HVAC Services M&A Update – July 2026

Emerging HVAC Representative Activity Supports Rise in HVAC Services M&A

The Heating, Ventilation, and Air Conditioning (HVAC) Services Merger and Acquisition (M&A) market has benefited from robust demand as a growing share of installed systems have reached repair- or replacement-ready status. This aging installed base has expanded revenue pathways across maintenance, repair, and replacement offerings, supporting strong underlying sector performance and cash flow generation. In turn, well-capitalized buyers have increasingly pursued inorganic growth, supporting healthy HVAC services M&A activity year-to-date (YTD) 2026. The market’s fragmentation and ripe consolidation opportunities have continued to support total sector deal volume. Roll up strategies have increasingly permeated into the HVAC Representative niche, a pocket of the market that serves as critical intermediaries between larger original equipment manufacturers (OEMs) and regional installers. The recurring revenue profiles and embedded customer relationships of these businesses have become highly sought after by sector acquirers seeking exposure to emerging market segments. Maturing infrastructure, combined with the increasing need for mission-critical service solutions, has upheld deal activity YTD, laying a foundation for accelerated growth for the HVAC Services sector through year end.

YTD transactional activity remains steady in the HVAC Services space and has been dominated by add-on acquisitions. Given that the markets remain fragmentated, we expect that this transactional trend will continue into the near future.

Ted PolkManaging Director, Capstone Partners

HVAC Services M&A Activity Exhibits Steady Upward Momentum

The continuous aging of installed HVAC systems and the ongoing need for specialized solutions has created a durable demand backdrop for HVAC Services sector participants and supported steady dealmaking activity to date in 2026. Total sector deal volume has inched 4.2% lower year-over-year (YOY) with 92 announced or completed transactions as both strategic and financial buyers have increasingly pursued scale in a fragmented market. Inflationary pressures and elevated replacement costs have also supported M&A activity. Of note, the Consumer Price Index (CPI) index rose 3.8% YOY in April 2026, according to the Bureau of Labor Statistics (BLS).¹ This inflationary backdrop has underscored a greater emphasis on cost management and asset longevity and constrained budgets across both Institutional and Consumer end markets have driven retrofit and maintenance services demand. Reliance on aging systems has driven demand for maintenance-focused providers with recurring revenue and repeat customer relationships. Similarly, repair-focused demand has positioned HVAC manufacturer representative firms to capture significant growth. These businesses have turned into highly attractive acquisition targets due to their role in facilitating specification-driven replacement and maintenance, connecting larger OEMs to local contractors. The growing interest in these companies is expected to continue throughout 2026 as buyers seek exposure to long-term repair, retrofit, and targeted replacement cycles.

Sponsors Sustain HVAC Services M&A, Strategic Dealmaking Moderates

Financial sponsors have remained active participants in the HVAC Services M&A landscape, leveraging the sector’s fragmentation and durable demand tailwinds to execute disciplined buy-and-build strategies. Sponsor activity in the HVAC Services sector has remained healthy, marking a slight uptick to 47 transactions YTD compared to 46 in YTD 2025. Private equity (PE) add-ons have accounted for the  lion’s share (41.3%) of dealmaking, growing two deals YOY to 38 transactions YTD. The fragmented nature of the sector has allowed sponsors to build out platform service lines and subsequently roll up small, local operators that offer well-established regional coverage, institutional relationships, and exposure to unique end markets. Notably, NorthCurrent Partners-backed Liberty Services Partners acquired Snidman Enterprises (formerly Arctic Breeze Air Conditioning & Heating) in April 2026 (undisclosed). This transaction has assisted in the build out of the Liberty’s Florida platform and network of customers, reinforcing the company’s plan to deliver quality HVAC services across the U.S., according to a press release.² Conversely, platform creations have slowed, dropping from 10 deals YOY to nine transactions YTD, as the intensification of ongoing sponsor-led buy-and-build strategies may be dissuading new PE entrants.

A clear divergence in strategic acquirer behavior has emerged, with public companies pursing opportunities for increased scale while private buyers have focused on more targeted deals aligned with near term operational service needs. Strategics have experienced a moderate deal volume downturn, logging 48.9% of HVAC services acquisitions YTD with 45 transactions, down from 50 in the prior year period. Private strategic M&A has decelerated to date, declining by 11 deals YOY to 34 transactions (37% of total sector deal volume) as these operators have increasingly adopted more disciplined capital deployment strategies. Private buyers have favored tuck-in opportunities that offer simpler operational integration and enhance existing service capabilities. In contrast, public strategics have emerged as increasingly active consolidators, with deal activity rising from five transactions in the prior year period to 11 YTD. Public buyers have selectively targeted businesses with strong recurring service exposure to strengthen revenue visibility. Of note, Teqnion (OM:TEQ) acquired Cambs Compressor Engineering, a provider of complete air solutions including design, installation, and maintenance (February 2026, undisclosed). Cambs’ annual revenue has averaged ~$2.6 million over the last three years, reinforcing the broader sector trend toward proven assets with clear earnings visibility, according to Nasdaq (Nasdaq:NDAQ).³ Persistent appetite for add-on acquisitions and strategic tuck-ins will likely initiate accelerated deal activity through year-end 2026, particularly as sector operators continue to prioritize service line expansion within a still-fragmented market.

HVAC Services M&A Valuations Normalize

Both momentum in deal volume and sector M&A multiples have normalized to date as companies have increasingly pursued smaller, bolt-on acquisitions aimed at building out service capabilities that typically trade at lower purchase multiples than platform acquisitions. Average multiples have settled at 2.0x EV/Revenue and 9.5x EV/EBITDA between 2024 and YTD 2026, coming down significantly from the 2021-2023 averages (2.3x EV/Revenue and 13.3x EV/EBITDA). This pattern has tracked broader HVAC valuations, which have dropped to an average of 11.4x EV/EBITDA between 2024-YTD 2026 from 13.4x EV/EBITDA in 2021-2023. Tapering buyer appetite for larger transactions, coupled with an uncertain economic backdrop yet to dissipate, has reinforced the sector wide decline in multiples. Together, these dynamics have signaled a structural reset in valuation levels, aligning M&A pricing more closely to the evolving demand of sector participants.

Aging Infrastructure Drives Demand for Specialized HVAC Representation

Demand for heating and cooling solutions has ballooned across the Commercial and Industrial segments, among other end markets. A significant share of installed commercial HVAC equipment has begun to age beyond useful life, with core assets such rooftop units carrying a typical service life of only 15–20 years and packaged chillers ranging from 20–23 years, according to American Society of Heating, Refrigerating and Air-Conditioning Engineers (ASHRAE).⁴ These units are likely to require significant repair and replacement in the near term, offering a strong demand backdrop for the HVAC Representative segment. Regulatory momentum has further reinforced this cycle, as tightening state-level energy codes, decarbonization mandates, and evolving federal mandates continue to reshape equipment standards across the built environment. Anchoring these efforts, the U.S. Environmental Protection Agency’s (EPA) initiative to curb Hydrofluorocarbon (HFC) production—The American Innovation and Manufacturing (AIM) Act of 2020 has continued to compel building owners to accelerate retrofits and modernization projects in order to remain aligned with the 85% HFC reduction target by 2036, according to Congress.gov.⁵ For HVAC representative firms, these sector dynamics have served as a durable tailwinds, underpinning both organic revenue growth and heightened demand. “Orders in our global Commercial HVAC1 business increased 35%, helped by data centers which were up over 500% in the quarter. The strong double-digit sequential increase in Commercial HVAC backlog gives us the confidence to drive our sixth consecutive year of double-digit growth in this business,” said David Gitlin, Chairman & CEO of Carrier (NYSE:CARR), in the company’s Q1 2026 earnings call.⁶Together, the increasing obsolescence of installed commercial and industrial systems, the regulatory push toward higher-efficiency equipment, and rising retrofit activity across the built environment have positioned the HVAC Services M&A market for continued multipronged growth. Several HVAC representation transactions are detailed below.

• Ferguson Enterprises to Acquire New England Applied Products (May 2026, Undisclosed) –Water and air solutions distributor, Ferguson Enterprises, announced its acquisition of New England Applied Products in May 2026. Terms of the transaction were not disclosed. New England Applied Products operates as an HVAC manufacturer’s representative firm, supporting system design, equipment specification, and sales while providing ongoing maintenance and parts support across Commercial and Industrial end markets. This acquisition is part of a slew of transactions that Ferguson has pursued in YTD 2026. The company acquired two water and wastewater treatment equipment manufacturers’ representative firms, Tech Sales NE and Chesapeake Environmental Equipment, in February 2025 (undisclosed). These acquisitions are anticipated to expand and enhance Ferguson’s operational capabilities across multiple mission-critical end markets, including Water & Wastewater Treatment and Commercial, Residential, & Applied HVAC. Ferguson has projected an aggregate increase of ~$350 million in annualized revenue as a direct result of these transactions, according to the company’s Q1 2026 earnings release.⁷

“Our scale-advantaged business model and consistent cash generation enable us to invest in organic growth, consolidate our markets through acquisitions and return capital to shareholders, all while maintaining a strong balance sheet. While the economic environment remains uncertain, we expect to continue to outperform the market by deploying scale locally while leveraging the long term growth drivers of water infrastructure, large capital projects, climate and comfort and aging and underbuilt housing,” said Kevin Murphy, CEO of Ferguson, in the earnings release.

• Intermediate Capital Group-Backed Ambient Enterprises Acquires Integ Systems (April 2026, Undisclosed) – Intermediate Capital Group (LSE:ICG)-backed Ambient Enterprises acquired Integ Systems in April 2026 for an undisclosed sum. Integ is a specialized provider of power and electrical solutions serving mission-critical infrastructure including data centers. The company has experienced notable growth driven by strengthening client relationships and assisting with customer geographic expansions. This transaction will help Ambient enhance its exposure to data centers and other critical infrastructure and establish a more wholistic set of capabilities. This deal has underscored a sector-wide shift in which consolidation has become a key focus in the HVAC Services market, as companies have sought to package together mechanical, electrical, and digital resources in order to better serve complex facilities.

“Integ brings a disciplined, systems-first approach to mission-critical infrastructure. Their ability to align electrical power systems with the operational realities of data-driven environments meaningfully strengthens Ambient’s platform for data centers and other mission-critical facilities,” mentioned Christopher Bisaccia, CEO of Ambient, in a recent company press release.⁸

• Blackstone-Backed AIR Control Concepts Acquires Technical Air Systems (February 2026, Undisclosed) – In February 2026, Blackstone (NYSE:BX)-backed AIR Control Concepts acquired Technical Air Systems (undisclosed). Founded in March 1994, Technical Air Systems operates as a regional HVAC manufacturer representative, offering a line card of solutions and services for schools, healthcare facilities, and government buildings, according to a press release.⁹ This transaction will assist in the expansion of AIR Control Concept’s geographic reach in the Northeastern region of the country—particularly New York (NY) and New Jersey (NJ)—while also enhancing the company’s service capabilities and breadth of product offerings.

“We’re proud to welcome the Technical Air team into the AIR family. Their deep regional expertise, technical approach, and strong reputation have made them a trusted partner in the NY/NJ market. By joining forces, we will further elevate the level of service, resources, and technical support available to customers and manufacturer partners across this important corridor,” stated Founder and CEO of AIR Control Concepts, Brad Hobbs, in the press release.

Capstone Speaks with Newton Metallo on 2026 Sector Outlook

Capstone spoke with HVAC manufacturer representative firm Newton Metallo to gain insight into current trends and future opportunities among HVAC manufacturer representatives within the Engineered Equipment segment. Perceptions from Newton Metallo point to a sustained prioritization of high-efficiency, application-specific HVAC solutions which have been increasingly viewed as critical to meeting evolving regulatory standards and end-user performance expectations. This discussion highlights a broader shift toward consultative, solution-oriented distribution models, where technical expertise, equipment integration, and close alignment with leading manufacturers enable a more customized and efficient system design. Additional detail is provided through the conversation below.

Pavan Mehta, Managing Partner

Pavan Mehta is a Managing Partner at Newton Metallo, an HVAC manufacturer representative firm that partners with leading equipment producers to deliver engineered heating, cooling, and energy recovery solutions across a range of end markets, including Multifamily Housing, Hospitality, Education, and Complex Commercial and Industrial Applications. The firm supports customers through equipment selection and system design, leveraging its technical expertise and manufacturer relationships to provide energy-efficient, performance-driven HVAC solutions tailored to diverse building environments.

How would you describe Newton Metallo’s positioning within the HVAC value chain, particularly as a manufacturer’s representative versus a contractor or distributor?

Traditionally, the perception is that we sit on the lower end of the hierarchy—from the owner to the architect, to the design engineer, to the general contractor, to the mechanical contractor; and then they buy the equipment from us, a manufacturer’s rep, or a distributor. Distributors typically are more commodity-driven brokers that sell high volume, low margin. They stock a lot of product and try to be the jack of all trades for everyone. We’re an applied HVAC manufacturer representative. With most of our lines, we differentiate ourselves through specialty, custom, innovative, energy-efficient products and services for the end user and the design engineer. The contractor is pretty much dictated to the design by the engineer and architect about what to buy—that’s the world we work in. We strategically position ourselves with these designs so that we don’t become a bidding or quoting service, which is how most distributors go to market. We tend to be a selective about the projects we pursue, how we bid work, and that selectivity is reflected in our profit margins across most of the business we do.

Why would an HVAC installer choose not to go directly to a distributor or directly to an OEM?

Most of what we do involves some specialty design, but we strategically pick and choose our spots—whether we know we’re competitive, our delivery and lead time are better, or a certain mix of products puts us in a highly advantageous position on bid day. That’s why we’ll go after a job. We’re not trying to be all things to all people, we’re very selective and careful about how we pursue that work. When we’re specified on a job—with the products we represent across those 20 lines—I would say we close 80 to 90% of that work if we’re the basis of design. If we’re not, it’s a coin flip for a variety of reasons—whether it’s pricing, lead time, a competitor that can’t ship, or one that’s trying to take advantage thinking they’re locked in. All of those factors come into play.

What end markets are currently driving the most activity for your team and where are you seeing the most momentum?

I don’t want to give the impression that we’re not sensitive to the hot buttons of the industry, we are, but we are very careful about not being over-aligned with any one market segment. Of course, data centers are a big hot button. For us, it’s always been schools. We have a long legacy and a deep install base in classroom units. High-percentage outside air is certainly a big deal, especially post-COVID with the push for more ventilation. That’s where we work closely with architects, engineers, and design teams so that we’re not lumped in with competitors that are just throwing out a bid and trying to keep up. We leverage our strengths in both our products and our knowledge. I speak sincerely that we have people with 30 to 40 years of experience here, and many of these engineers and architects trust our judgment more than anybody else in the industry because of it.

What are the key factors driving demand for HVAC system upgrades and retrofits?

Replacement renovation is a big part of our business market. We’re fortunate enough to have some business lines that are well-positioned for replacements of aging equipment. Classroom units, rooftop units, and cooling towers, in particular. With classroom units, we have a significant install base located here in NJ with classroom “unit ventilators”, and we “match” the criteria, with energy and ventilation upgrades that are necessary for schools.  With  cooling towers,  they are the most corrosive product in the HVAC industry. You have water treated with chemicals to keep it clean, and the equipment is typically exposed to the environment because it sits outdoors. The water gets dirty, and cooling towers are a really high-maintenance item for us.  With replacement rooftop units, we are known within the industry to field inspect jobsite condition prior to unit production/order release, to “guarantee: we meet all the existing criteria in the field. So, when a customer wants to replace an existing classroom unit, cooling tower, or rooftop unit, factors like footprint, weight, electrical, and piping connections are typically considered. If we’re doing a replacement in an occupied facility—a school, hotel, hospital, or office building—we want to get in and out as quickly as possible with minimal downtime. We pay a lot of attention to detail to ensure that disruption is kept at a minimum.

What kind of aftermarket opportunities is Newton Metallo able to cover?

A lot. Cooling towers and the aftermarket sales surrounding them—which my partner Paul Giacalone, Partner heads up—are extremely lucrative and profitable. Airedale units for classrooms also generate consistent business, there are lot of smaller parts (individual units in classrooms) that need to be replaced, but the bigger ticket items are compressors, fan assemblies, and coils.

How does your team differentiate when supporting projects that require highly customized or application-specific solutions?

It depends on the project. We did a large project last year that required very sophisticated temperature and humidity control specifications. We earned a significant premium for that type of design work. On the other end of the spectrum, we’ll handle commodity-type products that distributors sell and compete with us on. We’ve tried to evolve that market segment by adding fresh air options for more ventilation and better temperature control through variable speed compressors. We’re trying to move away from the commodity end and push into something more specialized and customizable. That is where we spend most of our time—trying to take any project and make something unique about it so we minimize the number of competitors who can bid against us.

Given your team’s involvement across complex HVAC and process cooling applications, do you expect end market demand to remain resilient in the near term, and what is driving that outlook?

We’ve had three consecutive years of very consistent performance, which have been some of the best years we’ve had. We market and position ourselves uniquely with the products that we carry so that we’re maintaining a high level of sales and profitability. We recently added two additional lines within the portfolio, that expand into the major metropolitan territories of New York City and Philadelphia. We’re considered a top-five rep in the U.S. for five or six key lines consistently. To grow beyond the segments where we already have a strong presence, we recognized the need to start expanding into new geographies, both of which are close proximity to us for where we are located. We’re a controlled-growth kind of firm, we’re not going to jump in with both feet without knowing where we’re going. We’re going to be calculated—do it the right way and expect a good result because of our presence in those markets.

The persistent demand for mission-critical HVAC repairs and replacements is anticipated to bolster growth for HVAC representative firms throughout the rest of 2026. Diverse line card capabilities have become a critical differentiator, positioning firms with specialized or complex services, strong manufacturer and consumer relationships, and regional expertise as attractive M&A targets. Sector M&A activity is slated to remain robust, catalyzed by strategic tuck-in deals and PE add-on engagements within the HVAC Representation segment.

To discuss the growing interest in HVAC representative firms, provide an update on your business, or learn about Capstone’s wide range of advisory services and HVAC services M&A knowledge, please contact us.

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

Endnotes

1. Bureau of Labor Statistics, “Consumer Price Index,” https://www.bls.gov/cpi/, accessed May 19, 2026.

2. Liberty Service Partners, “Liberty Service Partners Welcomes Second-Generation Arctic Breeze Air Conditioning & Heating, Strengthening Florida Platform,” https://libertyservicepartners.com/liberty-service-partners-welcomes-second-generation-arctic-breeze-air-conditioning-heating-strengthening-florida-platform/, accessed May 19, 2026.

3. Nasdaq, “Teqnion acquires Cambs Compressor Engineering Limited,” https://view.news.eu.nasdaq.com/view?id=b760f894b29a191bd538d238e08eebd35&lang=en&src=micro, accessed May 19, 2026.

4. ASHRAE, “ASHRAE Equipment Life Expectancy chart” https://www.ashrae.org/, accessed May 19, 2026.

5. Gov, “Hydrofluorocarbon Phasedown: Background and Issues Facing Congress,” https://www.congress.gov/crs-product/IF11779, accessed May 19, 2026.

6. Carrier Global, “Carrier Reports First Quarter 2026 Results,” https://www.carrier.com/us/en/news/carrierreports-first-quarter-2026-results/, accessed May 19, 2026.

7. Ferguson Enterprises, “Ferguson Reports First Quarter Ended March 31, 2026,” https://www.corporate.ferguson.com/pressroom/news-releases/news-details/2026/Ferguson-Reports-First-Quarter-Ended-March-31-2026/default.aspx, accessed May 19, 2026.

8. Ambient Enterprises, “Ambient Enterprises Expands Mission Critical Capabilities Through Partnership with Integ Systems Corporation,” https://ambient-enterprises.com/news-insights/ambient-enterprises-expands-mission-critical-capabilities-through-partnership-with-integ-systems-corporation/, accessed May 19, 2026.

9. AIR Control Concepts, “AIR Control Concepts Announces Acquisition of Technical Air Systems,” https://www.aircontrolconcepts.com/news/air-control-concepts-announces-acquisition-of-technical-air-systems, accessed May 19, 2026.