Valuations

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January 18, 2025

by a searcher from Northwestern University - Kellogg School of Management in Fort Lauderdale, FL, USA

Anyone seeing multiples on home services softening?

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Reply by a searcher
from Harvard University in Fort Lauderdale, FL, USA
Hey Joe, I'm across the street in Fort Lauderdale. In HVAC, I wouldn't say we're seeing multiples softening, but I would say that buyers are becoming more discerning on the quality of the assets. Multiples for good assets are strong but multiples for less desirable home services companies are falling (or finding it harder to transact at all). It used to be the case that as long as the listing said "HVAC" then it would get a 5x multiple. Now, if it's new construction, heavily reliant on GC relationships, or even commercial-focused business we're seeing multiples as low as 2x. The residential recurring revenue HVAC business with strong management still commands the 5x. But the rest does not. And that is a change from as little as a year ago.
commentor profile
Reply by a professional
from Northwestern University in Chicago, IL, USA
Depends where but yes in tertiary markets. Roofing company if you consider that home service and not construction I’ve seen for 2.5-3X on $1MM+ EBITDA. All depends if you’re willing to live in those geographic areas before establishing a strong team which takes time.
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