Every HVAC owner who anchors to a 2022 platform story starts the leak the same way. They hear 13 times EBITDA at a trade show. Then a real add-on bid arrives at a number that feels like an insult.
PE HVAC contractor multiples in Illinois are still real; They are not 2021 platform folklore. Sponsors still call; They buy density; They pay add-on prices; A single shop in Aurora is not a new platform.
This article is educational, not legal, tax, or investment advice; Illinois rules and deal facts vary. Work with an attorney, a CPA, and an experienced deal advisor before you act.
Pair this with selling an HVAC business in Illinois and how private equity buyers work before you treat a rumor as a bid.
Name the trade before you name a PE HVAC contractor multiple
HVAC contractors sit in NAICS 238220; Census Bureau NAICS definitions group plumbing, heating, and air-conditioning contractors together. Your mix still matters; Service agreements are not the same as new-construction installs; A shop that lives on replacement and maintenance is a different asset than a bid shop that lives on one general contractor.
BLS Occupational Employment and Wage Statistics is where wage evidence lives. If your “owner pay” is below a working service manager in the Chicago metro, a buyer will insert a real wage. That one line can erase a turn of multiple.
The IBBA glossary defines an add-on as a company a private equity firm bolts onto a platform, or that a strategic buyer uses to consolidate. That is the call most Illinois owners actually get.
Industry pages help with context; See the HVAC industry page and selling a plumbing business in Illinois if you run both trades under one roof.
What published HVAC services averages actually said
I am not citing a competitor broker report as gospel; Industry-report language for 2026 described HVAC services deal volume around 92 transactions year-to-date through early July. That was down about 4 percent versus the prior year; Published 2024 through year-to-date 2026 HVAC services averages sat near 2.0 times revenue and 9.5 times EBITDA. That is down from about 2.3 times revenue and 13.3 times EBITDA in 2021 through 2023. Sponsor activity was described as add-on heavy, with few new platforms.
Those are reported averages across a national services set; They are not a quote for your shop. They are a warning; The 13-times story is a last-cycle average, not a 2026 bid.
Averages hide mix; A multi-location platform with a professional manager, a membership book, and clean inventory is not a one-truck owner shop. Do not average yourself up.
SDE is not EBITDA, and that mix-up costs owners
Seller's discretionary earnings, or SDE, is the cash a full-time working owner can take after a recast. An add-back is an adjustment that moves a personal or one-time item toward that cash. EBITDA is earnings before interest, taxes, depreciation, and amortization.
A PE platform multiple is usually applied to adjusted EBITDA after a market manager is in the model. If you are the closer, the dispatcher, and the only person who can bid a $40,000 change-out, you do not have platform EBITDA. You have owner SDE; Read what EBITDA means in an Illinois sale.
These figures are hypothetical; Owner H shows $1.2 million of owner SDE on $6 million of revenue. After a $180,000 general manager and a few add-backs the buyer will reject, adjusted EBITDA might sit near $900,000. A 9.5 times story on the first number is not the same as 9.5 times on the second. The gap is the whole fight.
Quality of earnings work is how a sponsor tests that math; See quality of earnings. If the membership file and the tax returns do not tie, the multiple you heard at the show will not survive the first data request.
Add-on math for a $1 million to $5 million EBITDA shop
If your adjusted EBITDA is in the $1 million to $5 million band, you are often an add-on, not a new platform. Add-ons can still be good sales; They are priced on synergy the buyer already has: dispatch software, buying power, and a call center. You do not get paid as if you were the platform.
SBA guidance on merging or acquiring a business still puts valuation next to diligence and contracts. Some HVAC sales go to 7(a) operators, not sponsors; That buyer uses SDE and a bank. Do not send them a PE teaser and a sponsor teaser with the same number.
Single-location owners should not anchor to a 2022 peer story; That peer may have had three locations, a true manager, and a cheaper rate. You have one roof and a van fleet that needs $80,000 next year; Price the file in front of you.
Use how to value a small Illinois business for the recast method. Use normalizing financials before you take the second private equity call.
Illinois transfer issues sponsors still trip on
Illinois does not run a single statewide HVAC contractor license the way some states do. Local permits, Chicago general contractor rules, and EPA refrigerant cards still matter; Plumbing work under the same roof is different. The Illinois Department of Public Health licenses plumbers and registers plumbing contractors; If your entity does both, map who holds what before you sign an LOI.
A letter of intent, or LOI, is the short document that sets price, structure, exclusivity, and diligence. A confidential information memorandum, or CIM, is the memo after an NDA; Sponsors will ask for both. They will also ask if the entity is in good standing with Illinois Secretary of State business services.
A bulk sale is a transfer of a major part of business assets outside the normal course of trade. Illinois buyers still need Form CBS-1 on asset deals; Lease assignment on a shop and warehouse can take longer than the QoE. Start the landlord when the LOI is signed.
Chicagoland density is what platforms want; Downstate density can still work if you sit on a corridor a sponsor already serves. A one-off town with no sister shop nearby is a harder add-on.
Checklist before you take the next inbound call
- Export service agreements and tie them to deposits.
- Split replacement, maintenance, and new construction in the recast.
- Insert a real manager wage if you still run the board.
- List trucks, tools, and known capex for the next 24 months.
- Write who holds plumbing, refrigerant, and local permit rights.
- Decide whether real estate sells with the company.
- Compare a sponsor add-on bid with a 7(a) operator bid on cash at close.
That list is how you keep a 2022 story from setting your floor; It is also how you keep techs from hearing the sale on a group text.
When you are ready to run a process, use the sell-your-business map. One inbound email is not a process.
Hypothetical: add-on versus operator
These numbers are hypothetical.
Owner I has two collar-county shops; Adjusted EBITDA after a working GM is $1.6 million. Recurring maintenance is 38 percent of revenue; A sponsor already in Illinois might pay an add-on multiple on that EBITDA and still subtract truck capex. Owner I should model cash, rollover equity, and any earnout as separate dollars.
Owner J has one downstate shop and $420,000 of owner SDE; A PE teaser at “nine times” is not their market. An operator with a 7(a) loan might close on SDE if the lease and licenses are clean. Owner J’s job is to stop using Owner I’s rumor as a floor.
What a sponsor will underwrite that a trade-show slide will not
Sponsors want cohort data; How many maintenance agreements renewed; How many cancelled after a price increase. How much of last year’s profit was one snow year or one data-center job; They will also ask how many techs can run a change-out without you on the phone.
They will mark trucks, refrigerant compliance, and warranty reserves; They will insert a call-center allocation if they already own one. That allocation can look like a haircut; It is how they justify the add-on multiple they still will pay.
An independent quality-of-earnings review is common once the check is large; Soft add-backs die there. Personal fuel, related-party rent below market, and a cousin on payroll who does not work will not survive. Document them or drop them before the first CIM.
If you refuse to professionalize the books because “the techs know the customers,” you are telling the sponsor you are not an add-on. You are a job; Jobs sell on SDE to operators; That can still be a good sale. It is not a platform multiple.
Labor, not lore, sets the Illinois HVAC multiple
The Chicago metro pays working HVAC techs and dispatchers more than a downstate shop may be used to. A sponsor who already has Illinois density will use metro wages in the model even if your shop is in a cheaper county. Argue with evidence; Do not argue with a 2022 slide.
Owner concentration is the other haircut; If you still approve every bid over $8,000, the buyer is purchasing your judgment. They will pay less, or they will require a longer handoff, or they will require an earnout. All three are rational.
Recurring maintenance is the offset; A documented book with real retention is why HVAC still draws inbound calls. A book that lives in your head is not a book; Export it.
Plumbing under the same entity can help or hurt; It helps if IDPH registration and the plumber of record are clean. It hurts if the sponsor only wants HVAC density and sees license risk; Split the story in the CIM so they can price the piece they want.
How to run a process without leaking the shop
Blind teaser; NDA; CIM; Then a sponsored management meeting; Do not let a “quick look” become a tech-room tour with no paper. That is how rumors start and how a competitor hires your lead installer.
Compare bids on cash at close, rollover equity, seller notes, and earnouts; A high EBITDA multiple with a large rollover is a partnership, not an exit. Say which one you want.
Jason at Jaken Equities can put an add-on bid and an operator bid on one sheet. That is the useful conversation; The 13-times story is not.
If you are still the only person who can price a commercial replacement, start a written bid book this quarter. A sponsor will pay for a method; They will discount a personality; That is the whole multiple reset in one sentence.
Keep the teaser dull; County band, revenue band, mix of maintenance versus install; Save customer names for the NDA room. A leaked HVAC sale is how your best installer gets a recruiting text before you get an LOI.
If the inbound call will not put a number on paper after seeing a recast, it is not a bid. It is a fishing trip; Treat it that way.
Frequently Asked Questions
Take the add-on bid on its own terms
PE HVAC contractor multiples in Illinois reset with the rest of the trade; Add-ons still close. 2022 platform stories do not set your floor; Recast SDE and EBITDA as two numbers. Then compare cash at close.
Jason at Jaken Equities can walk a confidential range for an HVAC or plumbing file. Bring the membership export and the recast; Leave the trade-show multiple in the truck.
Price the shop you run, not the 2022 story
Schedule a confidential HVAC valuation chat with Jaken Equities. We will separate SDE from EBITDA and map add-on versus operator bids.
Schedule a Free ConsultationWord count: 2136 | Last updated: May 2026 | Informational purposes only. Not legal, tax, or financial advice. Consult qualified Illinois professionals before transacting.