HVAC Equipment Sector M&A Update – April 2026

HVAC Equipment Sector Participants Seek Cooling Solution Integration in High-Growth End Markets

The Heating, Ventilation, and Air Conditioning (HVAC) Equipment sector experienced a moderation in deal appetite in 2025 as inflated material costs and supply chain disruptions prompted market participants to prioritize internal investments over inorganic growth initiatives. However, select hot spots—namely data center thermal management and liquid cooling—enabled the sector to stave off the double-digit deal volume declines seen across the broader Industrials industry. Data center expansion has continued to support sector growth expectations in 2026, providing strong end market demand for cooling solutions. While traditional air chiller systems have remained the dominant configuration for data centers, new formats like liquid cooling, direct-to-chip (DTC), and hybrid cooling have begun to see more integration into computing facilities. Easing macroeconomic conditions, combined with rising demand for mission-critical thermal management solutions, have renewed merger and acquisition (M&A) activity in 2026, setting the stage for growth in the HVAC Equipment sector.

The changes in our economy related to artificial intelligence and the automation of business functions are extensive and are materially increasing demand for HVAC Equipment that can assist with thermal management and environmental control.

Ted PolkManaging Director, Capstone Partners

HVAC Equipment Sector Acquirers Remain Optimistic Despite Inflated Material Costs and Supply Chain Disruptions

HVAC equipment M&A fell 6.9% year-over-year (YOY) to 122 announced or completed transactions as inflated material pricing and supply-chain uncertainty restricted capital available. This decline represents relative strength compared to the broader Industrials industry, which saw M&A volume drop 24.6% YOY in 2025. Moreover, sector deal volume has stabilized through year-to-date (YTD) 2026, rising by one deal YOY to 17 acquisitions and further emphasizing the HVAC Equipment sector’s resilience amid sweeping tariff-induced cost pressures. The key dealmaking headwind in 2025 came from a 25% increase in the tariff rate on steel and aluminum imports, raising the duty for nearly all trading partners to 50%, according to an August 2025 Congress.gov article.¹ Effective June 4, 2025, this duty hike impacted HVAC Equipment sector participants significantly as both steel and aluminum remain core materials used in HVAC systems and components. The shift in trade policy forced many operators to delay transactions as the uncertainty around policy shifts and trade deals persisted throughout 2025. For buyers who have remained active amid the fickle geopolitical backdrop, transactions have primarily focused on product line expansion and end market diversification to avoid the tariff and supply-chain disruptions. Demand for cooling solutions derived from data center construction has emerged as a key catalyst for this product and end market expansion and will likely drive positive M&A momentum through 2026. Capstone has experienced this firsthand with two HVAC liquid cooling component manufacturing deals in market. For more information, reach out to Ted Polk and Jarrad Zalkin.

Private equity (PE) dealmaking served as a bright spot in the HVAC Equipment M&A market with sponsor acquisitions rising 2.7% YOY in 2025. PE platform deal volume declined by six transactions (-31.6% YOY) as firms focused capital deployment on sparse, platform-ready companies able to withstand challenging macroeconomic conditions. However, healthy add-on activity, characterized by a flight to quality, buoyed total sponsor M&A activity, adding eight deals (+44.4% YOY) in 2025. This momentum has continued into 2026 with six add-ons to date compared to two in the prior year period. This acceleration has been supported by repeat acquirers. One example of an active acquirer has been Blackstone (NYSE:BX)-backed Air Control Concepts, who completed three acquisitions in 2025 and one to-date (New Jersey-based Technical Air Systems in February, deal terms not disclosed) Financial buyers have continued to advance buy-and-build strategies rather than aggressively pursue larger capital-intensive assets amid the challenging dealmaking backdrop. Sponsors have prioritized smaller, more actionable bolt-ons to sustain value creation despite persistent market pressures. Improved macroeconomic clarity and strong sector tailwinds are anticipated to increase buyer appetite for HVAC equipment transactions, with expectations for outsized PE activity likely supporting an upswing in 2026 M&A activity.

Strategic buyers retained the majority (68.9%) of HVAC Equipment sector acquisitions in 2025, tallying 84 deals compared to 94 in the prior year. A nine deal decline YOY (-15.8%) from private acquirers led to this regression in 2025 strategic dealmaking. Public buyer deal volume remained steady, ticking down by one deal as these acquirers focused capital deployment on targets that added unique products and geographic areas to existing portfolios. Strategics displayed hesitance to pursue inorganic growth opportunities in 2025 due to elevated HVAC material costs, tightened industry regulations, and a muddied supply chain view. However, the broader macroeconomic sentiment among sector players has changed to a more optimistic tone for 2026 as accelerating compute infrastructure buildouts have renewed demand for high‑performance HVAC solutions.

HVAC Equipment Sector Valuation Multiples Surpass Broader Market Levels

Although total sector deal volume slid in 2025, companies that have aligned with underlying tailwinds continued to garner premium multiples. HVAC Equipment sector transaction multiples averaged 10.9x EV/EBITDA in 2025, rising nearly two turns from an average of 9.0x in 2024. M&A EBITDA multiple expansion in the sector outpaced that of the broader Industrials industry, which increased from an average of 9.1x in 2024 to 9.9x in 2025. Notably, ReactorSeal, a subsidiary of CSW Industrials (NYSE:CSW), acquired Aspen Manufacturing in March 2025 for $313.5 Million, representing 2.6x EV/Revenue and 11.0x EV/EBITDA. Aspen’s differentiated product portfolio, exposure to high-growth segments, and advanced HVAC component manufacturing capabilities supported its above-market valuation. Strong multiples are expected to persist in 2026, particularly for participants that are well positioned to capitalize on forward-looking growth themes including data center expansion, electrification, and innovative thermal management systems.

Evolving Efficiency Standards Propel Demand for Innovative and Reliable HVAC Thermal Management Equipment

This need for increased efficiency in managing rising power and thermal loads has positioned HVAC equipment companies as essential partners in data center expansion, enhancing operators’ value proposition and attracting heightened investor interest. U.S. data center electrical consumption totaled approximately 183 terawatt hours (TWh) in 2024, which is expected to more than double to reach 426 TWh by 2030, according to the International Energy Agency.² This rise in consumption has signaled a parallel escalation in heat generation, intensifying the need for more advanced cooling solutions to prevent thermal concerns. Cooling infrastructure improvements have emerged as a cornerstone initiative for data center facilities to manage power usage effectiveness (PUE)—the standard metric used to measure how efficiently a data center consumes energy, defined as the ratio of total power to information technology (IT) equipment power. PUE has become a critical measure for data center design, underscored by the recent emphasis that leading HVAC companies have placed on its efficiency. “Power remains a focus for data center operations. So, increasing PUE by reducing energy consumption in the cooling process is a major advantage and why we continue to gain market share,” noted Neil D. Brinker, President and CEO of Modine Manufacturing (NYSE:MOD), in the company’s Q3 2026 earnings call.³ Modine recently launched its new TurboChill chiller platform that directly addresses cooling of higher density graphics processing unit (GPU)-powered capabilities, allowing it to garner a higher share of data center applications. Sector operators, like Modine, have begun to leverage this measure to gain exposure to the growing Data Center Cooling subsector in the HVAC Equipment market. The continued evolution of efficiency requirements has laid a foundation for future growth initiatives, enabling participants in the space to align product roadmaps with long-term data center thermal management requirements.

The explosion of artificial intelligence (AI) and computer processing applications has affirmed Specialized Liquid Cooling as a new high growth segment within the HVAC Equipment market. The global Data Center Cooling market is forecasted to reach between $40 and $45 billion by 2030, with liquid cooling garnering a significant share of ~$15-$20 billion, according to McKinsey & Company.⁴ The rise in processing workload complexity and demand has pushed operators to rethink the traditional air cooling system’s ability to support advanced AI hardware thermal output. Businesses with innovative solutions, including liquid, DTC, and hybrid cooling have begun to see increased adoption and acquisition interest due to the applications’ overall effectiveness and innovation in managing mission-critical technology. Sector providers have sought exposure to this emerging hot spot through both organic and inorganic initiatives. Of note, Automated Logic – Canada (ALC), a subsidiary of Carrier (NYSE:CARR), acquired Control Solutions in August 2025 for an undisclosed sum. The transaction expanded ALC’s ability to deliver intelligent building automation to multiple end markets, including Data Centers. Market participants have deployed investment capital towards unique technological solutions that enhance operational capabilities to address the thermal management demands for AI-driven data center infrastructure. Notably, Carrier, a global intelligent climate and energy solutions company, has seen outsized revenue growth supported by investments in innovative and dependable cooling systems. “These multiyear investments have positioned us to outgrow the Commercial HVAC market, as reflected in our 2026 outlook, with double-digit revenue growth including data centers up about 50%,” David Gitlin, Chairman and CEO of Carrier, said in the company’s Q4 2025 earnings call.⁵ Large HVAC equipment providers, like Carrier, as well as smaller operators with unique end market exposure and innovative product suites, are well-positioned to capitalize on heightened demand for cooling solutions catered towards data center infrastructure in 2026. Several thermal management transactions are detailed below.

Acquirers Target Data Center–Adjacent Capabilities as Segment Momentum Fuels M&A Activity

• Ecolab to Acquire CoolIT Systems (March 2026, $4.8 Billion) – Ecolab (NYSE:ECL), a digital solutions company, announced its acquisition of CoolIT Systems from PE firm KKR (NYSE:KKR) in March 2026. Under the terms of the transaction, Ecolab will pay an enterprise value of $4.8 billion, representing 29.0x next-twelve-month (NTM) EBITDA, according to a press release.⁶ CoolIT Systems engages in the engineering and manufacturing of direct contact liquid cooling technologies, focused on serving the Data Center and Cloud Server end markets. The combination of CoolIT’s thermal management capabilities with Ecolab’s global service expertise is expected to strengthen the acquirer’s cooling-as-a-service offering, helping AI data centers boost performance and reduce downtime. “AI is transforming the demands on data centers, and liquid cooling is one of the critical technologies that makes advanced computing possible. By bringing together CoolIT’s engineered cooling technologies with Ecolab’s expertise in water, chemistry, and digital service, we can provide our customers a complete cooling solution that improves performance and reliability while reducing water and energy use,” said Christophe Beck, Chairman and CEO of Ecolab, in the press release.
• Blackstone to Acquire Advanced Cooling Technologies (March 2026, Undisclosed) – Blackstone announced its acquisition of a majority stake in Advanced Cooling Technologies (ACT) in March 2026. The terms of the transaction are undisclosed. ACT designs and manufactures highly engineered thermal management and energy efficiency solutions, targeting advanced computing, high power density, and mission-critical applications. Blackstone’s majority investment is expected to help ACT’s liquid cooling product innovation and enhance its value proposition for customers. “We believe ACT is well positioned for accelerated growth given the increasing importance of thermal management amid rising power intensity and AI innovation. This includes the company’s pioneering work helping meet the next generation of data center and high-performance chip cooling requirements,” mentioned Mark Zhu, Managing Director at Blackstone, in a press release.⁷
• Daikin Applied Americas Acquires Chilldyne (November 2025, Undisclosed) – Daikin Industries’ (TSE:6367) subsidiary, Daikin Applied Americas, acquired Chilldyne, a manufacturer of energy-efficient liquid cooling systems for high performance facilities and AI data centers in November 2025. Terms of the transaction were undisclosed. The transaction brings Chilldyne’s patented Liquid Cooling Distribution unit, which utilizes chip-level cooling while also managing leak risk, to Daikin’s service capabilities, according to a press release.⁸ “By acquiring Chilldyne, Daikin Applied is poised to deliver a comprehensive suite of data center cooling solutions that address the evolving needs of our customers and set a new standard for performance and uptime…Chilldyne’s negative pressure technology offers cost and uptime advantages over traditional positive pressure systems, positioning our business as a leader in the high-performance Data Center Cooling space,” stated Yu Nishiwaki, COO of Daikin Applied Americas, in the press release.
• DeepCoolAI Acquires MAS HVAC (November 2025, Undisclosed) – DeepCoolAI, a manufacturer of liquid cooling systems for AI and high-performance computing, acquired MAS HVAC in November 2025 for an undisclosed sum. MAS HVAC engages in the design and manufacturing of thermal management products for the Data Centers and Industrials markets. The combined entity is positioned to service the Data Center market’s thermal requirements by providing a wide breadth of flexible cooling solutions. “The rapid growth of artificial intelligence requires today’s data centers to ensure they are equipped with cooling solutions that are performant, efficient, and reliable. We are excited to combine with MAS to create a truly differentiated solutions partner for our customers in the thermal management market,” stated Kris Holla, Founder and CEO of DeepCoolAI, in a press release.⁹
• Samsung Electronics Acquires FläktGroup (May 2025, $1.7 Billion, 2.1x EV/Revenue) – Samsung Electronics (KOSE:A005930) acquired FläktGroup, Europe’s largest HVAC company, in May 2025 for ~$1.7 Billion, reflecting 2.1x EV/Revenue. FläktGroup designs and manufactures advanced air treatment, conditioning, and cooling systems, with a strong presence in data center applications. Samsung’s acquisition enables the company to leverage FläktGroup’s extensive production capacity to expand research and development efforts while also strengthening its supply chain. FläktGroup’s subsidiaries, including Woods Air Movement, SEMCO, and SE-Elektronic will be integrated into Samsung’s operations as the company will be reenvisioned into a new catalyst within Samsung’s existing HVAC-focused division. Notably, FläktGroup’s participation in high performance cooling initiatives—supported by custom solutions for the Data Center sector—aligns with Samsung’s strategy to capitalize on rising demands within the growing AI segment. “This marks a strategic move for Samsung, aimed at leading the global HVAC and Data Center markets. By merging FläktGroup’s technological expertise with Samsung’s AI platforms, we aim to set a new benchmark in the industry, delivering innovative solutions to customers,” mentioned TM Roh, President and Acting Head of the Device eXperience (DX) Division of Samsung, in a press release.¹⁰

The continued development of data centers is expected to be a catalyst for HVAC Equipment sector growth throughout 2026. Advanced cooling solutions have become critical to the operation of AI data centers, attracting increased buyer attention to the sector. These shifts will likely encourage M&A activity as operators seek exposure to innovative technology solutions that work with current product offerings while presenting avenues into the lucrative Data Center end market. HVAC equipment companies that can successfully leverage these capabilities to gain access to hot spots within the market are likely to garner outsized acquirer interest.

To discuss the widespread adoption of data center cooling solutions, provide an update on your business, or learn about Capstone’s wide range of advisory services and HVAC Equipment sector knowledge, please contact us.

Matt Milone, Analyst, was the lead Market Intelligence contributor to this article.

Endnotes

1. Library of Congress, “Expanded Section 232 Tariffs on Steel and Aluminum,” https://www.congress.gov/crs-product/IN12519, accessed February 13, 2026.

2. International Energy Agency, “Energy demand from AI,” https://www.iea.org/reports/energy-and-ai/energy-demand-from-ai, accessed February 13, 2026.

3. Modine Manufacturing, “Modine Manufacturing Q3 Fiscal 2026 Earnings Call,” https://investors.modine.com/events-and-presentations/default.aspx, accessed February 13, 2026.

4. McKinsey & Company, “Keeping Cool in The Data Age,” https://www.mckinsey.com/capabilities/operations/our-insights/operations-blog/keeping-cool-in-the-data-age, accessed February 5, 2026.

5. Carrier Global, “Q4 2025 Earning Release,” https://ir.carrier.com/events-and-presentations/events/event-details/2026/Q4-2025-Earnings-Release/default.aspx, accessed February 5, 2026.

6. Ecolab, “Ecolab to Acquire CoolIT Systems, a Global Leader in Advanced Liquid Cooling for Next-Gen AI Data Centers,” https://www.ecolab.com/news/2026/03/ecolab-to-acquire-coolit-systems-a-global-leader-in-advanced-liquid-cooling-for-next-gen-ai-data-ce, accessed February 13, 2026.

7. PR Newswire, “Blackstone Energy Transition Partners Announces Agreement to Acquire Majority Stake in Advanced Cooling Technologies,” https://www.prnewswire.com/news-releases/blackstone-energy-transition-partners-announces-agreement-to-acquire-majority-stake-in-advanced-cooling-technologies-302711030.html, accessed February 13, 2026.

8. Daikin Applied Americas, “Deal Adds Direct-To-Chip Liquid Cooling Technology to Daikin Applied’s Growing Portfolio of Data Center Solutions,” https://www.daikinapplied.com/news/news/daikin-applied-expands-data-center-offering-with-acquisition-of-chilldyne, accessed February 3, 2026.

9. EIN Presswire, “DeepCoolAI and MAS HVAC Merge, Creating a Leading Thermal Management Solutions Partner for Data Centers,” https://www.einpresswire.com/article/866611111/deepcoolai-and-mas-hvac-merge-creating-a-leading-thermal-management-solutions-partner-for-data-centers, accessed February 13, 2026.

10. Samsung Newsroom, “Samsung Electronics Completes Acquisition of HVAC Company FläktGroup,” https://news.samsung.com/global/samsung-electronics-completes-acquisition-of-hvac-company-flaktgroup, accessed February 13, 2026