We are sometimes asked, “What’s a great type of business to buy?”
One industry attracting a lot of interest from individual and Private Equity buyers is the HVAC (Heating/Ventilation/Air Conditioning) industry.
It makes perfect sense. This is an industry that has been largely unaffected by COVID-19. Someone looking to buy a business during this time – whether it’s a business in MA, RI, or NH – would do well to consider buying an HVAC business. Analytics has shown an increase of search terms such as “sell HVAC business” and this indicates it is also a great time for selling an HVAC business.
HVAC is an essential business. When people need an air conditioner installed or fixed because it’s hot outside, they call an HVAC company. Similarly, when the weather is cold and their heating system is having problems, it’s HVAC to the rescue. It’s not a decision the customer can put off.
It’s a largely recession-proof (and COVID-proof) business.
The companies within that industry which are in most demand are the ones whose model is to provide ongoing service and services contracts for an existing customer base, as opposed to those whose business comes from new construction installation. The difference can be seen in these two examples. An HVAC business which had annual sales of $12 million but earned its revenue almost exclusively in one-time, new construction work sold for $2 million on the market. And, a second HVAC business with annual revenues of between $4 and $5 million, and which draws most of its business from ongoing service for its customers, also sold for $2 million. HVAC Service businesses are in much higher demand and also sell much more quickly.
If you are looking to buy an HVAC company in RI, or to buy an HVAC business in MA, one question you will want to ask is where does the bulk of their revenue come from. The ideal mixture can be some new construction but a larger amount of repeat service business. This holds true for residential and commercial HVAC service providers.
And if you are the owner of an HVAC company and you are looking to sell an HVAC company in MA, NH, RI, or elsewhere, in addition to the individual buyers who may be out there in the marketplace, there are a number of private equity groups, larger companies and family offices looking for companies who have fared well during COVID. Don’t get lose valuable time searching general terms like “sell HVAC business”.
The HVAC model has stayed relatively stable even during these unusual times. As a result, buyers who may see fewer options on the market may take a stronger, more serious look at HVAC. Sellers will see strong multiples in the purchase price. Additionally, interest rates remain low, which is good news for both buyers and sellers in this market when it comes to financing.
If we can assist you in any way, please give us a call!
Contact Gary Rayberg at email@example.com or at 781 -682-6209. Ext 208.
ROI Corporation has sold 23 HVAC companies in NH, MA and RI over the last few years and is a leading authority on improving the value of HVAC companies prior to sale. ROI uses an exclusive marketing process to obtain the highest value for the seller of an HVAC company. Take the search on how to “Sell HVAC Business” to the next step, we’re here when you’re ready.
About ROI Corporation
ROI Corporation, based in the Boston market, has been involved in the sale of businesses and real estate in over 30 states since 1997. They also assist in the transfer of business ownership between generations and to key employees and management teams. ROI serves all of New England including MA, NH, RI, ME and CT with two divisions; a main street division serving smaller businesses as well as their middle market M&A division. Their Marietta, Georgia office, specializing in Service Distribution & Manufacturing Companies, serves the southeast United States. For more information, please visit us on the web at www.roimergers.com or call (781) 682-6209.