SMB Manual — Issue 041
Private equity slowed its pace this quarter. Independent sponsors moved in.
The math on a $2M EBITDA shop changed more than most owners realize.
August 4, 2026 · 9 min read · By the SMB Manual Desk
Sponsors who were paying 6.5x EBITDA for platform-quality HVAC
businesses eighteen months ago are now underwriting closer to 5.2x — and
in secondary markets, some deals are closing under 5x for the first time
since 2021. The shift isn't about demand disappearing. It's about who's
doing the buying.
Institutional roll-ups pulled back as debt costs stayed elevated through the
first half of the year. In their place: a wave of independent sponsors and
first-time buyers using SBA 7(a) financing, who are far more sensitive to
seller financing terms than to headline multiple.
of HVAC deals under $3M in trailing EBITDA that closed this quarter included
some form of seller note — up from 41% a year ago.
That's the number that matters more than the multiple. A seller willing to
hold 15–20% on a note is closing faster and, in several cases we reviewed, at
a higher effective price than one insisting on an all-cash close.
"The multiple is the headline. The terms are the deal."
We spoke with three brokers active in the Southeast and Midwest to
understand how this is playing out on the ground.
A sample of recent transactions we tracked this week, drawn from broker
disclosures and buyer interviews. Deal terms are approximate where not
publicly confirmed.
Coastal Air Mechanical (Charleston, SC) $1.8M EBITDA · Residential HVAC 5.1x
Midwest Comfort Systems (Peoria, IL) $2.4M EBITDA · Commercial + Residential 5.6x
Sunbelt Air Group (add-on, undisclosed platform) $3.1M EBITDA · Residential HVAC 6.0x
This week we're following up with the buyer behind Coastal Air Mechanical —
a first-time acquirer who closed using SBA debt plus a 15% seller note,
twelve months after starting his search.
Multiples by trade, trailing twelve months, based on deals we tracked with
disclosed or reliably estimated terms:
SMB Manual — Free, Weekly
One email a week. Terms, multiples, and the deals behind them.
A practical note for owners weighing a sale this year: multiple compression
doesn't have to mean a lower price. It means the terms of the deal are doing
more of the work. Before you go to market, model three scenarios — all-cash
at today's multiple, a 15% seller note at a higher multiple, and an earn-out
structure — and compare net present value, not just the headline number.
A private equity operating partner's breakdown of why technician retention
not customer acquisition, is the binding constraint on HVAC roll-up growth
this cycle. Worth the twenty minutes if you're underwriting a platform in
the trades.
This section is reserved for anonymized financials from operators willing to
share what a real deal looked like, start to finish. If you'd be willing to open
your books for a future issue, reply to this email.
