Acquiring a turnaround HVAC company

May 11, 2023

by a searcher from British Columbia Institute of Technology in Vancouver, BC, Canada

Looking for suggestions of resources or information about acquiring turnaround companies. An HVAC company came up which I was originally not interested in, but the more I look at it the more opportunity I see. I have not been able to find too much information on turnarounds compared to companies that are already doing well.

Thanks!

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Reply by a searcher
from University of Wisconsin in Hopkinton, MA, USA

In my experience with HVAC, a turnaround should not be required unless the leadership team was very poor or the business model is broken. These businesses should be crushing it, with demand significantly outstripping supply and price elasticity allowing for ample margin enhancement, leading to above-average profits, in the teens. If you’re not seeing this or close to it in the core business, I’d pass. This market is huge, fragmented and loaded with targets. You’re going to pay an irrational market multiple for your target company because private equity money is pouring into this market and doing roll ups — it should be a great investment. Happy to discuss further, ^redacted‌.

Reply by a professional
from Seton Hall University in Morristown, NJ 07960, USA

Hi ^redacted‌, check out the Turnaround Management Association as a starting point. The opportunity and reward on a Turnaround are excellent as long as you assess the risk correctly and you assess it early. Your lending partner will be your biggest friend or your biggest enemy. Lots of options to fix things but they can be expensive. Happy to chat more at any time - DM me or email redacted Talk soon!

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