U.S. HVAC M&A Industry Update – Summer 2026

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The Heating, Ventilation and Air Conditioning (HVAC) sector remains highly attractive for M&A, supported by sustainable industry tailwinds and long-term demand dynamics. Overall, what stands out is that while deal appetite is intact, M&A processes are becoming increasingly selective and often successful outcomes hinge on the sellers’ ability to thoughtfully position the business in the market and articulate its expansion potential.

The PKF Investment Banking team has deep M&A experience advising business owners across the entire HVAC value chain and all major segments, including manufacturing, services and distribution. Two of our recently closed sell-side M&A mandates in the HVAC industry, the sale of Armistead Mechanical to PremiStar and Technical Air Systems to AIR Control Concepts, illustrate buyer interest across distinct areas of the HVAC market and the strategic value placed on established customer relationships, specialized capabilities and strong regional market positions.

Observations on M&A Deal Flow by Key HVAC Segment

Manufacturing – M&A in HVAC manufacturing has fared well despite macroeconomic uncertainty and rising input cost. The ongoing infrastructure build-out (e.g., data centers, residential housing, etc.) and the need for mission-critical thermal management solutions pave the way for steady M&A deal flow going forward.

While domestic and international strategic acquirers have historically taken the lion’s share of M&A in this segment, private equity-backed market players are aggressively pursuing inorganic growth as a means of diversifying into new end markets and complementing their existing product portfolio.

Overall, valuation multiples have remained robust – at times in the high-single digits or even north of 10x EBITDA – especially for those acquisition targets that have a track record of above average growth and margins and possess differentiated technological capabilities.

Distribution – The $50+ billion distribution market remains highly dispersed with very few competitors holding a national footprint and a universe of small- to medium-sized players with a hyper-localized network of branches servicing long-term relationships and catering to local contractors.

Market and industry dynamics have forged a barbell shaped competitive landscape encompassing sub-scale distributors and major distribution platforms. As a result, for strategic acquirers as well as private equity-backed portfolio companies, M&A represents an effective way to fill this much-needed industry void as they seek to expand their capabilities, strengthen market leadership and deepen geographic density.

Strong deal activity has also been registered in the broader original equipment manufacturer (OEM) manufacturer’s representative market with Blackstone-backed AIR Control Concepts and Intermediate Capital Group-owned Ambient diligently executing on their roll-up strategy.

Lastly, valuation multiples have been consistent with an average of 6x – 8x EBITDA and greater for businesses with critical scale and value-added capabilities.

Services – The surge in M&A deal flow observed in 2025 and persisting into 2026 was driven in part by the continued add-on appetite of large private equity-backed consolidators and new market entrants seeking to harvest the benefits of numerous structural tailwinds supporting long-term demand dynamics, including:

• Retrofit tailwinds – HVAC retrofit projects, building controls installations and upgrades are creating aftermarket opportunities while the phase-out of older refrigerants is generating major retrofit cycles.
  
  
• Recurring maintenance – A massive installed base of mission-critical HVAC commercial and industrial systems with finite lives is fueling the need for preventive maintenance and repair.
  
  
• Pervasive automation – The increasing automation of industrial activities is fostering the need for HVAC equipment that lowers the risk of product and system failure.

Further, a recurring M&A theme relates to the ongoing consolidation wave surrounding full-service mechanical and electrical contractors focused on HVAC, plumbing, controls and insulation work. Several large consolidators are looking to diversify their revenue streams by either entering new geographic territories or end markets or adding synergistic service capabilities across the value chain. Similarly, horizontal M&A expansion is also occurring into adjacent categories such as building controls and fire safety systems.

Overall, transaction multiples have remained elevated (i.e., north of 10x EBITDA), particularly those paid for high-revenue visibility and high-margin businesses with a large service component.

HVAC Services – Qualitative Valuation Guidepost | What Factors Drive Value?

Valuations in the HVAC services M&A sector remain idiosyncratic and buyer-specific – historically, investors have emphasized the following items:

• EBITDA size – In general, larger companies typically trade at higher valuation multiples.
  For HVAC services business, we observed the following EBITDA size cutoffs: <$3M; between $3M and $5M; between $5M and $10M; between $10M and 25M; and >$25M.
  
  
• Business mix – Predictable preventative service work, especially if contractually locked in over multiple years, is seen more favorably than lumpy project work.
  
  
• Geographic footprint – When determining where to expand geographically, acquirers consider a combination of population growth, tax regime, proximity to attractive Metropolitan Statistical Areas (MSAs), as well as the presence of commercial and industrial activities in specific end markets with education, healthcare, pharma, government, warehouse and data centers expected to trade at healthy multiples.
  
  
• Sourcing capabilities (direct-to-owner vs. general contractor relationships) – Direct-to-owner (DTO) reflects a direct relationship between the service business and the end customer, whereas general contractor (GC) projects are typically procured via a competitive bid process. DTO work includes recurring revenue from repair and maintenance contracts as well as replacement projects and is thus less susceptible to macroeconomic trends.
  
  
• Other aspects driving valuation considerations include:
  • Transaction structure (stock vs. asset)
  • Owner dependency
  • License-holder risk
  • Key man risk (essential customer and / or supplier relationships are tied to one person)

An illustrative, qualitative valuation framework based on our real-life deal experience is below:

The table above delineates how the strength of various attributes (listed on each row) impacts the company’s valuation across a potential EBITDA range – for example, a business mix largely based on project work may push the valuation multiple more toward the low-end of the contemplated range. To note is that each valuation driver may impact valuation considerations differently and would need to be assessed in the context of each potential acquirer’s strategic priorities, financial wherewithal and operational fit.

Select Recent HVAC M&A Transactions

Source: PitchBook and PKF Investment Banking
Note: Dollars in U.S. millions; the list of M&A transactions above relates to the period January – June 2026 only.

Select Public Company Data as of June 30, 2026 | Manufacturers, Distributors and Services

Source: CapIQ, PitchBook, PKF Investment Banking
Notes: Dollars in U.S. millions; *EV = Enterprise Value; LTM = Last Twelve Months; NMF = Non-Meaningful

Contact Us

The PKF Investment Banking team is available to discuss current M&A dynamics across all HVAC subsectors listed above and determine which opportunities may exist for your business. For more information, please contact:

Alberto Sinesi
Partner
PKF Investment Banking
asinesi@pkfib.com | 203.273.5024

Robert Murphy
Partner
PKF Investment Banking
rmurphy@pkfib.com | 201.788.6844

Mark Gianfalla
Vice President
PKF Investment Banking
mgianfalla@pkfib.com| 929 226.0398