If you own an HVAC, plumbing, electrical, fire protection or other trade business, you may have been contacted by private equity-backed groups. Here's how that path compares with selling to a local buyer.
How PE roll-ups typically work
A private equity firm backs a "platform" company and buys smaller "add-on" businesses. Offers often combine cash at closing with earn-outs (payments if targets are hit) and rollover equity (you keep a minority stake in the bigger company that may pay out if it's sold later).
Possible advantages
- Potentially high headline valuations for larger, well-run businesses.
- Rollover equity can add upside.
- Resources for growth.
Things to watch
- Earn-outs and rollover equity are not guaranteed; understand exactly how they're calculated and controlled.
- Your brand, systems and team structure may change after integration.
- Formal diligence, quality-of-earnings reviews and longer legal documents.
- Many groups focus on businesses above a certain size.
How a local direct buyer typically works
- Simpler structure, more cash-focused, with optional seller financing.
- Direct conversation with the decision-maker.
- Focus on keeping your name and team in place.
- Flexibility on real estate: buy it or lease it back.
Comparing offers
Compare cash at closing, the realistic value of contingent payments, your required role after closing, what happens to employees and your name, and timeline. Have your attorney and CPA model the after-tax result of each.
We're happy to give you a straightforward offer to compare against any other.
This guide is general information, not legal, tax or financial advice. Consult your own attorney and CPA.