Roofing Contractors

The roofing industry is seeing a surge of business buying activity. Entrepreneurs love businesses that focus on commercial roofing in particular as well as more routine residential roofing companies. Mills Snell is a good example of the former. He’s one of the cohosts of Acquisitions Anonymous and the recent owner of a large commercial roofing company in South Carolina. Roofers who partner heavily with new home builders are slightly less “hot” at the moment as people wait to see what happens to the economy.

HVAC Install & Maintenance

HVAC is seeing a lot of M&A activity. There are a number of larger institutional investors rolling up HVAC companies, which is causing a lot of solopreneurs to look at buying and scaling an HVAC company to ultimately sell to private-equity. While HVAC checks the boxes of strong margins, low customer concentration and being recession resistant, many states require owners of HVAC businesses to have licenses.

Electrical Contractors

Similar to HVAC, the electrical industry is seeing aggressive roll-up strategies. The one consideration with electrical is the shortage of quality electricians. This means that businesses who already have strong crews are well positioned to sell at higher multiples.

Tree Services

Recent players in the tree services industry such as Kaustubh Deo and Kevin Halbert have drawn attention to the arborist industry. While these businesses often lack true recurring revenue, they do often see re-occurring revenue from customers need tree work done each season and commercial property owners looking for a long-term vendor for their trimming, hedging and treatment needs.

Landscaping

The landscaping industry is popular due to tailwinds of industry growth and the ability for a new owner to aggressively grow sales. Commercial landscaping operations are particularly popular. Mike Botkin is a well-known SMB operator who runs a commercial landscaping roll-up called Benchmark with a presence across the Southeast.

Automotive Repair

In the automotive industry, there are two areas of consolidation: general auto repair and collision repair. General auto repair is seeing operators consolidate independent auto repair shops into trusted brands, such as Yinon Weiss’s Stree-Free Auto Care. Collision repair is seeing similar dynamics to the HVAC industry, where operators are rolling up collision repair shops to sell to larger PE players.

Pest Control

The pandemic saw an explosion in the pest control industry with many larger independent firms selling to private equity groups consolidating the industry. While the multiples are quite high, it’s still a very popular industry to buy in given how recurring and stable the revenue is. On the topic of recession resistant, there’s not much better than a business that fights pests.

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