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, based on a multiple of roughly 11x its annualized EBITDA of around $20 million, according to people familiar with the matter, who spoke on the condition of anonymity as the financials are confidential.

• 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. 
• Investment bank Piper Sandler advised on the deal. 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 annualized 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.