Home services M&A volume slows this year: Report

An October report from investment banking firm Capstone Partners found that M&A volume in the home services sector has slowed this year, compared to last year. 

What’s happening: The firm’s inaugural ‘Residential Services’ report counts 223 transactions announced or completed this year through July 27 across the HVAC, plumbing, and electrical industries, as well as landscaping, roofing, and garage doors, among others, based on sources including Capital IQ, FactSet, and PitchBook.

• That’s down from 257 transactions during the same period in 2025, according to the report. 
• While there’s still strong buyer demand for home service businesses, “years of consolidation (and dozens of existing sponsor-backed platforms competing for add-ons) have made new platform formation increasingly challenging,” it says. 

Zoom in: HVAC, plumbing, and electrical transactions totaled 43 over that span, per the report, up from 21 during the same period in 2025 — and within striking distance of the 51 recorded in full-year 2022.

• Of note: The report doesn’t specify whether that count includes only add-ons — platforms buying contractors — or also platform-level deals. 

Between the lines: The availability of skilled labor has remained the home service industries’ most “significant constraint,” the report says. 

• The supply of HVAC technicians met just 63.8 percent of demand in 2024 and is expected to slide to 62.9 percent in 2029, it adds, citing a May report by TechForce Foundation that compared the number of students completing technical schools and community colleges in a year with the number of annual job openings based on Bureau of Labor Statistics data. 
• Accordingly, contracting businesses that have institutionalized recruiting, training, and technician retention are particularly attractive to buyers. 

Yes, and: Buyers are also concerned about whether customer relationships and technician retention remain concentrated with the founder. 

• “Businesses whose relationships transfer cleanly to an acquirer have commanded premium valuations and carried lower post-close risk,” the report notes. 

What they’re saying: Philip Krieger and Brad Goldstein, managing director and director of consumer investment banking at Capstone Partners, respectively, contributed to the report. 

• “The HVAC market has evolved considerably as institutional capital has entered the category and private equity-backed platforms are scaling, but we believe the next chapter will increasingly favor operators that can demonstrate quality of growth rather than growth at any cost,” they told Homepros via email.
• “For privately owned HVAC companies, that means strong technician retention, disciplined pricing, recurring maintenance relationships, and an ability to capture more of the customer’s wallet across repair, replacement, and adjacent services,” they added.  
• “Businesses that can pair those fundamentals with an authentic local brand should continue to command significant attention from buyers.” 

Go deeper: Full report