Multi-Territory Residential HVAC Business
This article details a forward-looking acquisition strategy for a well-established residential heating, ventilation, and air conditioning (HVAC) company with operations spanning multiple suburban territories in a high-growth Sunbelt region. For over 25 years, the business has offered full-service HVAC installation, repair, and maintenance for homeowners, property managers, and small-scale commercial clients. It has become known for its reliability, fast turnaround times, and highly rated customer service.
The company generates $7.2 million in annual revenue with $1.35 million in adjusted EBITDA. Approximately 55% of revenue is generated through equipment installation (split systems, ductless mini-splits, and air handlers), 30% from service calls and repairs, and 15% from preventative maintenance agreements (PMAs), which are structured as recurring annual or semi-annual checkups. The company is staffed by 18 licensed technicians and supported by a team of dispatchers, sales consultants, and warehouse personnel.
This business is ideal for SBA 7(a) financing due to its strong cash flow, asset-backed service infrastructure, minimal customer concentration, and ample post-acquisition expansion potential. Strategic opportunities include upselling PMAs, layering in plumbing or electrical service offerings, and pursuing acquisitions of smaller HVAC shops in surrounding zip codes.
Proposed SBA 7(a) Deal Structure
Given its size, consistent EBITDA, and equipment-heavy operation, the acquisition can support an SBA senior loan with a supporting equipment financing stack:
Purchase Price: $5.4 million (4.0x EBITDA)
SBA Loan: $4.05 million (75%)
Buyer Equity Injection: $540,000 (10%)
Seller Financing (Subordinated): $810,000 (15%), amortized over 6 years with 12-month interest-only
Performance protections and incentives:
20% clawback on seller note if more than 10% of PMA customers cancel within 180 days
Bonus payable if buyer increases PMA revenue by $250K+ in first year
Seller to remain as licensed qualifier (if needed) and sales advisor for 9 months
Client Base and Revenue Streams
Customer breakdown:
Residential homeowners (single family, townhomes): 82%
Multi-family properties (rental managers, HOA contracts): 12%
Small commercial properties (retail, dental offices, salons): 6%
Revenue categories:
Installations (new systems and replacements): $3.96M (55%)
Repairs and emergency service calls: $2.16M (30%)
Preventative maintenance agreements (PMAs): $1.08M (15%)
Install jobs range from $6,500–$18,000 and typically include system rebates and optional upgrades (zoning, filtration, smart thermostats). Service calls are triaged via phone and dispatched via ServiceTitan. PMAs are priced at $180–$350 annually, with add-ons for filters and indoor air quality testing.
The business has over 2,000 active PMA customers, all on auto-renewal billing. No customer represents more than 1.2% of revenue. Top 50 clients account for less than 25% of annual revenue.
Staffing and Field Operations
Field personnel:
12 installation techs (organized into 6 crews)
6 service techs (licensed and EPA certified)
2 PMA-only maintenance techs
Office and support:
2 dispatchers
2 inside sales/estimators
1 warehouse manager
1 GM
The company uses ServiceTitan to manage scheduling, invoicing, CRM, technician dashboards, and quote conversion tracking.
Technicians are paid hourly with incentive bonuses for upsells, efficiency, and 5-star reviews. They are EPA 608-certified and receive ongoing factory training on major OEM systems (Carrier, Lennox, Trane, Daikin).
Post-close workforce retention plan:
$2,500 retention bonuses at 6 and 12 months for all lead techs
Implement career ladders with higher pay for NATE certifications
Create new field trainer role to support new hire onboarding and field troubleshooting
Facilities, Fleet, and CapEx
The business leases two warehouses across its territory, one per service zone:
HQ: 5,200 sq ft (inventory, dispatch, offices)
South Facility: 3,800 sq ft (install base, overflow)
Lease terms:
HQ: $6,300/month (NNN), 4 years remaining
South: $3,900/month, month-to-month with purchase option
Fleet:
14 service vans (FMV ~$560K, mostly owned)
1 box truck
2 install trailers
CapEx forecast:
Replace 4 vans over 24 months: $120K (lease optional)
Upgrade ServiceTitan with VOIP integration: $12K
Warehouse racking and HVAC equipment lift: $7K
Sales and Marketing System
Lead sources:
Google Ads (split geo-targeted by zone)
Website with online scheduler and estimate tool
HomeAdvisor Pro
SEO via blog content (IAQ, duct efficiency, thermostat tips)
Referral program ($100 cash + service credit)
Marketing spend: ~$9,000/month
Post-close marketing initiatives:
Create tiered PMA plans with add-ons like IAQ testing, coil cleaning, and duct fogging
Launch “Buy Back” program targeting 8–10-year-old systems with rebates
Partner with solar companies to co-market to energy-conscious homeowners
Acquire smaller competitors with 300–600 clients and fold into route
Financial Summary
Revenue: $7.2M
COGS (labor, equipment, parts): $4.04M
Gross Profit: $3.16M
SG&A: $1.81M
Adjusted EBITDA: $1.35M (18.7%)
Gross margin breakdown:
Installs: 36–42% (depending on brand, warranty, install complexity)
Repairs: 55–60%
PMAs: 68–72% (highest margin revenue)
Accounts receivable averages 10–14 days, with retail financing for installs handled through third-party lenders (Synchrony, Greensky). No significant aging AR.
Legal and Risk Considerations
State mechanical and contractor licenses current and transferrable
$2M GL, $1M auto, $1M umbrella, $1M workers comp
All field personnel background-checked and compliant with EPA certifications
No open OSHA complaints or litigation history
Buyer should verify qualifier status for licensing purposes or arrange for transitional use of seller's license if buyer is not yet licensed.
Working Capital and Transition Needs
Payroll float: $145K
Van replacements: $60K–$80K
PMA upsell materials and CRM updates: $10K–$15K
Seller consulting and licensing support: $40K
Sales commissions for install closeouts: $25K
Ideal Buyer Profiles
Mechanical service operators expanding into HVAC
Private equity-backed roll-ups with route and service business focus
Trades entrepreneurs with electrical or plumbing experience seeking add-on vertical
Franchise platform developers using PMA base to scale recurring revenue
Post-Close Execution Plan
Meet all PMA clients through welcome email campaign and field touchpoints
Reorganize install crews to reduce travel and improve revenue/tech/day
Launch Tier 2 PMA plan with duct testing, IAQ, and filter replacement
Implement CRM tags for 5+ year old systems and trigger replacement marketing
Begin scouting for nearby tuck-in HVAC operators for roll-up
Conclusion
This HVAC business offers a high-performing, cash-flowing platform with diversified revenue streams and substantial recurring PMA income. SBA 7(a) financing allows acquisition at a modest capital outlay while retaining ample cash reserves for tech retention, marketing, and growth initiatives. With strong operational systems, long-standing reputation, and minimal customer concentration, this company is ready for a buyer seeking durable service revenue and expansion potential across multiple high-demand territories.
