Plumbing, heating, and air-conditioning will always be essential, and private equity investors are scooping them up, making some mom-and-pop entrepreneurs millionaires.
The Wall Street Journal reports that PE firms have been buying home-services firms like HVAC (heating, ventilation, and air conditioning) and plumbing and electrical companies from small family operators, hoping to profit by running larger, more profitable operations.
According to data from PitchBook, private equity investors have purchased nearly 800 HVAC, plumbing, and electrical companies since 2022—only counting the biggest deals that have actually been reported. This new investment trend is making the skilled trades a more attractive career path for a sector that already offers solid hourly wages for workers without college degrees.
The investors’ strategy to buy and combine businesses to create larger players and improve their margins by adding managerial know-how, back-office efficiency, and beefed-up marketing and recruiting budgets has also enticed many of the entrepreneurs selling their businesses to stay with the company and find ways to grow. Workers also benefit, often acquiring a 20% pay bump in the first year after a company is sold, mostly through a combination of higher wages, bonuses, and commission.
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