Air Pros founder on the company’s collapse 

In 2017, Air Pros was founded as a single-location HVAC business in Florida. Eight years later, the company counted over 700 employees across more than a dozen locations, serving customers in eight states. Things were good — until they weren’t.

Catch up quick: In March, Air Pros filed for Chapter 11 bankruptcy protection in the Northern District of Georgia, marking the first bankruptcy for a large-scale, residential HVAC platform formed in recent years. 

What they’re saying: “It’s kind of a shame, because in the filings, you’ll read that the company was a $25 million EBITDA business,” founder Anthony Perera tells Homepros in an exclusive interview.

• “I wasn’t in charge of the company,” he adds, referring to the period surrounding the bankruptcy process. “I don’t think it was what the company needed.”

What’s happening: In late 2021, Air Pros, operating in five states at the time, received a strategic investment from private equity firm Peak Rock Capital, aimed at supporting additional expansion. 

• Just months later, in March 2022, Perera stepped down as CEO, though he remained on the company’s board. (He declined to comment on specifics.)
• Later that year, Air Pros initiated a sale process; however, nothing materialized, as the “debt market kind of went sideways,” Perera says, referring to the Federal Reserve’s interest rate hikes, “and everybody was afraid to finance the deal.”
• Instead of a sale, the company refinanced its debt with a credit facility from fixed-income giant PIMCO.

Follow the money: “That debt facility they put in place was common to any other platforms at the time,” Perera notes. “I can tell you we were underlevered, even when they filed, compared to some of the other platforms that exist right now.” (The facility’s details remain undisclosed, and representatives for PIMCO didn’t return a request for comment.)

Zoom in: Following a roughly 15-month acquisition streak, according to Air Pros’ bankruptcy filing, which didn’t clarify the exact timestamps, the business faced a series of challenges, which ultimately led to underperformance. 

• “For example, each business unit has an individualized operating model, which leads to a lack of controls, different operating philosophies and margins, and a lack of economies of scale,” Andrew Hede, the company’s Chief Restructuring Officer, wrote in March. 

Yes, but: “I don’t think the business underperformed at all,” Perera says. “And I don’t think we had a lack of controls… I think we had plenty of controls.”

• “The business suffered a bit from a topline revenue perspective while the management team was focused on doing the integrations,” he adds.
• “We weren’t necessarily driving topline revenue. We were trying to increase gross margins. So there was some revenue compression, [but] it wasn’t massive. I think we were down eight or nine points.”

Go deeper: Air Pros in 2023 ran into what Perera calls a “compliance issue” related to its credit facility, and the board, under lender pressure, he says, “decided to take the business back to market against my wishes.”

• “I was like, ‘We just came out of a process. It’s not the right time to go to market. Let us finish integrating these businesses,’” he notes. 
• “They kept saying to us, ‘Let’s keep operating. Let’s improve performance… We’re going to amend and extend [the facility],’” he adds. “That’s not what happened.”

Of note: While Hede wrote that the company’s “level of indebtedness” had ultimately resulted in defaults, Perera says that while he was on the board, “We never missed a single interest payment… Nothing was ever in a cash crisis.”

• At the time of filing, the company’s total debt burden exceeded $250 million.
• “Was our cash flow constricted by our leverage? I think that’s a true statement,” he adds. “I don’t think that was the only catalyst for the catastrophic implosion that was caused by their actions.”

After the 2023 sale process failed to materialize, Perera was officially removed from the company’s board in January 2024, and a subsequent evaluation determined that a break-up sale was the best path forward. 

• Earlier this year, as part of the process, each of Air Pros’ business units was acquired, including by Perera’s investment firm, Exuma Capital Partners.

Zoom out: While each seller’s rollover equity was zeroed out in the bankruptcy process, “I saw a lot of people online talking about how these sellers made no money,” Perera says. 

• “But there’s not a single seller who didn’t make real money on these transactions,” he adds. “We deployed over $100 million that went to these sellers [up front].”

The big picture: In another world, “I wouldn’t have stepped down as CEO,” Perera notes. “I probably would have pulled the process when rates started going nuts and just slowed down, [and] taken a more aggressive stance being on the board with the way the lenders were acting.”

Looking ahead: Exuma Capital Partners purchased Air Pros’ legacy, Florida-based business, which was “neglected during the integration phase because it was such a small piece of the company,” Perera says. 

• “I know how powerful this business can be. We’ve already grown it by 20 percent,” he adds. “We’re doing the things we know how to do. We have a great team in place, [and] our strategy is to keep executing.”