SF&P Advisors Predicts Bright 12 months for HVAC & Plumbing M&A

SF&P Advisors has carved a niche for itself in the realm of mergers and acquisitions (M&A) for contractor and HVAC companies across the United States.

With a track record spanning over two decades, SF&P has become synonymous with facilitating seamless transitions from contact to contract, particularly in the HVAC (Heating, Ventilation, and Air Conditioning), plumbing, electrical, mechanical, roofing, and garage doors sectors.

The firm’s $2.92 billion in closed transaction value - across 385 individual deals - means SF&P has more than enough data to predict where the market will head next.

At the core of SF&P Advisors' operations is a full-service suite offering business valuation, accounting, research, financial analysis, and success strategies. Their clientele, comprising HVAC and plumbing businesses, mechanical and commercial contractors among others, find a trusted partner in SF&P Advisors, one that navigates the complex waters of M&A with a finesse honed over years of practice.

The firm's approach is holistic. It's not just about the transaction; it's about making the most of the life's work of the business owners. This ethos is reflected in the testimonials of satisfied clients who commend the dedicated team of professionals at SF&P Advisors for their unwavering support during what they describe as life-changing moments.

One of the hallmarks of SF&P Advisors is its strong relationships with key consolidators and purchasers in the industry. These relationships, forged over years, are leveraged to drive superior outcomes for their clients.

The firm's reputation has also earned it prestigious awards: In 2021, it was rated among the Top 20 Investment Banks by M&A platform Axial and that trend continued throughout 2022 as well.

Brian Cohen, SF&P’s Business Strategist, believes that the run up to the Presidential election in November of next year will drive many business owners to look at options to exit their businesses. With a significant chance of economic - if not political - unpredictability, and an environment of high interest rates, in the short term, Cohen sees that there is a little downside to a business owner selling majority ownership to an acquirer.

“We have had record breaking valuations in recent years. Even if a business is now valued at 8x earnings instead of 10x, it can still make sense to business owners to take some chips off the table. If valuations go up next year, the entrepreneur’s minority equity portfolio shares will allow them to enjoy the upside, whilst their sale in the next 12 months protects them against what could be a hostile business environment”.

So is it the right time for a business owner to exit? The only wrong answer for a business owner is if valuations come back down to pre-pandemic levels. At that point in time, they've missed the bus and no one could tell you when valuations will come back up to the highs that were seen in 2021 and 2022. While the market has come off those highs, an owner that waits too long to make a transaction happen, if the valuations drop off further in 2024, may be waiting many years for this to come back. The questions owners should be asking themselves, is waiting worth the risk?