HVAC & mechanical services
A maintenance base is what separates a platform from a contractor, and the two are priced nothing alike.
Buyers in mechanical services are almost always building density in a geography. They underwrite recurring service revenue first, new construction last, and they verify the maintenance base contract by contract before they price it.
Who acquires in this sector.
The buyer set determines the process. These are the parties we approach on a mandate here, and the reason each of them pays.
What moves the number, and what moves it back.
Both lists are what buyers in this sector actually examine. The first is where preparation earns its return. The second is where processes lose ground once diligence opens.
What lifts the multiple
Worth fixing twelve to twenty-four months before you go to market.
- The maintenance agreement baseContract count, renewal rate and average value. This is the first thing a buyer asks for and the last thing they discount.
- Service mix over new constructionService and replacement revenue is recurring and higher margin. New construction is neither.
- Technician headcount and licence coverageIn a market where labour is the constraint, a retained, licensed crew is a large part of what is being bought.
- Commercial contracts with escalatorsMulti-year agreements that reprice with cost are worth materially more than annual handshakes.
- Density in a defined geographyRoute efficiency and brand position in one market beat thin coverage across several.
What gets discounted
Found in diligence if it is not addressed first, and repriced when it is found.
- New-construction dependencyCyclical, lower margin, and tied to a pipeline the buyer cannot control.
- The owner still selling and estimatingIf pricing judgment sits with you, the buyer is acquiring a transition problem.
- Technician attritionCrew turnover is diligenced directly, because replacing the crew is the buyer's real cost.
- Unbilled warranty and callback exposureRework carried informally shows up in the quality of earnings.
- Deferred fleet and equipment capexAn ageing fleet is a price adjustment, not a rounding error.
How a process runs here.
Preparation is unusually mechanical here, and unusually effective: clean the maintenance agreement file, convert what can be converted onto multi-year terms, move estimating and pricing off the owner, and document technician certifications. Each of those is verifiable, which is exactly why buyers pay for them.