How Private Equity Is Buying HVAC and What Smart Operators Are Doing About It

Keith Flores, known as HVAC God and M&A advisor to PE firms, has sat at every table in the industry. In this episode of TradeOps Radio, he breaks down who is buying HVAC companies, what multiples make sense at each revenue range, why most PE integrations fail the same way, and exactly how independent operators can out-brand, out-relationship, and out-retain firms with unlimited marketing budgets. The gap PE cannot close is local presence.

Private equity is not coming for HVAC. It is already here.

In February 2026, Blackstone announced it was acquiring Champions Group at a reported valuation of approximately $2.5 billion, at roughly 18.5 times EBITDA. That deal was the third HVAC, plumbing, and electrical platform advisory in twelve months for one of the firms handling the transaction. It was not an outlier. According to Capstone Partners’ M&A data, PE add-on acquisitions targeting HVAC service providers jumped roughly 88 percent year over year through mid-2025. There are now more than 27 active PE platforms acquiring HVAC businesses across the United States.

Keith Flores has been inside every part of this story. Known as HVAC God across social media, he started in the trades at 12 years old and bought his first house at 19. He has taken a $600,000 business to $20 million in two years, advised major PE firms on M&A deals, and now runs HG Home Services, a white-glove HVAC company serving high-value residential properties in Newport Beach, California. He is also the founder of Home Guardian, a hardware and software platform built to give contractors a retention edge and homeowners full transparency over their home’s mechanical health.

This post covers what he shared on TradeOps Radio: how PE is actually buying, what it consistently gets wrong, and what the operator who understands the game can do right now.

The $2.5 Billion Signal: What Is Actually Happening in HVAC Right Now

This is not a regional trend. It is a structural shift, and most operators are underestimating how far along it already is.

Champions Group was founded in 2000 as Service Champions. It now employs more than 2,400 people, serves roughly 150,000 active maintenance members, and operates under multiple local brand names across major metropolitan markets. That last detail matters more than the headline number. PE platforms are not rebranding the companies they acquire. They are leaving them under their original names while running them through shared back-office infrastructure. The company calling itself “Jeff’s Heating and Air” may be the same entity as the one calling itself “Keys Heating and Air” across town. Flores was direct about it: “They’re all different companies. But it’s still the same company.”

The scale of capital chasing this space is significant. The U.S. HVAC contractor market sits at $158.4 billion in 2025, with over 118,000 contractor establishments. That fragmentation is the specific opportunity PE is exploiting at scale, and it will continue because the runway is long. Most of the market is still made up of owner-operated businesses with no succession plan and no clear exit path.

At the time of recording, Flores described an imminent acquisition that would bring a single combined entity to $5 to $6 billion in annual HVAC revenue. His read on where this leads was plain: “At some point the federal government is going to have to come in and say, ‘Hey, this is a monopoly at this point.'”

What operators do in the next two to five years will determine which side of that shift they end up on.

What Keith Looks for When He Walks Into a Business

Most operators believe the opportunity in a stagnant business shows up in the financials first. Flores walks in through the warehouse.

He described one company as a clear example. The business had been operating for 35 years and was holding at $8 million in annual revenue. The owner attributed the plateau to market conditions. Flores walked into the warehouse and found thermostats from 25 years ago sitting on shelves under so much dust he could not read the labels. When he asked why they were still there, the answer was: “We might use them someday.” That moment told him everything, not about the parts, but about the culture that had been allowed to calcify.

“The rugs are dirty. There’s no personal information on their desk like pictures and that type stuff. Everybody just kind of goes there to work. There’s no culture.” These are the signals Flores reads before he opens a spreadsheet. A company that has stopped investing in itself, visually and culturally, has usually stopped growing for reasons the P&L does not fully capture.

His first move was not a marketing push. He contacted every major vendor until he found one willing to buy all the aging inventory, extend $700,000 in credit, and write a $200,000 rebranding fee in exchange for a single van photo with their logo on a magnet. That cash funded new trucks through Enterprise Fleet, wrapped and branded. The team got uniforms. The office was renovated. None of it came from operating cash. It came from understanding what leverage was already sitting unused in the business, and using it.

The Revenue Sweet Spots: When to Enter, When to Exit

The question most operators ask when a PE call comes in is the wrong one. They want to know what their business is worth today. The better question is: worth it to whom, at what stage, and what does that number look like with 18 more months of focused work.

Flores was specific about the tiers. Companies in the $2 to $5 million revenue range attract PE interest, but at compressed multiples, roughly 5 times EBITDA. The real opportunity for a growth partner is the $5 to $10 million range. At that level, a business is established enough to have real infrastructure but still has meaningful margin to grow. A company running 12 percent net profit in that tier can realistically reach 18 to 20 percent with the right operational discipline applied.

The exit sweet spot sits at $15 to $20 million. That range puts a business in territory where multiples climb to 8 to 10 times EBITDA, depending on how well the operation runs without the owner and how clean the books are.

“I took a $600,000 company to about 20 million in 2 years,” Flores said. That business had been running out of a garage for 30 years with no real visibility into who was doing what. The revenue growth was not the result of a marketing campaign. It was the result of applying real systems to a company that had been running entirely on heroics.

For operators who are not planning to exit, the calculation is different. Flores runs HG Home Services with 10 to 12 field technicians, no advertising spend, and 100 percent word-of-mouth revenue. The machine does not have to produce a transaction. It has to produce real cash flow, real durability, and a business worth owning.

What PE Gets Wrong Every Time

There is a pattern. Flores named it without hesitation, and it shows up consistently across PE integrations in the trades.

PE firms bring in their own management teams. The first move is nearly always the same: cut wages, reduce headcount, and replace people who know the business with people who know a spreadsheet. “They bring in all their young college frat guys to run these companies and tank them,” Flores said. “And then it’s like I told you so.”

The issue is not that PE firms lack intelligence. The issue is that they are applying a model built for a different kind of business. A home service company runs on the relationship between dispatcher and technician, between technician and homeowner, between a manager and the crew that has earned trust over years. That knowledge does not appear in a line item, and it does not transfer to someone who has never been in a 160-degree attic trying to get a job done before the homeowner arrives home.

Flores watched one firm spend $150 million on an acquisition, see the value decline to roughly $100 million, and then turn down a $200 million exit offer because accepting it would look like a loss. “We don’t lose,” they said. The business kept declining.

The opening for independent operators is structural. PE firms are managing hundreds of companies across dozens of markets. They cannot replicate what a 10-person shop does in a tight radius because they are not built to. Their advantage is capital and scale. The independent operator’s advantage is proximity, accountability, and the ability to make a real decision on the job without escalating it up the chain.

The Independent Operator's Unfair Advantage

The worst move a small HVAC operator can make right now is trying to compete with PE on PE’s terms. “You cannot compete with the private equity guys doing pay-per-click and all that,” Flores said. A PE platform with regional marketing resources can outspend any independent on paid search without noticing the budget. That arms race is not one you win by entering it.

The right move is to compete where PE cannot reach.

Flores built 50 percent of HG Home Services’ revenue through real estate agent relationships. The strategy is direct. When a home goes on the market, an HVAC inspection becomes a touchpoint with two clients at once: the seller and the incoming buyer. Real estate agents need trusted contractors they can refer without risking their own reputation. HG positioned itself as that contractor by building relationships before the agents ever had a need, not after.

“We probably get 50 percent of our business from the real estate leads. It’s insane.”

The second advantage is branding over advertising. Flores lines his trucks up on Pacific Coast Highway every morning so the same homeowners see them at the same time, every day. His team carries coloring books created with ChatGPT and drops them at local restaurants with a pack of crayons. Two weeks after one drop, a stranger recognized him at a restaurant from the coloring book. No ad platform produces that kind of memory in a market.

The principle is the same across both tactics. Presence is not purchased with a media budget. It is built through repetition and through the things only a local operator would think to do. “It’s not marketing. That’s branding. And that’s all that’s about.”

For operators building real, sustainable lead flow without competing on ad spend, lead generation built around local relationships compounds differently than paid campaigns. The independent operator who invests in local search visibility and a site built to convert real homeowner traffic is building an asset that keeps working. The operator trying to match PE budgets on Google Ads is renting attention at a price that will keep rising.

Three Things to Take From This Conversation

Know your revenue tier and build toward the right exit window. The entry range Flores recommends is $5 to $10 million in revenue, where margins still have room to improve. The exit window is $15 to $20 million, where the multiples become worth the work. Getting there requires clean books, real culture, and a business that does not stop running when the owner is not in the room.

Build relationships PE cannot replicate. Real estate agents and property managers are not channels PE firms are working at the local level. They are not structured to do it. That is the opening. Show up consistently in a tight radius and own the relationship before anyone else thinks to try.

Start thinking about retention infrastructure now. The operators who build systems that stay in a homeowner’s home and in a homeowner’s app will have a structural edge over companies that have to re-earn the relationship on every service call.

“Find yourself a mentor that’s been there. Grab a couple of them. Start surrounding yourself with where you want to be,” Flores said. The advice applies whether you are scaling toward an exit or building a business you never plan to sell.

Watch the full episode on TradeOps Radio. If you want to talk through how your operation is positioned against what is coming, book a free strategy call with the TradeOps team. And if you are not subscribed to TradeOps Radio yet, this is the episode to start with.