Redwood Services buys five-contractor group for $220 million

Residential HVAC, plumbing, and electrical platform Redwood Services has acquired a group of five contracting businesses from investment firm SE Capital, the company announced Monday morning.

What’s happening: The transaction values the group — anchored by Las Vegas-based Sierra Air Conditioning & Plumbing — at about $220 million, according to people familiar with the matter, who spoke on the condition of anonymity as the financials are confidential.

• The valuation represents a multiple of roughly 11x on around $20 million of EBITDA, according to one of the people, while another source placed the figures at roughly 13x on approximately $17 million.
• The deal pushes Redwood’s total annualized EBITDA to “over” $100 million, one of the people said, without specifying — and its total number of contractor partners from 19 to 24 across the U.S., excluding tuck-in acquisitions. 
• A representative for Redwood declined to comment.

Zoom out: Based in Chicago, SE Capital acquired Sierra in January 2020, which included both a residential new construction division and a service and replacement division, according to a news release. In March 2025, SE sold the new construction division to Airtron, while retaining its service and replacement business. 

• Also part of Monday’s deal — and SE’s group — are Denver-based Brothers Plumbing, Heating, & Electric; Tucson-based Pioneer Plumbing and Russett Southwest; and Idaho-based Ultimate Heating & Air, bringing Redwood into three new markets: Las Vegas, Denver, and Boise.
• The announcement comes one year after Redwood received a majority investment from Toronto-based private equity firm Altas Partners in a deal that valued the company at around $1.1 billion, as Homepros previously reported. 

Why it matters: While history may not repeat itself, it often rhymes: In industries where private equity-backed platforms consolidate individual businesses, the platforms themselves eventually consolidate. 

• Monday’s deal marks just the second platform-buys-platform transaction among today’s residential HVAC, plumbing, and electrical platforms, following Apex Service Partners’ acquisition of Frontier Service Partners in January 2024. 
• It’s also the larger of the two from an acquired-EBITDA standpoint, as Frontier counted roughly $15 million of EBITDA at the time, according to two people with knowledge of the transaction. 
• The deal could serve as a springboard for similar transactions going forward, sources say. 

Looking ahead: RJ Magee, who currently leads the Sierra Platform, will join Redwood as Senior Vice President of Operations, overseeing the integration of the incoming companies. 

• “Over the years, I’ve seen firsthand the strength of the Sierra Platform businesses and the pride the teams take in serving their local communities,” Magee said in a statement. 
• “Joining Redwood creates an opportunity to build on that foundation with additional resources and support, while preserving the local leadership and culture that made these businesses successful,” he added.

Editor’s note: This article has been updated with additional reporting regarding the purchase multiple and EBITDA figure.