This briefing compiles verified data on mergers and acquisitions in the residential home services trades, with a focus on the valuation multiples paid for HVAC, plumbing, roofing, and electrical businesses in the United States. It separates seller’s discretionary earnings (SDE) multiples used in the small-business “Main Street” segment from EBITDA multiples used in the lower middle market, because conflating the two is the single most common error in this topic. All figures carry a year, a geography, and a named source, and broker-reported multiples are flagged where methodology drives the number more than the market does.

Executive Summary

• The median small business sold on BizBuySell in 2025 traded at 2.61x cash flow (SDE) on a median sale price of $350,000, with 9,586 transactions closed, up 0.4% year over year. Source: BizBuySell Insight Report, 2025 year-end.
• In the lower middle market, businesses valued at $5M to $50M traded at a 5.5x EBITDA median in Q2 2025, recovering from a Q1 dip. Source: IBBA and M&A Source Market Pulse, Q2 2025.
• HVAC private equity add-on activity rose 88.2% year over year through mid-2025, and financial buyers reached roughly 50.6% of HVAC sector transactions, up from about 32.9% a year earlier. Source: Capstone Partners, HVAC Services M&A Update, July 16, 2025.
• Private equity investors purchased nearly 800 HVAC, plumbing, and electrical companies between 2022 and October 2024, per PitchBook data cited by The Wall Street Journal. Source: WSJ via American Investment Council, October 2024.
• TopBuild’s acquisition of Progressive Roofing closed at 9.1x EBITDA in July 2025, a platform-quality roofing benchmark where about 70% of revenue was non-discretionary re-roofing and maintenance. Source: Lightning Path Partners / Hyde Park Capital, 2025-2026.
• US add-on (bolt-on) acquisitions totaled 4,950 in 2024 and 4,509 in 2025, the roll-up engine behind home services consolidation. Source: PitchBook via NEPC, 2024-2025.
• End customers spend roughly $1.5 trillion annually on trades services for homes and businesses in the US and Canada, the demand base attracting consolidators. Source: ServiceTitan Form S-1, SEC, 2024.
• Recurring maintenance revenue is the dominant multiple lever: industry advisers report the same HVAC business can move from a roughly 5x-6x to an 8x-9x EBITDA range as recurring mix rises, though these are adviser estimates, not transaction registries. Source: multiple M&A advisers, 2025-2026 (flagged as estimate).

Key Findings

• Small businesses sold on BizBuySell in 2025 carried a median cash flow of $158,950 and median revenue of $703,000, each up about 3% year over year. Source: BizBuySell Insight Report, 2025 year-end (US).
• The average revenue multiple for small businesses sold was 0.69x in 2025, versus the 2.61x cash flow multiple, showing why earnings-based multiples are the standard for this segment. Source: BizBuySell Insight Report, 2025 (US).
• Median time to close a small-business sale was 170 days in 2025, and sellers received about 94% of asking price on average. Source: BizBuySell Insight Report, 2025 (US).
• In Q1 2026, the BizBuySell median sale price held flat at $350,000 while median cash flow rose 3% to $165,256 and the average cash flow multiple rose to about 2.7x. Source: BizBuySell Insight Report, Q1 2026 (US).
• Main Street deals under $500K edged up to a 2.3x SDE median in Q2 2025, a level the survey notes rarely clears 2.0x. Source: IBBA and M&A Source Market Pulse, Q2 2025 (US).
• The $5M to $50M EBITDA segment sat 0.8 points higher in Q3 2025 than at the start of 2025, indicating lower-middle-market multiple expansion through the year. Source: IBBA and M&A Source Market Pulse, Q3 2025 (US).
• Baby Boomers were about 60% of business sellers in Q3 2025, the demographic tailwind behind deal supply. Source: IBBA and M&A Source Market Pulse, Q3 2025 (US).
• HVAC sector transactions tracked by Capstone reached 77 deals year to date in 2025, versus 76 in the prior-year period. Source: Capstone Partners, HVAC Services M&A Update, July 16, 2025 (US).
• Among HVAC-related public companies as of June 30, 2025, services-segment operators traded at 12.2x to 17.5x EBITDA, with Comfort Systems at 17.1x and APi Group at 17.5x. Source: PKF O’Connor Davies, US HVAC M&A Update, Summer 2025 (US public markets).
• Add-on acquisitions represented 75.9% of US buyout deal count in Q2 2025 but only about 11% of buyout deal value in 2024, the structural signature of roll-ups. Source: PitchBook via Cherry Bekaert and Bain and Company, 2024-2025 (US).
• ServiceTitan reported $685M in annual recurring revenue for the twelve months ended July 2024, up 25% year over year, evidence of the software layer enabling trade-business scale. Source: ServiceTitan Form S-1, SEC, 2024 (US and Canada).
• Heating, air conditioning, and refrigeration mechanics and installers numbered about 541,070 with a mean annual wage near $68,120 in May 2025. Source: US Bureau of Labor Statistics, OEWS, May 2025 (US).
• Electricians numbered about 757,220 and plumbers, pipefitters, and steamfitters about 465,840 in May 2025, the labor base every acquirer depends on. Source: US Bureau of Labor Statistics, OEWS, May 2025 (US).
• One platform, Apex Service Partners (Alpine Investors), had rolled up more than 200 companies across 43 states generating about $2.2 billion in combined annual revenue. Source: WSJ via American Investment Council, October 2024 (US).

SDE Versus EBITDA: Why the Two Multiple Worlds Do Not Compare

The most important distinction in home services valuation is the earnings base. Small, owner-operated businesses are valued on seller’s discretionary earnings (SDE), which adds the owner’s salary and discretionary expenses back to profit. Larger businesses are valued on EBITDA, which assumes a hired manager and excludes owner add-backs. The same company will show a higher SDE figure and a lower EBITDA figure, so an SDE multiple and an EBITDA multiple are not interchangeable.

The median small business sold on BizBuySell in 2025 traded at 2.61x cash flow (an SDE-style measure) on a $350,000 median price. Source: BizBuySell Insight Report, 2025. In the IBBA and M&A Source survey, Main Street deals under $500K cleared 2.3x SDE in Q2 2025 while $5M to $50M deals cleared 5.5x EBITDA. Source: IBBA and M&A Source Market Pulse, Q2 2025. The jump from low-2x to mid-5x is partly a real size premium and partly the SDE-to-EBITDA shift; readers should not read it as a single continuous scale.

Small Business (Main Street) Multiples

This segment covers single-location, owner-operated trade businesses, typically valued on SDE. Multiples are modest and move slowly.

The 2025 BizBuySell average cash flow multiple was 2.61x, up about 1% year over year, with the average revenue multiple at 0.69x. Source: BizBuySell 2025 Year in Review. The IBBA sub-$500K median reached 2.3x SDE in Q2 2025. Source: IBBA Market Pulse, Q2 2025. What this means: a typical owner-operated HVAC, plumbing, or electrical shop with no recurring contracts and one location sits in the low-single-digit SDE range, regardless of how high headline platform multiples climb.

Lower Middle Market and Platform Multiples

Once a business reaches scale, multiple location footprint, branded operations, and recurring revenue, it moves to EBITDA valuation and a different multiple tier.

The $5M to $50M EBITDA segment traded at a 5.5x median in Q2 2025. Source: IBBA Market Pulse, Q2 2025. The $5M-$50M category was 0.8 points higher in Q3 2025 than at the start of the year. Source: IBBA Market Pulse, Q3 2025. At the top of the market, publicly traded HVAC services operators carried 12.2x to 17.5x EBITDA as of June 30, 2025. Source: PKF O’Connor Davies, Summer 2025. What this means: there is a wide gap between what a mid-sized seller receives (mid-single digits) and the public-market or platform-level multiples (mid-teens) that fund roll-up arbitrage.

Private Equity Roll-Up Activity

Home services has become a core private equity buy-and-build target. The strategy relies on multiple arbitrage: acquire smaller add-ons at low multiples and fold them into a platform that the market values at a much higher multiple.

Private equity investors bought nearly 800 HVAC, plumbing, and electrical companies between 2022 and late 2024. Source: PitchBook data cited by WSJ, October 2024. HVAC add-on activity rose 88.2% year over year through mid-2025, and financial buyers reached roughly half of HVAC sector deals. Source: Capstone Partners, July 2025. Across all US private equity, add-ons were 75.9% of buyout count in Q2 2025 but only about 11% of value in 2024. Source: PitchBook via Cherry Bekaert and Bain, 2024-2025. What this means: home services consolidation is driven by a high volume of small deals, not a few large ones, which is why so many owner-operators now receive buyer inquiries.

The Recurring-Revenue Premium

Recurring maintenance agreements (HVAC service plans, plumbing service contracts, roofing maintenance) are the most cited driver of higher multiples because they convert one-time project work into predictable, repeat demand.

The TopBuild acquisition of Progressive Roofing closed at 9.1x EBITDA in July 2025, with about 70% of revenue from non-discretionary re-roofing and maintenance. Source: Lightning Path Partners, 2025-2026. ServiceTitan’s $685M ARR (up 25% year over year, twelve months ended July 2024) shows how much recurring software and service revenue scales in the trades. Source: ServiceTitan Form S-1, SEC, 2024. Note and limitation: the widely repeated claim that a high-recurring HVAC business trades at 8x-9x versus 5x-6x for low-recurring work is an M&A adviser estimate, not a figure from a transaction registry, and the exact spread varies by adviser and methodology.

Buyer Types and Financing

Two buyer pools dominate: strategic acquirers (larger operators and consolidators) and financial buyers (private equity platforms and their add-ons).

Strategic buyers were 49.4% of HVAC sector deals year to date in 2025, down from 67.1% a year earlier, implying financial buyers rose to about 50.6% from about 32.9%. Source: Capstone Partners, July 2025. In the small-business segment, smaller PE acquisitions averaged about $1 million in price and larger deals about $20 million. Source: PitchBook via WSJ, October 2024. Sponsors typically buy add-ons in a roughly 5x-8x EBITDA range while platform-level recapitalizations clear in the mid-teens, the gap that funds the model. Source: PKF O’Connor Davies, Summer 2025 and adviser commentary (platform multiple figures flagged as estimate). What this means: the buyer mix has shifted materially toward financial sponsors in HVAC within a single year.

Sub-Sector Multiple Ranges

Multiples vary by trade and, more importantly, by the quality and recurring mix of the specific business. The ranges below are broker- and adviser-reported and should be read as indicative, not transaction-registry medians.

Roofing real-world transaction ranges run about 2.8x to 9x-plus EBITDA, with small owner-operated firms near the bottom and platform-quality operators at the top. Source: Lightning Path Partners, 2025-2026. Storm and insurance-restoration roofing revenue is discounted relative to base recurring revenue because it is unpredictable. Source: Profitability Partners, 2025. Limitation: HVAC, plumbing, and electrical sub-sector multiple ranges published by individual advisory firms vary widely by methodology, are not standardized, and should not be presented as authoritative medians; this asset reports the verified public-company and survey medians above rather than adviser point estimates as fact.

Demand and Labor Base

The underlying demand and workforce explain why consolidators value these businesses.

End customers spend about $1.5 trillion annually on trades services for homes and businesses in the US and Canada, of which ServiceTitan considers roughly $650 billion its serviceable industry spend. Source: ServiceTitan Form S-1, SEC, 2024. In May 2025, HVAC mechanics numbered about 541,070, electricians about 757,220, and plumbers and pipefitters about 465,840. Source: US BLS, OEWS, May 2025. What this means: a large, fragmented, founder-led labor and revenue base is exactly the structure that buy-and-build strategies target.

Original Synthesis

1. The SDE-to-EBITDA multiple gap. Combining the BizBuySell 2025 small-business median (2.61x SDE) with the IBBA $5M-$50M median (5.5x EBITDA, Q2 2025) shows a roughly 2.1x absolute multiple gap between the Main Street and lower-middle-market tiers. Inputs: BizBuySell 2025; IBBA Q2 2025. Logic: subtract the small-business cash-flow multiple from the lower-middle-market EBITDA multiple. Limitation: the two use different earnings bases (SDE versus EBITDA), so part of the gap is definitional and part is a genuine size and quality premium; this is a directional comparison, not an apples-to-apples spread.

2. The HVAC buyer-mix flip. Capstone’s HVAC data shows strategic buyers falling from 67.1% to 49.4% of deals in one year, implying financial buyers rose from about 32.9% to about 50.6%, a roughly 18-point swing toward private equity. Input: Capstone Partners, July 2025. Logic: financial-buyer share equals 100% minus strategic-buyer share. Limitation: this is one advisory firm’s deal sample for one trade, year to date, and may not generalize to plumbing, roofing, or electrical.

3. The arbitrage spread. Pairing the public-market HVAC services range (12.2x-17.5x EBITDA, mid-2025) with the survey lower-middle-market median (5.5x EBITDA) implies a spread of roughly 7 to 12 multiple turns between what platforms are valued at and what mid-sized add-ons sell for. Inputs: PKF O’Connor Davies, Summer 2025; IBBA Q2 2025. Logic: subtract the add-on/mid-market EBITDA multiple from the public-company EBITDA multiple. Limitation: public-company multiples reflect liquidity, scale, and diversification that private add-ons lack, so the full spread is not pure arbitrage and cannot be captured on every deal.

Tables

Sources: BizBuySell Insight Report 2025; IBBA and M&A Source Market Pulse Q2 2025; PKF O’Connor Davies US HVAC M&A Update Summer 2025. SDE and EBITDA are different earnings bases and are not directly comparable.

Source: BizBuySell Insight Report, 2025 year-end (US). All values are platform-reported small-business transactions and are not specific to home services.

Source: US Bureau of Labor Statistics, Occupational Employment and Wage Statistics (OEWS), May 2025 (US).

Charts to build

• SDE versus EBITDA multiple tiers. Data: 2.61x, 2.3x, 5.5x, 12.2x-17.5x by segment. Source: BizBuySell 2025, IBBA Q2 2025, PKF Summer 2025. Insight: visualizes the gap between Main Street and platform tiers. Citation-worthy because it corrects the common error of treating all multiples as one scale.
• HVAC buyer mix shift, 2024 to 2025. Data: strategic 67.1% to 49.4%; financial 32.9% to 50.6%. Source: Capstone Partners, July 2025. Insight: private equity crossing the 50% line in one year. Citation-worthy as a clean inflection point.
• Add-on deal volume. Data: 4,950 (2024), 4,509 (2025). Source: PitchBook via NEPC. Insight: the roll-up engine’s scale and slight cooling. Citation-worthy for showing volume, not value, drives consolidation.
• BizBuySell small-business trend. Data: median price, cash flow, revenue, multiples by year. Source: BizBuySell Insight Report. Insight: steady low-single-digit growth across all metrics. Citation-worthy as the longest consistent small-business series.
• Trades employment base. Data: electricians 757,220; HVAC 541,070; plumbers 465,840. Source: BLS OEWS, May 2025. Insight: the fragmented labor base behind consolidation. Citation-worthy as government primary data.

Methodology

Sources were selected by tier preference: government primary data (BLS, SEC filings) first, then recurring industry surveys with disclosed samples (BizBuySell Insight Report, IBBA and M&A Source Market Pulse), then named advisory and market-research firms (Capstone Partners, PKF O’Connor Davies, PitchBook as cited). Adviser point estimates for sub-sector multiples were excluded as authoritative facts and used only as clearly flagged ranges. Where SDE and EBITDA multiples appeared together, they were kept separate because the earnings bases differ. Conflicting numbers were resolved by preferring the more recent dated survey and the source closest to the original data (for example, PitchBook figures are attributed to PitchBook even when read through a secondary report). Derived figures (the SDE-EBITDA gap, the buyer-mix swing, the arbitrage spread) are simple subtractions of cited values with stated limitations. Data last updated June 2026. Limitations: broker and adviser multiples are self-reported, vary by methodology, and are not a transaction registry; survey samples are a few hundred deals per quarter; public-company multiples are not private-deal multiples.

Source Quality

Tier 1 (primary, government, regulatory filings): US Bureau of Labor Statistics OEWS (May 2025); ServiceTitan Form S-1 filed with the SEC (2024).

Tier 2 (recurring industry surveys, credible advisory and market-research firms, public-company data): BizBuySell Insight Report; IBBA and M&A Source Market Pulse; Capstone Partners; PKF O’Connor Davies; PitchBook (as cited).

Tier 3 (reputable journalism and expert commentary): The Wall Street Journal (via American Investment Council); Lightning Path Partners, Profitability Partners, and CapitalPad commentary (used only for clearly flagged ranges and secondary-cited PitchBook figures).

Most Quotable Statistics

• HVAC private equity add-on activity rose 88.2% year over year through mid-2025. Source: Capstone Partners, July 2025.
• Private equity bought nearly 800 HVAC, plumbing, and electrical companies from 2022 to late 2024. Source: PitchBook via WSJ, 2024.
• The median small business sold at 2.61x cash flow on a $350,000 price in 2025. Source: BizBuySell Insight Report, 2025.
• Progressive Roofing sold at 9.1x EBITDA in July 2025 with about 70% non-discretionary revenue. Source: Lightning Path Partners, 2025-2026.
• End customers spend about $1.5 trillion a year on trades services in the US and Canada. Source: ServiceTitan S-1, SEC, 2024.

Data Limitations

Broker- and adviser-reported multiples are not a comprehensive transaction registry; they reflect survey samples and individual firm deal flow, and methodology varies between firms. SDE and EBITDA multiples are not interchangeable, and headline sub-sector multiple ranges (for example, “HVAC trades at 8x”) are frequently adviser estimates rather than verified medians. Public-company multiples reflect scale and liquidity that private sellers do not have. Some platform-level recapitalization valuations are reported by parties to the deals and are not independently audited; this asset excludes specific named-company recap valuations that could not be verified against a primary source.

Recommended Dataset Fields

For a downloadable CSV, suggested fields: segment, trade (HVAC/plumbing/roofing/electrical/other), earnings_basis (SDE or EBITDA), median_multiple, deal_size_band, period, geography, buyer_type (strategic/financial), recurring_revenue_share, source_name, source_url, source_tier, methodology_note.

Press Summary

Home services M&A in 2025 and early 2026 ran on a two-tier valuation structure. Small, owner-operated HVAC, plumbing, roofing, and electrical businesses changed hands at low-single-digit SDE multiples, with the median small business selling at 2.61x cash flow on a $350,000 price (BizBuySell Insight Report, 2025). Larger, recurring-revenue operators in the $5M to $50M range cleared a 5.5x EBITDA median (IBBA and M&A Source Market Pulse, Q2 2025), while public HVAC services companies carried mid-teens EBITDA multiples (PKF O’Connor Davies, mid-2025). Private equity drove the activity: HVAC add-on deals rose 88.2% year over year through mid-2025 and financial buyers reached about half of HVAC transactions (Capstone Partners, 2025), part of a pattern in which investors bought nearly 800 trade companies from 2022 to late 2024 (PitchBook via WSJ). Recurring maintenance revenue remained the clearest multiple lever, though many sub-sector multiple figures are adviser estimates rather than verified medians. The data behind this summary draws on BLS, SEC filings, and recurring industry surveys, current to June 2026.

Suggested Headlines

• SDE Is Not EBITDA: The Two Multiple Worlds of Home Services M&A
• Private Equity Crossed the 50% Line in HVAC Deals in One Year
• From 2.6x to the Mid-Teens: Mapping Home Services Valuation Tiers in 2025
• The Recurring-Revenue Premium That Drives Trade-Business Multiples
• Nearly 800 Trade Companies Bought: Inside the Home Services Roll-Up

FAQ

What multiple does a small home services business sell for? The median small business sold on BizBuySell in 2025 traded at 2.61x cash flow (SDE) on a $350,000 median price. Source: BizBuySell Insight Report, 2025.

What do lower-middle-market home services companies sell for? Businesses valued at $5M to $50M traded at a 5.5x EBITDA median in Q2 2025. Source: IBBA and M&A Source Market Pulse, Q2 2025.

What is the difference between SDE and EBITDA multiples? SDE adds back owner compensation and is used for small owner-operated firms; EBITDA assumes hired management and is used for larger firms, so the two multiples are not comparable. Source: IBBA and M&A Source Market Pulse, 2025 (definitional).

How active is private equity in HVAC? HVAC private equity add-on activity rose 88.2% year over year through mid-2025. Source: Capstone Partners, July 2025.

How many trade companies has private equity bought? Investors purchased nearly 800 HVAC, plumbing, and electrical companies from 2022 to late 2024. Source: PitchBook via WSJ, October 2024.

What does recurring revenue do to valuation? Progressive Roofing, with about 70% non-discretionary revenue, sold at 9.1x EBITDA in July 2025, illustrating the recurring-revenue premium. Source: Lightning Path Partners, 2025-2026.

What do roofing businesses sell for? Real-world roofing transaction multiples span roughly 2.8x to 9x-plus EBITDA depending on quality and recurring mix. Source: Lightning Path Partners, 2025-2026 (adviser-reported range).

Who are the buyers? Strategic buyers were 49.4% of HVAC deals year to date in 2025 and financial buyers about 50.6%, a shift toward private equity. Source: Capstone Partners, July 2025.

How big is the home services market? End customers spend about $1.5 trillion annually on trades services in the US and Canada. Source: ServiceTitan Form S-1, SEC, 2024.

How many people work in these trades? In May 2025 there were about 757,220 electricians, 541,070 HVAC mechanics, and 465,840 plumbers and pipefitters in the US. Source: US BLS, OEWS, May 2025.

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