Plunder: how Private Equity is reshaping HVAC

The biggest story in the business of heat pumps might be the rapid pace of private equity consolidation. Over the past few years, investment firms have been sucking up HVAC contracting companies and merging them into large conglomerates.

For most homeowners, this has been largely invisible, as acquiring companies often retain the branding of companies that they buy. But it’s no secret to those in the industry.

For example, one of the largest private equity rollup of home services companies in the country is Sila, which combined over 30 separate brands under a single umbrella. The combined entity is worth over a billion dollars, and generates more than a hundred million dollars in annual revenue.

This isn’t an exception - these mergers are happening across contractors, distributors, software providers, and even equipment manufacturers. My friends at Homepros track this activity, and it’s a constant drumbeat of new deals.

For many owners of mid-sized HVAC businesses, a sale to private equity means financial independence.

Given this pattern of acquisitions, many are now starting new contracting businesses with the explicit goal of an eventual sale to private equity.

The acquisition is just the start. For some companies, not too much changes after the acquisition. In other cases, it means reduced independence and more bureaucracy. In the worst situations, it can mean poor working conditions for employees and reduced service quality for customers.

Private equity owned businesses are motivated to increase the bottom line, which can incentivize a heavily sales driven culture.

There have been examples of technicians upselling unnecessary repairs or system replacements, as this exposé highlights. The technician who tried to sell unnecessary repairs worked for an HVAC company owned by private equity.

Many in private equity appear to have genuinely good motivations. The founder of Alpine Investors, whose subsidiary Apex Service Partners has grown into one of the largest private equity plays in home services, writes:

Yet, accounts from technicians who work at Apex companies are a mixed bag.

To help me unpack such a complex topic, I reached out to one of the leading experts in the private equity industry. Brendan Ballou is a former federal prosecutor and author of Plunder, a deep dive into how private equity is reshaping industries across America.

It was a pleasure speaking with him on the latest issue of the Heat Pumped Podcast about private equity in HVAC and how we should think about these dynamics.

🎧 Listen to the full episode

It's available on YouTube or wherever you get your podcasts.

Key Takeaways

🏢 What private equity actually does

Private equity firms buy companies with mostly borrowed money, restructure them for short-term profits, and sell them a few years later — often leaving behind more debt, worse service, and bigger prices for customers.

🔗 HVAC roll-ups are happening

Private equity is rolling up small HVAC companies under big umbrella organizations. From the outside, it still looks like you're getting quotes from three different companies — but they might all be owned by the same firm.

That means:

• Less real competition

• More pressure to upsell and cross-sell services

• A race to maximize short-term cash flow, even at the cost of quality

💸 Short-term thinking drives bad decisions

Many private equity firms aren’t planning to stick around for 20 years — just long enough to pump up the numbers and sell. That’s why you’re seeing aggressive sales tactics, overloaded techs working 16-hour days, and a push for service plans and upsells.

🏚️ Asset stripping and debt loading

Beyond service quality, these deals often load acquired companies with debt or sell off their real estate in “sale-leaseback” deals — bleeding assets out of the business for quick cash.

🌎 Local wealth is disappearing

Historically, skilled trades let people build wealth locally — your town’s best technician could build a thriving business. With private equity rollups, profits are siphoned off to investors hundreds or thousands of miles away.

📉 What could happen next

We might not see mass bankruptcies, but we will likely see a long, slow decline in service quality, pricing fairness, and competition unless independent companies fight back.

🛡️ How customers (and contractors) can fight back

• Customers: Look up the companies you're considering. Google the name + “private equity” to check ownership.

• Technicians: Ask hard questions if your company is being bought. Understand the deal structure and push for clarity.

• Small businesses: Build long-term trust. Being the company that actually cares about customers could be your biggest competitive advantage.

If you want to better understand the forces reshaping HVAC — and how to protect yourself as a customer, technician, or business owner — this is an episode you don’t want to miss.

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If you like the episode, make sure to subscribe wherever you get your podcasts! And if you missed our past episodes be sure to check them out - Clay and Nate both brought unique perspectives on the industry.

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