The PE Wave Is Coming for Trades Businesses

Over the past five years, private equity firms have poured billions into trades businesses — HVAC, plumbing, electrical, pest control, landscaping. The playbook is the same every time: acquire a strong regional operator, use it as the platform company, then bolt on smaller competitors at lower multiples to build a regional or national brand.

If you own one of those smaller competitors, you have more options today than you did a decade ago. The question is whether you are positioned to take advantage of them.

What Multiples Look Like Right Now

Valuation in the trades space is almost always expressed as a multiple of EBITDA — earnings before interest, taxes, depreciation, and amortization. That number is the most important figure in your business if you ever plan to sell.

For trades businesses in the $3M–$15M revenue range, EBITDA multiples typically fall between 4x and 7x depending on several factors: recurring revenue (service agreements, maintenance contracts), management depth, customer concentration, geographic market, and whether the owner is operationally dependent.

A well-run HVAC company doing $1.5M in EBITDA with a strong service agreement base and a management team that does not require the owner on every job can realistically fetch 6x–7x — a $9M–$10.5M exit. The same company where the owner is answering service calls and approving every purchase order? More like 4x–4.5x, if a buyer wants it at all.

The difference between those outcomes is not the revenue. It is how the business is built.

How to Position for a Premium

PE buyers are not just buying revenue. They are buying a business that can operate and grow without you. That means three things need to be true.

Clean financials. Buyers will do a quality of earnings review — a deep dive into your books. If your financials are messy, inconsistent, or commingled with personal expenses, that creates risk in the buyer's mind and kills price. Clean, auditable, GAAP-adjacent books are a prerequisite for premium pricing.

Recurring revenue. Service agreements, maintenance contracts, and annual memberships all signal predictable future cash flow. A business where 40%+ of revenue is contracted recurring is dramatically more attractive than one that starts from zero every January. If you do not have a service agreement program, building one in the next 12–18 months could be the highest-ROI thing you do.

Management depth. Can your business run for 90 days without you making a single decision? If not, a buyer sees key-person risk — and they discount for it. Building a layer of operational leadership before you go to market is not just smart exit planning; it is what makes a business worth owning.

None of this happens overnight. The businesses that sell at 6x+ are the ones that started thinking about it two or three years before they were ready to sell.

You Do Not Have to Sell — But You Should Know Your Options

Not every trades owner wants to sell to PE. Some want to pass the business to a family member or key employee. Some want to keep running it for another decade. That is completely valid.

But here is the thing: the steps you take to make a business sellable at a premium are the same steps that make it run better, more profitably, and with less dependence on you personally. Exit planning is really just good business building with a clear end goal in mind.

Whether you want to sell in two years or never, knowing what your business is worth — and what would make it worth more — is information every owner should have. Our exit planning services start with exactly that conversation.

The Window Is Open — For Now

PE activity in the trades space has been elevated for several years, driven by low interest rates and a fragmented market. Rates have moved. Capital is more expensive. But strategic buyers — PE-backed platforms looking to add geographic coverage — are still buying, and they are still paying reasonable multiples for the right businesses.

The window is not closing tomorrow. But it is not going to stay open indefinitely either. If an exit is on your five-year horizon, the time to start preparing is now.