Buy-and-Build Strategy Deployment Drives M&A Activity in the HVAC Services Market
Capstone’s latest Heating, Ventilation, and Air Conditioning (HVAC) Services Sector Update reports that the HVAC Services market has experienced significant growth, driven by both the increased demand for comfort cooling and growing requirements for more precise temperatures in industrial processes and equipment. This demand has accelerated the need for comprehensive HVAC upgrades, advanced services, and ongoing equipment maintenance. These strong fundamentals have spurred robust deal volume and will likely support further market expansion. The recent temperature-control issues experienced in a data center supporting the Chicago Mercantile Exchange (CME) evidences the importance of cooling solutions for a wide range of information technology (IT) infrastructure build outs. Construction spending and constant servicing have remained foundational growth catalysts in the sector. Moreover, this spending through the first seven months of 2025 has already surpassed full-year 2024 levels. New construction spending has proved a critical source of revenue for leading strategics in the sector. Positive momentum in construction spending, coupled with recurring services, has supported an optimistic sector outlook.
Sector participants that provide mission-critical services—such as data center thermal management servicing, industrial refrigeration, or air quality management—for multiple end markets have become essential to managing the performance of the key infrastructure they support. This has also begun attracting significant merger and acquisition (M&A) attention, particularly for companies that are maintenance-oriented. This widely fragmented market has continued to present an attractive opportunity for strategics to achieve scale through consolidation, and for private equity (PE) firms to realize strong returns through multiple arbitrage. Capstone expects buyer appetite to remain fervent through year-end and into 2026 with targets offering geographic and service capability expansion continuing to undergo competitive sales processes.
M&A activity in the HVAC Services market has shown substantial strength year to date (YTD) with 149 transactions announced or completed, a 12.9% increase year-over-year (YOY). In comparison, total M&A activity in the Industrials industry has declined during the same period. This outperformance of the HVAC Services market over wider M&A markets has stemmed from ongoing market consolidation and the continued growth in demand for process cooling—building on the trends reported on in Capstone’s November HVAC Equipment Market Update. Consolidation has remained a fundamental growth catalyst, as sector operators pursue inorganic growth strategies to capture market share and expand geographic footprints. M&A multiples in the HVAC Services sector have remained elevated, reaching levels just below the 2020-2021 bull market average. Sector operators with unique offerings, particularly those that enhance buyer capabilities, have received premium valuations.
Also included in this report:
A summary of HVAC services PE activity trends and notable acquisitions YTD.
Several notable HVAC Services market M&A transactions featuring targets operating in mission-critical areas.
An overview of equity financing within the HVAC Services sector.
Capstone Partners’ Industrial Investment Banking Team provides M&A, capital formation, and financial advisory services to the owners of middle market businesses in the Industrials industries. Our team partners with leading mid-to-large sized business in the HVAC space that serve growing end-markets. For more information on HVAC Services market trends featured in this report or to speak with one of our Industrial Investment Banking Team members about how to grow, value, and/or sell your company, we are here to help. Contact us today to start a conversation.
