Residential HVAC Company
This target is a residential HVAC service and installation company operating in a warm-climate metro region with significant year-round demand for cooling and heating system repairs. The company has been in business for 14 years and focuses on servicing single-family homes, small multifamily buildings, and a limited number of light commercial accounts. It generates $2.8 million in annual revenue with adjusted EBITDA of approximately $510,000. With six full-time licensed HVAC technicians, three installers, and two office staff members, the business operates out of a 3,000 square foot leased facility and maintains a fleet of five wrapped service vans.
This type of business fits well within a buy-and-build model for residential trades, especially when service agreements, upsell potential, and technician route efficiency can be optimized. However, the business carries some structural risks that must be addressed in the acquisition: seasonality, licensing continuity, technician retention, and customer lead flow.
A viable acquisition structure using SBA 7(a) financing might include:
Purchase Price: $1.9 million (3.73x EBITDA)
SBA Loan: $1.425 million (75%)
Buyer Equity Injection: $190,000 (10%)
Seller Financing (Subordinated): $285,000 (15%), with clawback clause tied to technician retention and revenue seasonality tolerance
This type of transaction demands a thorough financial review adjusted for seasonal highs and lows. HVAC businesses typically spike in the summer and winter months, with spring and fall “shoulder” seasons often slower. Therefore, trailing twelve-month financials should be normalized to reflect year-over-year averages across seasons, rather than snapshotting a particularly hot or cold year. The SBA lender may request monthly financials for the prior two years to assess this stability.
The company services a base of 1,700 customers, of which 320 are on annual maintenance agreements. These service agreements (typically $179–$249/year) include spring and fall system tune-ups, discounted repairs, and priority scheduling. This recurring revenue is crucial for deal structuring. Buyers should look to increase maintenance plan enrollment to at least 20–25% of total customer base to smooth cash flow, reduce seasonality, and drive lead flow for replacements and upsells.
Licensing is state-regulated and tied to the presence of a licensed HVAC contractor on staff. If the buyer is not licensed personally, a qualifying agent agreement must be put in place. The seller is currently the licensed contractor of record and should be retained on a 6- to 12-month basis to provide license coverage while a replacement is secured or while the buyer completes licensing requirements.
Technicians are W-2 employees, EPA-certified, and trained to perform both service calls and new unit installations. Each technician is assigned a dedicated service area and van. Compensation is currently hourly, with no formal performance bonus.
Buyers should introduce a technician scorecard system post-close, tracking:
First-call fix rate
Customer satisfaction (via follow-up text surveys)
Average ticket value
Maintenance plan conversions
These metrics can support a performance bonus pool, improving technician engagement and profitability. Technician retention is a risk in this labor market; therefore, retention agreements should be executed with at least the top three techs. The seller note should include a 20% reduction clause if more than 30% of tech staff leave in the first 90 days.
All service jobs are scheduled via ServiceTitan, a robust field service management software with CRM, job costing, and route optimization. Calls are booked through the office, which manages dispatch and customer communication. The buyer should audit the ServiceTitan configuration to ensure accurate job costing, technician productivity tracking, and proper integration with accounting.
The lease on the facility is $4,200/month NNN with one year remaining and a 3-year renewal option. The space includes a service counter, parts inventory, warehouse space, and two small offices. The buyer should either negotiate an extension with the landlord prior to close or budget for possible relocation within 24 months.
Lead flow is driven by Google Ads (~$1,500/month), HomeAdvisor, Yelp, and a modest base of referrals. The business ranks top 5 in its zip code on Google for “AC repair” and “furnace installation.” There is no outbound sales team.
The buyer could improve growth by:
Hiring an outbound B2C sales rep to offer free second opinions or pitch maintenance plans door-to-door in existing service zones
Investing in SEO and review generation to boost Google Maps rankings in secondary zip codes
Adding IAQ (indoor air quality) services such as UV filters, duct cleaning, and humidity control systems
Targeting real estate transaction referrals through local realtors and inspectors who recommend HVAC assessments for buyers
Inventory management is basic. The company maintains $28,000 in average parts inventory, mainly consisting of motors, contactors, capacitors, and refrigerant. Major units (condensers, furnaces, package systems) are ordered just-in-time from distributors with whom the company has net-30 terms. Buyers should include working capital for at least $20,000 of operational inventory and review accounts payable aging to confirm no hidden liabilities.
Legal diligence must confirm all permits, licenses, and EPA refrigerant handling certifications. Insurance includes $2 million in general liability, $1 million in auto coverage, and a $1 million umbrella policy. Workers compensation is current and the business has not had a reportable injury claim in over five years.
Buyer profiles that fit this opportunity include:
Trades professionals (plumbing, electrical, general contracting) seeking to vertically integrate HVAC services
Investors with access to a licensed qualifying agent
Roll-up groups focused on residential trades in high-heat markets with route density
Key execution strategies include improving maintenance plan penetration, restructuring tech compensation, and reducing seasonality through bundled services and offseason promotions. If structured correctly with licensing coverage, team retention measures, and conservative financial normalization, this HVAC company can provide a highly bankable and defensible EBITDA stream with strong customer retention and room to scale through marketing and technician productivity.
