HVAC Services M&A Update – July 2025

HVAC Services M&A Sees Continued Consolidation, Refrigeration Enters as Intriguing End Market

As the Heating, Ventilation, and Air Conditioning (HVAC) Services market continues to receive outsized attention from private equity firms and the space becomes increasingly competitive, buyers have targeted bright pockets of the fragmented market to drive returns. One area that has seen increased attention has been Industrial Refrigeration—used in food processing, cold storage, and pharmaceutical—where demand has accelerated. Tailwinds include stricter environmental regulations, aging infrastructure, and rising demand for temperature-controlled supply chains, all of which have pushed operators to modernize systems. Notably, the global Industrial Refrigeration market was estimated at $19 billion in 2024 and is expected to grow from $20 billion in 2025 to $34.4 billion in 2034, at a compound annual growth rate (CAGR) of 6.2%, according to a report from Global Markets Insights.¹ The Food & Beverage space is projected to continue to lead end market demand, accounting for 47.6% of market share in 2024. Buyers have targeted these specialized capabilities through calculated mergers and acquisitions (M&A) and Capstone anticipates that, as the strategy to roll-up HVAC services providers continues, old and new entrants alike will target adjacent offerings.

Consolidation of the HVAC Services market continues and inbound inquiries to us from prospective acquirers interested in these types of businesses remains high.

Ted PolkManaging Director, Co-Head of Industrials Investment Banking, Capstone Partners

Private Equity Firms Drive HVAC Services M&A Market

Global HVAC Services market M&A volume has ticked up to 77 deals announced or completed year to date (YTD) compared to 76 in the prior year period. The space has continued to demonstrate resilience as broader M&A markets have lagged in the first half of 2025. Sector fragmentation and niche market positioning by small- and medium-sized enterprises (SMEs) have drawn an active pool of private equity buyers. Competition for these businesses has stiffened YTD as buyers vie for an increasingly limited number of targets across diversified geographies. Strategic buyers have accounted for 49.4% of sector transactions through YTD 2025, compared to 67.1% during the prior year period. Loosening credit conditions from three consecutive interest rate cuts in the second half of 2024 has advanced the appetite of private equity buyers in the space. This has largely materialized in private equity add-ons, which rose 88.2% year-over-year (YOY). The cohort of private equity buyers is expected to further increase as business owners capitalize on sponsors’ fervent buyer interest, competitive valuations, and bolt-on capabilities.

Capstone Speaks with The Cold Core Group on Industrial Refrigeration Acquisition Strategy

Jim Kopczynski, CEO
Capstone recently spoke with Jim Kopczynski, CEO, The Cold Core Group to discuss current trends and success stories in the Industrial Refrigeration segment of the HVAC sector. The Cold Core Group is the parent of a family of operating companies that specialize in providing a comprehensive suite of industrial refrigeration and related services. The Cold Core Group was acquired by TJM Capital Partners in January 2020 for an undisclosed sum and has assisted the family of operating companies to utilize decades of experience and in-house fabrication capabilities to service an extensive list of long-term, blue-chip customers across the U.S. The Cold Core Group provides a platform for All Temp Refrigeration, Summit Refrigeration, and Fore-Front Mechanical to share and leverage the collective capabilities and expertise across operating companies to deliver even more scale and efficiency to its customers.

How does The Cold Core Group differentiate itself, and what is your secret sauce?

I use those words ‘secret sauce’ often myself. Yes—we are a full-service provider that has national reach with regional presence. That alone differentiates us relative to our competition. However, what clearly differentiates us—our ‘secret sauce’—is our people and culture. We put tremendous focus on that. As a private equity-backed platform, we aim to partner with leading businesses in the Industrial Refrigeration market. To no surprise, great businesses have great people and special cultures. Often, the groups we team up with are at some sort of inflection point and looking for a new partner to help accelerate growth and look to elevate the business to the next level. With these new partnerships, we push the throttle down—pursue growth, prepare the business for scale, implement new systems, etc. All of that leads to change. However, what we cannot change or disrupt is the people and culture that made these businesses great. So, we put a ton of energy and effort behind that. With the acquisitions we’ve made, it always comes back to that and it’s one of our investment criteria. Is there a fit? So long as they’re a fit, we can figure out how to pursue growth and scale the business. To lock in our focus on people and culture, we anchor on our core values, COLD: Customer, Own it, Long term, and Dedicated. For us, those core values, the fit, the people, and culture are paramount. Our core values are everywhere—banners in our shop, stitched in the sleeves of our hoodies, logos on the side of our trucks, and even in the name of our company. The Cold Core Group is a call out to our core values. So that is absolutely what differentiates us. We’ve got a deep, deep bench of super great people.

How has being a private equity-backed business helped The Cold Core Group with its growth plan? How has your experience been with TJM Capital?

TJM Capital is a great firm—they have been a fantastic partner. Private equity is an important asset class. I am a former private equity guy. Many years ago, I was on the transactional side before I found myself in an operating role of a portfolio company. I have an appreciation for private equity and what those goals and objectives are for a firm, and how a firm’s resources, experience, and tools can be deployed to help businesses get to that next level. Yes, of course, it’s great to have investment capital to pursue strategic initiatives—be it growth, expansion, M&A, all of that is important—and that’s part of private equity investing. But I think what also is kind of the catapult or catalyst in being a private equity-backed platform is you just have access to a bench of folks who bring a whole lot of experience in getting companies to the next level.

When you think about what we’re trying to do as a private equity-backed platform, you’re partnering with these great companies and then you have a shared vision with the founders or the prior owners and try to get it to that next level. In private equity, you’re trying to do that pretty quick in order to capitalize on attractive market trends and dynamics. You look to hit the gas and really push these things fast. In order to do that successfully, it helps to have additional strategic oversight and guidance. You need to leverage the experience of a firm who has done that. We have this with TJM Capital.

Can you discuss the motivations behind the acquisition of Fore-Front Mechanical?

I’d say we have been very deliberate in terms of our consolidation efforts. We want to make sure it is the right business. We want to make sure it aligns with our overall investment criteria and strategy because one bad partnership can spoil the bunch. We’ve been slow and steady, and we’ve picked the right partners. To date, our success and trajectory are indicative of that.

Fore-Front hit the mark for us.

First, and I already referenced this, is fit and culture. It has to be the right feel with the group you’re partnering with and that’s mutual. We felt a strong fit and connection with the team at Fore-Front from the very first meeting.

Next, we want to focus on our specialty, industrial refrigeration. We look for pureplay industrial refrigeration players, but we also extend that into other mission-critical industrial services. We view extending our services and capabilities as a way to bring more value to our customers. Over time, our customers have said, ‘Hey, can you help us with HVAC? Do you guys do boilers? Can you help us with that?’ So, we’ve selectively expanded our capabilities to add more value to our customers. They want to have some core vendors that can do more for them. As we’ve inched into these other capabilities (HVAC, boilers, process piping) we offer end-to-end services—design, build, maintenance, preventive maintenance, you name it—for every additional capability that we add. For example, we have a lot of customers in the Food Processing industry. Many of those customers have been expanding capacity by adding new production lines. That new production line will likely require additional refrigeration, but also is going to need material handlers, conveyors, more mechanicals, and utilities, etc. We can bring the refrigeration, but our customers were asking if we could do more. Why not offer more—provide a turnkey solution for everything from refrigeration to process piping to stainless fabrication. Teaming up with Fore-Front expanded Cold Core’s offering to do just that. Fore-Front is a Food industry-focused mechanical contractor that specializes in stainless fabrication. Fore-Front, like Cold Core, provides mission-critical industrial services. Cold Core Groups customers have needs that Fore-Front can solve. Fore-Front’s customers have needs that Cold Core Group can solve. Together, we offer comprehensive, end-to-end solutions to our customers.

Finally, both the Fore-Front team and Cold Core team felt that there was tremendous opportunity to accelerate growth and a compelling operational overlap. Fore-Front had been experiencing a lot of growth and was poised to accelerate that growth. So, we felt like we could add a little gas to that fire. Fore-Front also helps to bolster our geographic expansion. We’ve expanded a lot over the last five years. We’ve opened offices in Louisville. We’ve opened a presence in Northwest Arkansas, in the Gulf Coast, and out in North Carolina. We’ve grown these regional offices and as we get into these new regions, we want to drive density. We want to get in and start to get a denser profile in any specific region. Fore-Front is based in Wausau, Wisconsin, which is Central Wisconsin. We have an office in Menomonee Falls, so there’s a lot of operational overlap to drive some of that density, and Fore-Front’s got customers nationwide that fall very much into where we service other areas. They have customers in that Northwest Arkansas area. They’ve also got customers in the Gulf Coast and the Southeast and Eastern regions to really drive more of that geographic expansion for us as well.

The strategic rationale behind the acquisition of Fore-Front ran the table for us: fit and culture, complementary beyond industrial refrigeration, great financial profile, etc. Everything about the Fore-Front partnership aligned well with our overall strategy.

Out of your cohort of potential targets, how do you identify which ‘puzzle pieces’ to tuck-in?

From an acquisition strategy perspective, all of the stuff blends together. We put, as I mentioned, tremendous focus on partnering with great companies, and great companies have great people. Many of the companies we’ve partnered with, and it’s not an absolute requirement, have been founder-led. In the acquisitions we’ve done, we’re buying the businesses from the founders. That’s not a hard and fast investment criterion. It’s just more circumstance in the deal flow that we’ve had, but those founders have been our biggest advocates. Those folks are out generating a whole lot of proprietary deal flow for us, so much so that we created our own, internal corporate development effort that works in tandem with TJM on acquisitions. We’re looking at a lot of deals, but we do have a pretty tight criteria in terms of what we’re looking for out of those deals. But there’s definitely a lot of potential, a lot of opportunity, and I think this speaks a little bit to the Industrial Refrigeration market as a whole. It is in the earlier stages. It has a little more whitespace relative to HVAC, which some might argue is in the later innings of a consolidation play. Industrial refrigeration is different. It’s earlier in its stages and still has all the criteria that you want: largely fragmented, great underlying market trends, and a big addressable market. It’s got all those things, and it’s just a little earlier in its evolution than other spaces. That dynamic too has helped generate a lot of M&A potential for us.

How has the current lending environment impacted your investment thesis and acquisition strategy?

For us, we have been deliberate. Year-over-year, our compound annual growth rate is in excess of 25%, largely organic growth. We haven’t done a lot of acquisitions, but that growth is smart. We’re not just chasing every project, we’re picking the right projects, deploying the right resources against those projects, and executing well. Our business has experienced tremendous, methodical organic growth. As for the acquisitions that we have closed, we take a conservative approach in terms of leverage—this is a TJM point. We manage the businesses and the acquisitions tight. So, our performance has been rock solid for the last five years since we’ve been in this platform. And there has been strong performance well before us for each one of the companies that we’ve partnered with. That strong performance is coupled with our prudent financial management around overall leverage, working capital dynamics, etc. We have been with the same banking partner since launching this platform. They have witnessed our success. So, when we needed additional financing for acquisitions, our bank has been supportive. The credit markets have been steady and accessible for us because our performance supports it. We’re building a great business. Our track record is super solid and that translates to being a great credit. Our banking partner’s been there from the beginning and has been incredibly supportive.

Is there any preparatory advice you have for business owners considering a sale?

I think that it starts with the founders or business owners understanding what their motivation for considering a sale really is. Sometimes, it is driven by increased activity in their industry—perhaps friends who started a business around the same time sold. Or maybe there is increased inbound, unsolicited interest from private equity or investment firms. Go explore those conversations. It can’t hurt to have the conversation. It can’t hurt to get a sense of those market drivers. Do a little bit of that advanced thinking. As you do have those conversations, pay close attention to the fit and culture. This is key. Especially for those founders, it is your baby. As you think about those transitional aspects, who you’re going to partner with is imperative. Also, think about your desired level of involvement going forward. For us, every one of the founders who wanted to remain involved that we’ve partnered with are involved. We had two of them that wanted to retire so they did, but otherwise, hands are still on the wheel, still actively engaged and involved, and I think that’s a function of making sure that we’re partnering with the right people. That we share the right vision of the business going forward. I think that ’dating,’ so to say, to understand whether there is a fit is an important aspect for a founder to consider.

As you get into the transactional side of things, just the due diligence and the preparation around all that can be a long process. There will be a lot of information requests, accounting reviews, legal discussions, etc. If you can prepare a bit in advance, it will help streamline what will be a long process.

The general advice is, pay attention to the market drivers, have conversations, and make sure that as you advance those conversations, it feels right. That’s a big part of the equation for sure.

What are some key drivers in the Industrial Refrigeration market?

This is a market that has demonstrated recession resistance. Even pandemic resistance. We closed our first deal in June of 2020, when we acquired All Temp Refrigeration. It was a tough time to close a deal, but right from the beginning, we never really had a blip. When you think about industrial refrigeration, you think about our end user markets and it’s almost a blind draw. Food Processing—regardless of economic conditions, stuff has to stay cold. People have to eat. Pharmaceutical, Manufacturing, Cold Storage, or just overall Cold Chain on the industrial side of things, any one of those markets have a whole lot of positive momentum regardless of economic condition. Recession drivers, tariff drivers, you are largely insulated because it is a mission-critical service, and things flow through that supply chain or that manufacturing line, regardless. Whether it was the pandemic, the election of 2020, or the election of 2024, for us it’s just been steady as she goes because we’re in one of these markets that regardless of the outlier or economic conditions surrounding it, the business still has to operate. It’s a super solid market with a whole lot of favorable trends to it, no question.

Do you envision that the Industrial Refrigeration market is going to remain strong over the near term?

I do, absolutely. We’ve seen little to no indications otherwise. Industrial Refrigeration is mission-critical. Our primary end user markets—Food Processing, Cold Storage and Logistics, Pharmaceutical, Industrial Manufacturing—all have significant tailwinds and attractive dynamics. As those end markets go, so goes industrial refrigeration. As I mentioned, the Industrial Refrigeration market powered right through a pandemic, economic uncertainty, elections, tariff pressures. In fact, it has felt like there has been growing opportunity throughout all of those shifts. And I think therein lies a little bit of increased interest in private equity in this segment, because all of those deal criteria, as you’re evaluating an investment thesis, industrial refrigeration has it and has had it.

To discuss private equity-backed consolidation activity in the sector, provide an update on your business, or learn about Capstone’s wide range of advisory services and HVAC Services M&A market knowledge, please contact us.

Neve Adler, Analyst, was the lead Market Intelligence contributor to this article.

Endnotes

1. GMI, “Industrial Refrigeration System Market – By Component, By Refrigerant Type, By Capacity, By End Use Industry, By Distribution Channel – Global Forecast, 2025 – 2034,” https://www.gminsights.com/industry-analysis/industrial-refrigeration-system-market, accessed June 10, 2025.