The Rise of Private Equity in Home Services: What Contractors Need to Know

If You’ve Been in the Home Services Game for Decades, This One’s for You.

You’ve probably built something you’re proud of.

You’ve put in the long hours, dealt with the headaches of hiring and firing, managed payroll when times were tight, and kept customers happy.

You’ve survived recessions, supply chain issues, and everything in between. Now, you’re looking at the next chapter—whether that means selling, scaling, or securing a future for what you’ve built.

Lately, you’ve probably been hearing more about private equity firms buying up home services businesses—HVAC companies, plumbing outfits, roofing contractors, and remodeling firms.

These deals sound promising on the surface: big money, quick closes, and a pathway to retirement.

But not all private equity partnerships are created equal. Some deals create massive value, while others gut businesses to cut costs, strip company culture, and leave longtime employees out in the cold.

So what does this wave of home services acquisitions mean for you? And how do you make sure you’re not just another number on a spreadsheet when the dust settles?

Let’s get real about the good, the bad, and the ugly of private equity in home services—so you can make the right move for you, your team, and your legacy.

Why Private Equity Is Buying Up Home Services Businesses

For decades, private equity focused on tech startups, finance firms, and healthcare companies. Now, they’ve turned their attention to home services businesses.

Why, you ask?

The home services industry is one of the most profitable, recession-resistant markets in the U.S. With predictable cash flow, repeat customers, and steady demand for plumbing, HVAC, roofing, and general contracting, private equity sees this sector as an easy way to generate returns.

The Numbers Tell the Story:

• $45 billion invested in U.S. home services businesses in 2024 alone. (PitchBook)

• 70% of private equity acquisitions involve rollups, where multiple businesses are consolidated under a larger brand. (PwC)

• Valuations have increased by 30-50% in the past five years as competition for acquisitions grows. (Bain & Company)

  
  

The reason for this boom? Fragmentation. 

Home services businesses are still largely owner-operated and spread across thousands of small, independent companies. Private equity firms see an opportunity to roll up multiple businesses, cut inefficiencies, and scale quickly.

The Good: When Private Equity Actually Helps a Home Services Business Grow

A good private equity deal is about more than just writing a check—it’s about investing in the long-term success of the business.

When done right, a private equity partnership can:

✔ Keep your team and leadership intact so the company culture stays strong.

✔ Invest in marketing, training, and technology to help scale operations.

✔ Expand into new markets or service lines to drive revenue growth.

✔ Create a structured exit strategy so the owner transitions out smoothly and gets paid fairly.

Success Story: Service Champions HVAC

Service Champions, a leading residential HVAC and plumbing services company, has undergone several private equity acquisitions over the years:

1. May 2019: CenterOak Partners LLC, a Dallas-based private equity firm, acquired a majority stake in Service Champions. (centeroakpartners.com)

2. January 2021: Odyssey Investment Partners acquired Service Champions from Center Oak Partners. (prnewswire.com)

3. April 2023: Service Champions, under Odyssey's ownership, continued its expansion by acquiring Fetch-A-Tech, a Las Vegas-based HVAC company. (championsgroupholdings.com)

   
   

This multi-location HVAC company was acquired by a private equity firm focused on growth, not cost-cutting. Instead of gutting the business:

• They invested in technology that improved scheduling and efficiency.

• They expanded service areas, increasing revenue.

• They trained and retained employees, ensuring long-term customer satisfaction.

  
  

The result? A business that grew by 30% in revenue and increased employee retention, rather than collapsing under mismanagement.

The Bad: When Private Equity Prioritizes Profits Over People

Not every home services M&A deal is built for long-term success.

Some private equity firms buy businesses just to flip them, and they don’t care who gets hurt in the process.

🚩 Immediate mass layoffs—they cut payroll to boost short-term profitability.

🚩 Slashing service quality—they increase profit margins by cutting corners.

🚩 Gut the leadership team—replacing key people with outsiders who don’t understand the industry.

🚩 No long-term vision—they don’t care if the company survives five years from now.

Horror Story: The HVAC Rollup That Imploded

A well-established HVAC company in the Southwest [let's protect their anonymity] sold to a cost-cutting private equity firm.

Within a year:

• 50% of the senior employees were gone, either fired or quitting due to mismanagement.

• Customer complaints skyrocketed because service quality dropped.

• The company lost major long-term contracts, cutting revenue nearly in half.

  
  

The firm flipped the remains of the business to another buyer, and what was once a thriving company is now just a cautionary tale.

This is why not all private equity deals are worth taking—and why you need to vet your buyers carefully before signing anything.

How to Protect Yourself When Selling to Private Equity

If you’re considering a home services business acquisition, you need to be prepared and ask the right questions before signing anything.

1. Clean Up Your Financials

Before you even think about selling, make sure your books are rock solid.

Private equity buyers want clean financials, steady cash flow, and predictable earnings. If your records are messy, you’ll either lose value or lose the deal entirely.

2. Demand Transparency on Post-Sale Plans

Don’t just focus on your payout—ask what happens next. Will they keep your employees? What’s their strategy for growing the business?

If they can’t answer clearly, walk away.

3. Understand Their Track Record

Ask for case studies of businesses they’ve bought.

What happened to them three, five, or ten years later? Did they grow, or did they collapse under aggressive cost-cutting?

4. Negotiate the Right Exit Structure

Not all deals need to be full buyouts.

Some private equity firms offer partial acquisitions, letting you keep minority ownership while they scale. This can be a smart way to get a second payday down the road.

5. Work With The Right Advisors

This isn’t a deal you should negotiate alone. A strong M&A advisor can help you:

• Maximize your valuation.

• Avoid bad contract terms.

• Find the right buyer—not just the highest bidder.

Final Thoughts: Making The Right Move for Your Business

If you’re a contractor, home services business owner, or construction professional thinking about selling, scaling, or exiting, you have options.

But not all private equity deals are created equal.

The right buyer can help you grow, protect your employees, and set you up for long-term success.

The wrong buyer?

They’ll gut your business, cut your staff, and leave a shell of what you built.

We’ve been in the trenches of this market long enough to see what works—and what doesn’t.

We’ve watched deals that set business owners up for life, and we’ve seen others that left them wishing they’d never picked up the phone.

That’s why we don’t push one-size-fits-all solutions.

Selling, merging, or holding onto what you’ve built—there’s no right answer, only the right answer for you.

If you're weighing your options, let’s have a real conversation.