Rollup Strategies in Construction & Home Services: Smart Growth or Risky Business?
- Tawni Nguyen
- Mar 8, 2025
- 3 min read
Mergers and acquisitions (M&A) in the construction and home services sectors have skyrocketed, with rollup strategies leading the charge.
If you own a construction or home services business, you’re either buying, selling, or getting squeezed out.
Private equity firms and industry giants are snatching up HVAC, plumbing, and electrical businesses, rolling them into multi-state operations overnight.
What used to be a local, family-run business is now part of a billion-dollar machine.
Sounds like a massive opportunity, right?
Or is it a trap?
Let’s get into real data, industry trends, and actual rollup deals to understand whether this strategy is a golden ticket to growth or a financial landmine.
Why Construction & Home Services Are a Hot Target for M&A
📈 2024 construction spending in the U.S. rose by 6.6% year-over-year as of November, fueling record-level M&A activity. (U.S. Census Bureau)
📈 Analysts project a 10% increase in total U.S. M&A deal volume in 2025, on top of a 13% jump in 2024. (PitchBook)
The biggest catalyst? Industry fragmentation.
There are over 1.2 million construction and home services businesses in the U.S.
Most are small, family-owned operations, making them prime targets for consolidation.
Why Private Equity & Big Companies Are Rolling Up Home Services Businesses
Think like a buyer for a second.
Why would someone want to buy a scattered group of independent plumbing, HVAC, and electrical companies instead of building one from scratch?
✅ Predictable Cash Flow – Home services have recurring revenue from maintenance contracts.
✅ Built-In Labor Force – Instead of recruiting, buyers acquire skilled workers in a labor-strapped market.
✅ Cost-Cutting Potential – Bulk purchasing, shared back-office functions, and vendor discounts slash expenses.
✅ Fast ROI – Investors roll up multiple small companies, cut inefficiencies, then sell at a premium.
The biggest players know this game, and they’re playing it at scale.
Real Rollup Deals Happening Right Now
🔹 Quikrete’s $11.5B Acquisition of Summit Materials → One of the largest rollup deals in construction materials, creating a vertically integrated powerhouse in cement and aggregates. (MarketWatch)
🔹 EMCOR Group’s $865M Purchase of Miller Electric Co. → Expanding EMCOR’s footprint across the southeastern U.S., strengthening its commercial electrical contracting business. (CTInsider)
🔹 Sekisui House’s Expansion in the U.S. → This Japanese homebuilding giant acquired five major homebuilders (MDC Holdings, Woodside Homes, Holt Homes, Chesmar Homes, Hubble Homes) and now controls 15,000 new home builds annually across 16 states. (NY Post)
Private Equity Buying Up HVAC & Plumbing Businesses → PE firms aren’t just flipping houses—they’re rolling up home services companies at an alarming rate. (Wall Street Journal)
Why Rollups Can Be a Trap for Business Owners
Rollups sound great on paper—until you’re the business getting bought.
Many business owners think selling is their exit strategy, only to find themselves locked into:
❌ Multi-year earnouts where they still have to run the company post-sale.
❌ Aggressive cost-cutting that guts their team, service quality, and local reputation.
❌ Equity deals that don’t pan out, leaving them with less cash than they expected.
Rollups make investors rich—but do they make YOU rich?
If you’re thinking about selling, here’s what to watch out for...
How to Protect Yourself in a Rollup Deal
1️⃣ Know Your Worth Before They Tell You What You’re Worth
Get a third-party valuation before talking to buyers.
Understand what EBITDA multiples businesses like yours are selling for.
2️⃣ Don’t Be the Only One at the Table
The first offer is rarely the best offer.
Get multiple buyers bidding—competition drives up your valuation.
3️⃣ Look at How They Treat the Companies They Buy
Ask around. Do they invest in businesses, or gut them for short-term profit?
Review past deals. What happened to the companies they bought 3-5 years ago?
4️⃣ Negotiate the Right Deal Terms
Avoid excessive earnouts that keep you locked in too long.
Get cash upfront instead of just equity in the acquiring company.
Final Thought: Is a Rollup Right for You?
Not every rollup is bad.
Some unlock major growth, improve operations, and create multi-generational wealth for business owners.
But bad rollups?
They strip businesses for parts, crush local brands, and leave sellers stuck in golden handcuffs.
If you’re not thinking about rollups, your competitors are.
The best deals go to owners who plan ahead.
Whether you want to sell, scale, or stay independent, the time to build your strategy is NOW.
Considering your options? Let’s talk before you make a move.
For a deeper understanding of rollup strategies in the home services industry, watch this insightful discussion:
(Full credit for this video on Youtube)
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