Northeast Florida Commercial HVAC Company

$5.0M

Revenue

$1.8M

SDE

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Full Editorial Writeup

This is a longstanding commercial HVAC business operating in Northeast Florida, generating roughly $5.0M in gross revenue and $1.78M in owner cash flow (SDE). That is a 36 percent SDE margin, which is exceptional for a trades business and signals either strong service/maintenance contract density, pricing power, or both. With 28 full-time employees and only a 7,500 SF leased facility, this is a labor-driven field services operation rather than an asset-heavy one.

The business focuses on the commercial side of HVAC, which generally means recurring maintenance agreements, planned replacements, and project work for property owners, facilities managers, and commercial tenants. Commercial HVAC tends to be stickier and higher-margin than residential because building owners cannot let climate control fail in occupied space, and maintenance contracts create predictable, recurring revenue that survives downturns.

The seller is retiring and is running a tight, disciplined process. The listing is SBA qualified up to $8MM but the seller will not entertain SBA buyers, requires proof of funds with all offers, will not pass any IOI under $7MM in the first round, and has set IOIs due 6/30/2026. That framing implies an asking range north of $7MM, which on $1.78M SDE is roughly a 4x multiple before adjustments.

Why we like it

Earnings quality is the headline here. A 36 percent SDE margin on $5M of revenue ($1.78M SDE) is well above typical HVAC norms, which usually run 10 to 20 percent. That kind of margin in a trades business almost always means high-value commercial contracts, recurring maintenance revenue, and disciplined pricing rather than low-margin install churn.
Commercial HVAC is genuinely durable demand. Buildings need climate control to remain occupiable, and maintenance contracts plus emergency repair work continue regardless of the economic cycle. This is non-discretionary infrastructure spend, not a nice-to-have that gets cut first in a downturn.
Florida tailwinds are real and structural. The state has relentless population and commercial real estate growth, brutal year-round cooling demand, and aging building stock that needs constant service and replacement. That is a steady stream of both recurring service and project revenue.
The asset-light model means returns compound on labor and contracts, not capital. With only $670K in FF&E, $35K inventory, and a small leased 7,500 SF facility, almost all the cash flow drops through rather than being consumed by heavy equipment reinvestment. The 28-person team also signals the owner is not the sole producer.

How to improve it

Audit and expand the recurring maintenance contract base in the first 90 days. Commercial HVAC value lives in planned maintenance agreements, so map exactly what percentage of revenue is contracted versus one-time project work. Converting more transactional accounts onto annual service agreements raises both stability and exit multiple.
Implement service software and dispatch optimization if not already in place. Tools like ServiceTitan or BuildOps tighten technician utilization, surface upsell opportunities on every visit, and create the operational reporting a 28-person field team needs to scale without margin slippage.
Push price on renewals and new contracts. A 36 percent margin shows pricing power already exists, but trades businesses chronically underprice maintenance renewals. A disciplined annual escalator and clear scope tiering can add meaningful margin with minimal customer attrition.
Build a formal sales function for commercial replacement and retrofit projects. Replacement of aging rooftop units and building automation upgrades are high-ticket, high-margin jobs. A dedicated estimator/salesperson targeting property managers and facility teams can grow the highest-value revenue line.
Address technician recruiting and retention proactively. The single biggest constraint on a field services business is labor, so build an apprenticeship pipeline and retention incentives before the retiring owner leaves. Locking in the crew protects both revenue and the value of the deal.
Document and de-risk owner dependence. The seller is retiring and only 4 weeks of training is offered, so identify which customer relationships, vendor terms, and bidding knowledge live in the owner's head. Build a service manager or GM into the org chart to transfer that institutional knowledge before close.

Diligence notes

Scrutinize the SDE add-backs aggressively. A 36 percent margin is excellent but unusual for HVAC, so verify the $1.78M cash flow figure is real owner earnings, not inflated by aggressive add-backs, one-time projects, or under-stated owner compensation given the 28-person headcount. Demand 3 years of tax returns and a quality-of-earnings level review.
Map revenue concentration by customer and by job type. Determine what share comes from recurring maintenance contracts versus large one-time installs or a handful of big commercial clients. Heavy concentration in one or two accounts or a single lumpy construction project changes the durability and the multiple.
Confirm the lease and facility terms carefully. The 7,500 SF building is leased at $5,000/month through 05/13/2030, so verify renewal options, escalators, and whether the landlord is related to the seller. A below-market related-party lease can quietly overstate true earnings.
Evaluate the team and licensing transfer risk. HVAC requires a qualifying license holder, so confirm whether the master license is held by the retiring owner or a retained employee. If it leaves with the seller, the business cannot legally operate, and that is a deal-breaker until resolved.
Pressure-test the pricing and deal structure. The seller will not pass IOIs under $7MM, which is roughly 4x SDE, and refuses SBA buyers while requiring proof of funds. Understand why SBA is excluded since it can hint at verification issues, and model the all-cash and seller-note terms the seller will actually accept.

Source

Originally listed on BizBuySell. View original listing →