Redwood Services to land majority investment in $1.1 billion deal

HVAC, plumbing, and electrical platform Redwood Services is set to receive a majority investment from Toronto-based private equity firm Altas Partners, valuing the company at around $1.1 billion, according to people familiar with the matter.

Why it matters: The deal will mark the second major home services platform transaction in the past nine months, following Goldman Sachs’ private equity arm’s late-2024 investment in Sila Services. 

What’s happening: Redwood tapped investment bank Piper Sandler to run its sale process earlier this year and reported trailing-twelve-month EBITDA of roughly $65 million, the people said, requesting anonymity as the matter is confidential. The valuation represents a multiple of about 17x EBITDA. 

Zoom out: Founded in 2020 and based in Memphis, Tennessee, Redwood has partnered with 18 contracting businesses across the U.S., collectively serving 200,000 customers a year, and generates over $500 million in annual revenue.

• The company is backed by Union Main Group, a privately held investment firm founded by Adam and Marc Hanover, along with William Conway Jr., who co-founded Carlyle, one of the world’s largest investment firms. 

The big picture: Redwood is one of 27 sponsor-backed home services platforms that either formed or participated in a transaction between 2019 and 2021, according to an HVAC industry report viewed by Homepros, signaling potential similar transactions ahead, given private equity firms’ typical hold period of three to seven years.

What’s next: Redwood’s leadership will continue to run the company, with current stakeholders, including Union Main, expected to retain minority stakes, sources say, adding that, pending regulatory approval, the deal is expected to close by the end of June. 

• Representatives for Redwood Services and Piper Sandler declined to comment, and Altas Partners didn’t return a request for comment.

Editor’s note: The annual revenue figure in this story has been updated to reflect an announcement from Redwood Services.