, you do not comparison shop for three weeks. You call someone, and you pay whatever it costs. On top of that, HVAC systems need regular maintenance, which creates frequent customer touchpoints and upsell opportunities that private equity firms prize above almost everything else. Plumbing and bathroom renovations fall in the same quadrant, along with pest control.

Electrical and roofing land in the critical-but-rare quadrant. These services are essential when needed, but the purchase frequency is lower. Painting, moving, and junk removal fall into optional categories with less defensible demand. The trades that combine urgency with repeat purchase behavior are the ones drawing the most aggressive bids.

The total addressable market across all home services categories is roughly $700 billion, and it remains highly fragmented. No single company owns more than a small fraction of any local market. For a firm like Blackstone managing hundreds of billions in assets, that fragmentation is not a problem. It is the opportunity.

Recession Resistance by Trade: The Data That Moves Capital

The second piece of McKinsey data that explains current buyer behavior is how each home service category performs during recessions, averaged across the last five economic downturns.

HVAC services grew by an average of 6 percent during recessions. Not held steady. Grew. Safety and security services grew 5 percent. Pest control grew 5 percent. Junk removal grew 10 percent. Electrical held flat at zero. These categories experienced no average decline at all during periods when GDP contracted by 3 percent.

Compare that to discretionary trades. Painting dropped 7 percent during recessions with an average decline lasting 3 years. Plumbing and bathroom renovations fell 9 percent over 3 years. House repair and renovations declined 5 percent. Moving collapsed 13 percent. Landscaping fell 3 percent with the longest average decline duration at 5 years.

This is the data that institutional investors study when deciding where to deploy capital. A business that grows during recessions, builds customer touchpoints through maintenance agreements that convert to replacement sales at 3-4x the rate of non-agreement customers, and serves a non-discretionary need is exactly the profile that justifies a premium multiple. It is also why you are seeing firms like Blackstone, Goldman Sachs, KKR, and others competing for the same platforms.

What Is Actually Driving the Multiples Higher

The headline multiples on megadeals like Champions and Sila, the 17 to 20 times EBITDA range, are not what most contractors would receive in a sale. Typical HVAC, plumbing, and electrical businesses trade between 5 and 11 times EBITDA depending on size, growth rate, and how well the business is built. But even those ranges have expanded significantly over the past several years.

Several factors are compressing timelines and pushing valuations up across the board.

A built-in customer base through membership programs. Champions Group has 150,000 active members. That kind of installed base provides multiple touchpoints per year and gives the buyer a built-in cross-sell engine for additional services. Contractors with active maintenance agreement programs consistently command higher valuations than those running purely on demand calls because every visit is another shot on goal for upsells and replacements.

Multi-trade capability. Both Champions and Sila operate across HVAC, plumbing, and electrical. A customer who signs up for an AC tune-up becomes a candidate for a water heater replacement and an electrical panel upgrade. Private equity firms value this because customer acquisition cost is the most expensive line item in home services marketing, and cross-selling amortizes that cost across multiple revenue streams.

Fragmentation creates runway. With hundreds of thousands of independent contractors across the country and no dominant national brand, acquirers see years of add-on acquisition potential. Blackstone is not buying Champions to run it as-is. They are buying a platform to bolt on dozens of additional local operators over the next five to seven years.

Technician scale. Champions has over 1,800 field technicians. Sila operates 30-plus brands across the Northeast, Midwest, and Mid-Atlantic. At this scale, the businesses can negotiate better supply house pricing, centralize back-office operations, and deploy technology across a larger base, all of which improve margins after acquisition.

What This Means If You Own a Home Services Business

If you own an HVAC, plumbing, electrical, or multi-trade home services business doing $3 million or more in revenue, the current environment is the most favorable seller’s market the industry has ever seen. But favorable does not mean automatic.

The contractors getting premium valuations share a few things in common. They have clean financials, ideally on accrual basis with job-level profitability tracking. They have a real management layer, meaning the business does not collapse if the owner stops answering the phone. They have documented processes, whether that is a pricebook, a dispatching system, or SOPs for their techs. And they have a customer base they touch multiple times per year through maintenance agreements or membership programs, which drives higher lifetime value per customer.

The contractors who struggle to attract buyers, even in this market, are the ones running everything through a personal bank account, have no financial visibility below the top line, and would leave the acquirer with nothing but a truck fleet and a customer list if they walked away.

The gap between a 5x and an 11x multiple often comes down to these operational fundamentals, not the size of the revenue number. And for businesses positioned between a platform acquisition and a tuck-in, the difference can be millions of dollars in exit value. For a deeper look, see our guide on the PE operational playbook for home services.

The Bigger Picture

The Blackstone and Goldman Sachs deals are not anomalies. They are signals. When the largest alternative asset managers in the world deploy billions into residential HVAC, plumbing, and electrical, it validates what the McKinsey data already shows: home services is a $700 billion market that is critical, recurring, and recession-resistant. The capital is not coming because these firms are guessing. It is coming because the data supports it.

For contractors, the implication is straightforward. The buyers are here. The multiples are real. But the window favors businesses that are built to transfer, not just built to run.

This is not abstract. We have worked with home services clients where identifying and eliminating $250,000 per month in cost inefficiencies — across fleet, labor, vendor contracts, and G&A — created $3 million per year in EBITDA improvement. At the 11x multiple a business of that size commands, that is roughly $30 million in additional enterprise value from a single fractional CFO engagement. In another case, we helped a client move EBITDA from $500,000 to $1 million in one year through margin and growth improvements — creating $2.5 million to $4 million in value at current market multiples. These are the kinds of returns that PE buyers are building into their models when they acquire home services platforms. See what your business could be worth →

Find Out Where You Stand

If you have been thinking about what your company is worth, whether you are considering an exit in the next few years or just want to understand how buyers would evaluate your business today, we can help you get a clear picture.

At Profitability Partners, we work exclusively with home services companies on the financial and operational side of the business. That means building the kind of financial infrastructure, job costing visibility, and reporting that directly drives valuation, whether you are preparing for a sale, fielding inbound interest, or just want to run a tighter operation.

Book a free consultation and we will walk through your numbers, identify the gaps that would cost you at the negotiating table, and give you a realistic view of where your business stands in today’s market.

Go deeper: Read our cornerstone guides on how to sell your home services business and understanding private equity in home services.

Related: HVAC company valuation | HVAC profit margins

About the Author

Raymond Gong

Raymond Gong is the founder and managing partner of Profitability Partners, a fractional CFO and bookkeeping firm serving small to mid-sized businesses nationwide. With expertise spanning financial reporting, cash flow management, tax planning, and ServiceTitan accounting integration, Raymond helps home services companies, startups, and growing businesses build the financial infrastructure they need to scale confidently. He specializes in translating complex financial data into clear, actionable insights — so owners can make smarter decisions about growth, profitability, and exit planning. Based in Tampa, FL, Raymond works with clients across HVAC, plumbing, electrical, and roofing to optimize their books, streamline reporting, and prepare for what's next.

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Raymond Gong

Raymond Gong is the founder and managing partner of Profitability Partners, a fractional CFO and bookkeeping firm serving small to mid-sized businesses nationwide. With expertise spanning financial reporting, cash flow management, tax planning, and ServiceTitan accounting integration, Raymond helps home services companies, startups, and growing businesses build the financial infrastructure they need to scale confidently. He specializes in translating complex financial data into clear, actionable insights — so owners can make smarter decisions about growth, profitability, and exit planning. Based in Tampa, FL, Raymond works with clients across HVAC, plumbing, electrical, and roofing to optimize their books, streamline reporting, and prepare for what's next.