HVAC Distribution Company, Two-Location Miami Wholesaler

$33.0M

Revenue

$3.3M

SDE

9.1x

Multiple

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Full Editorial Writeup

This is a two-location HVAC parts and equipment distributor operating out of the Miami-Dade market, doing $33M in annual revenue on roughly 10% net margins for $3.3M of EBITDA. The business functions as a wholesale supply channel for local HVAC contractors, holding inventory across two warehouse hubs and getting product into installers' hands quickly. It runs lean with 21 full-time employees and a warehouse-and-delivery infrastructure that includes forklifts, order pickers, dock equipment, delivery vehicles, and inventory tracking software.

The value proposition is being the just-in-time warehousing backbone for contractors who do not want to carry deep inventory themselves. Distribution is a real business model with genuine switching friction: contractors buy where they can get parts today, and relationships plus stocking depth create stickiness. The listing leans hard on the A2L refrigerant transition, a regulatory mandate phasing out R-410A that is forcing an equipment replacement cycle and pushing average unit prices up, which should be a near-term tailwind for volume and dollar-per-order.

The framing is aggressively PE-pitched, positioning the business as a roll-up anchor or bolt-on for a national consolidator. What matters more is the underlying math. At a $30M ask on $3.3M EBITDA, this is a 9.1x multiple, which looks rich on paper, but the ask includes the real estate for the two distribution hubs, so the effective multiple on the operating business is lower once you carve out the property value. The story is fine; the price, and how it splits between real estate and the business, is the whole conversation.

Why we like it

Earnings quality is straightforward wholesale distribution with $3.3M EBITDA on $33M revenue and a consumption-driven customer base. Contractors reorder constantly because parts and equipment are working capital for them, which produces repeat purchasing rather than one-off transactions. The 10% net margin is honest for distribution and not dressed up as SaaS-like economics.
The moat is real if modest: being the local stocking source for contractors creates switching friction because installers value immediate availability over shaving a few points on price. A diversified supplier and manufacturer base reduces single-brand dependency and insulates the business from any one OEM pulling its line. This is the boring, durable kind of distribution that keeps grinding out cash through cycles.
Market tailwinds are genuine here. The A2L refrigerant regulatory transition is forcing an equipment replacement cycle across the installed base, and higher-GWP-compliant units carry higher average selling prices, which mechanically lifts revenue per order. HVAC demand in a hot, humid, growing Florida market is about as non-discretionary as home services gets.
Operator advantage is clear for a strategic or a hands-on buyer. A national consolidator gains instant Miami market share, and an operator can add a digital ordering portal, expand product lines into IAQ and refrigeration, and replicate the two-branch model into adjacent metros. The infrastructure and warehouse team are already in place to absorb volume.

How to improve it

Push hard on price before anything else. A 9.1x EBITDA multiple on a two-branch, 10%-margin distributor with 21 employees is a full number, and comps for regional HVAC distribution rarely support this without recurring contract revenue or owned real estate in the deal. Anchor negotiations closer to 5x to 6x on normalized EBITDA and structure the gap with a seller note or earnout tied to the A2L cycle holding up.
Launch the B2B online ordering portal in the first 90 days. Contractors placing repeat orders will self-serve nights and weekends, which lifts wallet share and reduces the labor cost of phone-and-counter order-taking. This is the single fastest lever to grow revenue per customer without adding headcount.
Run a margin analysis by SKU and by customer to find the profit leaks. In distribution the top-line looks great but the money is made on mix and on disciplined pricing to the smallest, stickiest accounts. Tighten pricing on low-volume commodity SKUs and reward high-frequency contractors with tiered terms rather than blanket discounts.
Expand into higher-margin adjacent product lines: indoor air quality systems, commercial refrigeration, and smart thermostats. These attach naturally to the existing HVAC order and carry better gross margins than base equipment. Cross-selling into an existing contractor base is far cheaper than acquiring new customers.
Optimize working capital, which is the hidden lever in any distribution buy. Audit inventory turns by branch, kill slow-moving dead stock, and negotiate better payment terms with the diversified supplier base to free up cash. Every point of inventory efficiency drops straight into owner returns given how much capital sits in the racks.
Build a formal outside sales function targeting mid-size contractors currently buying from national chains. Two hubs give a delivery radius advantage on speed, and a dedicated rep program can convert accounts that value same-day availability. Track win rates and reorder frequency to prove the ROI before scaling headcount.

Diligence notes

Confirm the split of the $30M ask between the real estate and the operating business. The sale includes the real estate for the two distribution hubs, so get an independent appraisal of the property and back it out to see the true multiple you are paying on cash flow. This materially changes the effective operating multiple and your capital stack.
Scrutinize the EBITDA quality and whether $3.3M is normalized or owner-adjusted. Ask for three to five years of tax returns and financials to verify margin stability and confirm the '10% net margin' is EBITDA after real market wages, not owner add-backs. Distribution numbers can look consistent until you separate one-time A2L price spikes from durable baseline demand.
Stress-test the A2L tailwind narrative. A forced replacement cycle boosts near-term average unit value, but that pull-forward can normalize or reverse once the transition matures, so understand how much of current revenue is cyclical uplift versus sustainable run-rate. Do not underwrite the price on a temporary regulatory bump.
Examine customer and supplier concentration in detail. The listing claims diversification, but ask for revenue by top ten contractors and gross profit by top supplier to verify no single account or manufacturer line dominates. Distribution moats evaporate fast if two or three big contractors leave or a key OEM opens its own local branch.
Assess the founded-in-2015 age against the 'established market leader' claim. A roughly ten-year-old distributor doing $33M is a solid growth story, but 'dominant regional player' is marketing language that needs verification against actual market share and competitor set. Validate the moat with real customer retention data rather than the listing's adjectives.

Source

Originally listed on BizBuySell. View original listing →