The residential services sector is experiencing a surge of buyer interest, and for good reason. In this episode of The Founder’s Journey to Exit, Evergreen Managing Director Roy Yewah joins host Hannah Huke to break down why HVAC, plumbing, electrical, roofing, landscaping, pest control, and similar businesses are in such high demand — and how owners can capitalize on this moment.
You can listen to the full episode on Apple Podcasts, Spotify, or Buzzsprout.
As Roy explains, residential services businesses “check a lot of boxes for buyers.” Demand is non-discretionary — “no matter what the economy is doing, good or bad, people need heat, water, power, and a safe home.” When that demand is paired with recurring maintenance plans and repeat customers, buyers see stability, predictability, and strong cash flow. Add in the fact that the industry remains highly fragmented, and the opportunity for roll-ups becomes even more compelling.
What Buyers Are Really Looking For
Valuations start with adjusted EBITDA or seller’s discretionary earnings, but buyers quickly look deeper. According to Roy, consistency is critical. Buyers assess revenue stability, gross margins, labor efficiency, technician utilization, pricing history, and customer concentration to understand both risk and scalability.
Smaller operators are not left out. Roy notes that buyers are actively targeting businesses in the $500,000 to $5 million EBITDA range, particularly as add-on acquisitions. He also highlights that companies with a mix of residential and commercial customers — or even a heavier commercial tilt — are often “being bought at a premium.”
Valuation Ranges and Market Tailwinds
Multiples vary by size, but interest across the sector remains strong. Roy explains that businesses under $1 million in EBITDA often trade between three to five times EBITDA, while those between $1 million and $3 million can see four to seven times EBITDA. Larger operators may command even higher multiples depending on scale and structure.
Several trends continue to support these valuations:
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Aging housing stock across the U.S.
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Infrastructure investment and ongoing construction
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Labor shortages driving professionalization
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Continued private equity capital flowing into the space
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Increased adoption of CRMs, dispatching software, and dynamic pricing
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Energy efficiency and electrification incentives
Preparing for a Strong Exit
Reputation matters deeply in residential services. Roy emphasizes that many businesses grow through word of mouth, not heavy marketing spend, making reviews and customer trust especially important during diligence.
Preparation, however, is what separates good outcomes from great ones. Buyers favor companies that can operate without heavy owner involvement and sustain growth post-transaction.
Key areas owners should focus on include:
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Cleaning up financials with proper monthly reporting and add-backs
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Reducing owner dependency by empowering managers and documenting processes
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Building recurring revenue through maintenance plans
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Retaining talent through incentives and clear career paths
Life After the Sale
Founder involvement post-sale depends on both the owner and the buyer. Some founders transition out after a short period, while others roll equity and stay involved. As Roy puts it, this can lead to a “second bite of the apple,” allowing founders to participate in future growth and additional exits.
Contact Us
Residential services is “incredibly attractive right now,” but as Roy stresses, “the premium goes to prepared businesses.” Owners shouldn’t wait until burnout or a downturn forces a decision. Understanding value early and preparing intentionally can open the door to stronger outcomes and more optionality.
If you’re curious about valuation, timing, or exit readiness, Evergreen for Founders is here to help founders navigate the journey with clarity and confidence. Contact Senior M&A Advisor, Hannah Huke, at hannah@evergreenforfounders.com or 617.470.3462. You can also reach out to Managing Director, Roy Yewah, at roy@evergreenforfounders.com or 517.402.4943.