How much is an HVAC company worth?

HVAC companies typically sell for between 3x and 7x EBITDA, with well-run residential service businesses in strong markets trading toward the top of that range and above.

The most important factor in where you land is your service mix, meaning what percentage of your revenue is coming from service and replacement work versus new construction, commercial, or multifamily. Additionally, multiples can expand based on higher EBITDA levels and market dynamics.

A well-run HVAC business operating in a major metro with a large addressable customer base is going to attract more buyers and stronger offers than an identical business in a smaller market. More buyer interest means more competition, and more competition is what moves multiples toward the top range.

To put some real numbers around it: a residential service and replacement business in a mid-to-large market generating $750,000 in EBITDA could reasonably expect to trade in the 5x to 7x range today, putting the value somewhere between $3.75 million and $5.25 million.

A business doing similar revenue but with heavy new construction exposure might trade closer to 3.5x to 4.5x. It could have the same profits but a very different outcome depending on where the revenue is coming from.