HVAC Business Valuation: 2.5x–10x Multiples in 2026
If you own an HVAC company generating $5M to $50M in revenue, you are operating in one of the hottest M&A markets in the trades. Private equity firms have been aggressively acquiring HVAC businesses for the past decade, and 2026 is shaping up to be another record year for deal activity.
But what is your HVAC business actually worth? And how do buyers arrive at that number?
This guide breaks down how to value your HVAC company, what multiples buyers are paying, and what you can do now to position your business for a premium exit.
Navigate Your Exit with Confidence 🚀
Introducing the Exit Navigator
Whether you're 12 months or 12 weeks from exit, our Exit Navigator gives you a step-by-step roadmap to prepare, position, and sell your tech company at maximum value. Built for founders in the $5M–$20M revenue range, this free download includes:
A deal-readiness checklist
Tips for reducing diligence friction
Red-flag risk items buyers spot quickly
Valuation drivers by business model
A 6-phase roadmap from prep to post-close
Make your exit a strategy—not a scramble.
Book your free assessment call HERE or download our Million Dollar Exit Guide for FREE HERE
Why HVAC Businesses Are in Demand
HVAC companies sit at the intersection of several powerful market trends. Climate control is not optional. Homes and businesses need heating and cooling systems that work, and those systems require regular maintenance and eventual replacement.
Private equity has recognized the attractive economics of the HVAC industry. Platforms like Wrench Group, Apex Service Partners, and Hoffman Family of Companies have spent billions rolling up HVAC contractors to build regional and national footprints. According to ACHR News, PE-backed HVAC consolidators completed over 200 acquisitions in 2024 alone.
The demand is driven by several factors:
Essential service: HVAC is not discretionary. When systems fail, customers call immediately.
Recurring revenue potential: Maintenance agreements create predictable, high-margin revenue streams.
Aging housing stock: Millions of HVAC systems installed during the 2000s building boom are reaching end of life.
Regulatory tailwinds: Refrigerant phase-outs and efficiency standards drive replacement cycles.
Fragmented market: Thousands of local HVAC contractors create consolidation opportunities.
How Buyers Value HVAC Businesses
Most HVAC business valuations are based on a multiple of EBITDA (earnings before interest, taxes, depreciation, and amortization). EBITDA represents the cash flow available to a buyer after operating expenses but before financing and accounting adjustments.
For smaller, owner-operated HVAC companies, buyers may use SDE (Seller's Discretionary Earnings), which adds back the owner's salary and benefits to arrive at a more accurate picture of the economic benefit to a new owner.
According to industry transaction data, HVAC companies with strong service and maintenance bases are achieving some of the highest multiples in the home services sector. The key factors that determine where your company falls on this spectrum include:
Revenue mix: Companies with 50%+ of revenue from service and maintenance command higher multiples than installation-heavy businesses.
Maintenance agreements: A large base of recurring maintenance contracts significantly increases value.
Owner dependency: Companies where the owner is the primary salesperson or technician face valuation discounts.
Residential vs. commercial: Commercial HVAC typically commands higher multiples due to larger contract values and longer customer relationships.
Geographic footprint: Companies in high-growth markets or with regional density attract premiums.
A residential HVAC company with $400K in EBITDA and minimal maintenance agreements might sell for 3.5x to 4.5x, or $1.4M to $1.8M. A company with $1.5M in EBITDA, strong maintenance contract revenue, and professional management could command 6x to 8x, or $9M to $12M.
2026 EBITDA Multiples for HVAC Businesses
Based on recent transaction data and industry reports, here is what buyers are paying in 2026:
Source: Multiples based on HVAC industry transaction data from Generational Equity, PCE Investment Bankers, and announced platform acquisitions
The Maintenance Agreement Premium
In the HVAC industry, the quality and quantity of your maintenance agreements can dramatically impact your valuation. Buyers view maintenance contracts as the foundation for long-term customer relationships and predictable cash flow.
Here is why maintenance agreements matter so much:
Predictable revenue: Maintenance agreements create monthly or annual recurring revenue that buyers can forecast with confidence.
Higher margins: Service and maintenance work typically generates 50-60% gross margins compared to 25-35% on installation work.
Replacement pipeline: Maintenance customers become replacement sales opportunities when systems reach end of life. The lifetime value of a maintenance customer is 3-5x higher than a one-time service call customer.
Customer retention: Customers with maintenance agreements have significantly lower churn rates than customers without agreements.
A company with 2,000 maintenance agreements generating $400K in annual recurring revenue might see that revenue valued at 2x to 3x ($800K to $1.2M) in addition to the EBITDA multiple applied to the rest of the business.
The Valuation Drivers That Matter Most
Beyond EBITDA and maintenance agreements, sophisticated buyers evaluate several qualitative factors that can move your multiple up or down by 1-2 turns.
1. Revenue Mix (Service vs. Install)
Buyers prefer companies with a healthy balance of service, maintenance, and installation revenue. A 50/50 split is often ideal. Companies that are 80%+ installation-focused face discounts because installation revenue is less predictable and more competitive.
2. Technician Quality and Retention
Skilled HVAC technicians are hard to find and expensive to train. High technician turnover is a red flag because it indicates operational problems and creates integration risk. Document your team's tenure, certifications, and training programs.
3. Customer Acquisition Channels
Buyers want to understand how you get customers. Companies that rely heavily on the owner's personal relationships or a single lead source face more scrutiny than companies with diversified marketing channels.
4. Seasonality Management
HVAC is seasonal in most markets. Buyers look for companies that have found ways to smooth out seasonality through maintenance agreements, commercial work, or complementary services.
5. Systems and Processes
Professional buyers want to see that your business can run without you. Documented processes, modern field service software, and a trained management team all support higher valuations.
Common Valuation Mistakes to Avoid
Mistake 1: Overemphasizing Revenue
A $5M revenue HVAC company is not automatically worth more than a $3M revenue company. If the larger company has 8% EBITDA margins and the smaller company has 18% margins, the smaller company may be worth more.
Mistake 2: Ignoring Maintenance Agreement Value
Many HVAC owners view maintenance agreements as a necessary nuisance rather than a strategic asset. If you have not invested in growing your maintenance base, you are leaving significant value on the table.
Mistake 3: Owner Dependency
If you are still running service calls, handling all the sales, or managing every dispatch decision, your business has an owner dependency problem. Buyers will discount the purchase price to account for the risk that the business struggles without you.
Common Valuation Mistakes to Avoid
Mistake 1: Conflating Revenue with Value
A $5M revenue agency is not automatically worth more than a $3M revenue agency. If the $5M agency has 5% margins and the $3M agency has 25% margins, the smaller agency may actually be worth more.
Mistake 2: Ignoring Addbacks
Many agency owners understate their EBITDA by not properly identifying addbacks. Personal expenses run through the business, above-market owner salary, and one-time costs should all be added back to arrive at adjusted EBITDA.
Mistake 3: Waiting Too Long to Prepare
The best exits are planned 12-24 months in advance. Cleaning up financials, diversifying clients, and reducing owner dependency takes time. Starting the process too late limits your options.
How Deal Structure Affects Your Take-Home
A $5 million offer is not always $5 million in your bank account on closing day. In the HVAC industry, deals typically include some structure.
You should expect something like this:
65-75% Cash at Close: The guaranteed money.
10-20% Seller Note: A loan you give the buyer, paid back over 2-4 years with interest.
10-15% Earn-out: Tied to revenue retention or maintenance agreement retention in the first 12-24 months post-sale.
Earn-outs in HVAC deals are often tied to customer retention and technician retention. If key employees leave or maintenance agreements are not renewed, the earnout may be reduced.
Preparing for a 2026 Exit
If you are eyeing an exit in 2026, you cannot wait until the month you want to sell to start preparing. The market is active, but it favors the prepared.
To get the highest multiple, focus on three areas:
Grow your maintenance base. Every service call should include a maintenance agreement pitch. Set a goal to add 20-30% more agreements in the next 12 months. This is the single highest-ROI activity for increasing your valuation.
Reduce owner dependency. If you are involved in day-to-day operations, start delegating. Hire or promote a service manager, train a sales team, and implement systems that allow the business to run without your constant involvement.
Clean up your financials. Move to accrual accounting if you have not already. Clearly separate installation revenue from service revenue. Document your maintenance agreement count, renewal rates, and customer acquisition costs.
Selling an HVAC business is different from selling other trades. The recurring revenue potential from maintenance agreements creates unique valuation dynamics that reward owners who understand and optimize for them. By focusing on agreement growth, service margins, and operational independence, you can position your business not just to sell, but to exit at a premium.
Key Takeaways
EBITDA is the Foundation: HVAC businesses are valued on a multiple of EBITDA, typically ranging from 3x to 8x depending on size and quality.
Maintenance Agreements Matter: A strong maintenance contract base can add 2x to 3x its annual value to your total purchase price.
Service Beats Install: Companies with 50%+ service and maintenance revenue command higher multiples than installation-heavy businesses.
Reduce Owner Dependency: Building a management team and documented processes can add 1-2 turns to your multiple.
Expect Structure: Offers will likely include seller notes and earnouts, not just upfront cash.
Frequently Asked Questions (FAQs)
What multiple should I expect for my HVAC business?
Most HVAC companies trade between 3.5x to 7x EBITDA, depending on size, revenue mix, maintenance agreement base, and owner dependency. Platform-ready companies with scale can achieve 7x to 10x.
How do buyers value my maintenance agreements?
Maintenance agreement revenue is typically valued at 2x to 3x its annual recurring value, in addition to the EBITDA multiple applied to the rest of the business.
Do buyers value installation revenue the same as service revenue?
No. Service and maintenance revenue commands higher multiples than installation revenue because it is more predictable and has higher margins. Companies with 50%+ service revenue typically achieve multiples 1-2 turns higher.
What is the ideal revenue mix for an HVAC company?
Buyers typically prefer a 40-50% service/maintenance and 50-60% installation mix. This provides both predictable recurring revenue and growth opportunities from replacement sales.
How far in advance should I start preparing for an exit?
Ideally 12-24 months. That gives you time to grow your maintenance agreement base, reduce owner dependency, improve margins, and clean up financials before buyers start diligence. Start with your free Exit Audit with our Exit Advisory team here.
📥 Thinking about Selling Your Business?
Get access to The Complete Million Dollar Business Exit Guide (includes our Exit Checklist)—downloadable with one click and packed with tools, checklists, and insights.
Get the full guide for FREE HERE
Join an upcoming webinar!
Whether you’re looking to buy or sell an IT services company, join one of our upcoming events:
Come visit us!