HVAC and Plumbing Company Valuation
29 valuation methods · 43 industries · Results in under 10 minutes
In short
An HVAC or plumbing company is usually valued on seller's discretionary earnings: EBITDA plus the owner's pay. VA values service agreements and maintenance memberships as their own layer, at a higher multiple than one-off jobs, and lowers the multiple on work for new construction.
Who this is for
Owners of residential and light commercial HVAC, plumbing and mechanical service companies preparing to sell, take on a partner or plan succession, and buyers assembling a group of service companies who need the recurring maintenance book separated from one-off installation work.
How is an HVAC and plumbing company valued?
VA values an owner-run HVAC or plumbing company on seller's discretionary earnings: EBITDA plus the owner's pay, because a buyer replaces the owner. Service agreements and maintenance memberships are valued as their own layer, at a higher multiple than one-off work, and that multiple rises with the share of customers who renew. Repair, replacement and install work is valued at a lower multiple that rises with the company's size and falls as work for new construction takes a larger share. Comparable companies, precedent transactions and a discounted cash flow check the result, and an asset floor keeps it above what the company's own assets would recover. This tool is informational only. Output is driven by your inputs and does not constitute a formal appraisal or certified valuation.
What drives the value of an HVAC and plumbing company?
- The service-agreement and maintenance-membership base, and the share of customers who renew it each year
- The split between repair and replacement work and new-construction installs, which buyers treat as more cyclical
- Technician headcount, retention and licensing, since the workforce is what a buyer is acquiring
- How much of the revenue depends on the owner personally selling, estimating or managing jobs
- Route density and the service area the company can cover without long drives
- The mix of residential and commercial customers, and how concentrated the largest accounts are
What lowers the value of an HVAC and plumbing company?
- Revenue that depends on the owner selling, estimating or managing the jobs
- Few service agreements, or customers who do not renew them
- A large share of work for home builders, which follows the building cycle
- Technician turnover, or too few licensed technicians
How much is an HVAC and plumbing company worth? A worked example
An HVAC company with service agreements
Take an HVAC and plumbing company with $4 M of revenue, $500 K of EBITDA and $150 K of owner pay: $650 K of seller's discretionary earnings. Service agreements bring in 30% of revenue, 85% of those customers renew each year, and 10% of revenue is work for new construction. The trades model values the agreement share of earnings at 4.7× and the rest at 2.9×, about $2.24 M before debt, or 3.44× the owner's earnings. Without the agreements, the same earnings come to about $1.89 M.
Illustrative figures from the industry model alone. A full report blends it with a discounted cash flow, comparable companies and precedent transactions.
Value your HVAC and plumbing company in under 10 minutes
- 1.Upload your financial statements, or type the figures in.
- 2.Confirm the add-backs and the industry details the model asks for.
- 3.Get a valuation range, the methods behind it and a PDF memorandum.
Which numbers matter most?
Seller's discretionary earnings
EBITDA plus the owner's own pay and perks. VA uses the pay you enter; for a small owner-run company with no figure entered, it estimates a working owner's salary.
Recurring contract revenue
Revenue from service agreements and maintenance memberships. VA values it as its own layer, separate from one-off jobs.
Customer retention
The share of contract customers who renew each year. The multiple on the recurring layer rises with it.
New-construction share
The part of revenue from work on new buildings. It follows the building cycle, so VA lowers the multiple on job work as it grows.
Technician count
The number of field technicians. Buyers read it with revenue per technician to judge how the company would run without the owner.
What do you need to value an HVAC and plumbing company?
- Profit and loss statements and balance sheets, ideally for the last three years
- Figures for the current year to date
- A list of add-backs: the owner's pay and perks, and any one-off costs
- Loan and lease balances
- A list of service agreements and memberships, with renewal dates
- Revenue split between service, replacement and new-construction work
- Your technician count and the owner's own pay
Example scenarios
Two companies with the same earnings
Two HVAC companies report the same seller's discretionary earnings. One earns a large part of it from maintenance agreements that customers renew every year; the other earns nearly all of it from one-off installs. VA values the first higher, because its agreement layer is priced at the higher multiple and a buyer can count on that revenue after the owner leaves.
A plumber who builds for developers
A plumbing company does most of its work for home builders. Its earnings are real, but they depend on the building cycle, so VA applies a lower multiple to that work than to repair and replacement, and the company is worth less than a service-led peer with the same earnings.
Further reading
How to Value an HVAC Business in 2026: SDE and EBITDA Multiples
HVAC businesses sell for about 2x to 3.3x SDE for small shops and 5x to 9x EBITDA for larger firms. See 2026 multiples by size and what drives the number.
Is a Business Worth 3 Times Profit? When It Is 2x, When It Is 5x, and Which Profit Counts
Is a business worth 3 times profit? Often, if the profit is SDE. When 2x or 5x applies instead, which profit counts, and what diligence does to the price.
How Much Is a Business Worth With $500,000 in Sales? The Revenue Ladder From $100K to $3 Million
Revenue does not set a price, earnings do. See what businesses at $100K, $200K, $300K, $500K, $1M, $2M and $3M in sales are worth at 10%, 20% and 30% margins.
Frequently asked questions
Is my company valued on SDE or on EBITDA?
The leading method uses seller's discretionary earnings, EBITDA plus the owner's pay, because most buyers of owner-run service companies replace the owner. Comparable companies and precedent transactions, which work on EBITDA, sit alongside it as checks.
Do maintenance agreements really add value?
Yes. VA values agreement revenue as a separate layer at a higher multiple than one-off work, and the multiple rises with the share of customers who renew. Enter the agreement revenue and your renewal rate to see the effect.
What if I pay myself less than a manager would cost?
Seller's discretionary earnings add back your own pay, so the level you pay yourself does not change that figure. A buyer who hires a manager will still look at EBITDA after a market salary, which is why the EBITDA-based checks are shown too.
Is commercial work priced differently from residential?
The model does not price the two at different multiples. What moves the result is how much of the revenue repeats under agreements and how much comes from new construction, and commercial service contracts usually add to the first.
Is this a certified appraisal?
No. This is an informational estimate. A bank loan, a partner buyout or an estate matter may require a certified business appraisal, which this does not replace.
Does my technician count affect the value?
It does not change the multiple in VA's trades model, but buyers read it with revenue per technician to judge how the company would run without the owner, and entering it raises the model's confidence in the result.
Terms used on this page
- Seller's discretionary earnings (SDE)
- EBITDA plus the owner's own pay and perks. It shows what the business earns for one owner who works in it, and it is the figure most buyers of small owner-run businesses price.
- Add-backs
- Costs added back to reported earnings because a new owner would not bear them: personal expenses run through the business, one-off costs, or owner pay above what the role would cost to fill.
- Recurring revenue
- Revenue that repeats without a new sale, such as maintenance agreements, service plans or contracts customers renew.
- Renewal rate
- The share of customers on agreements or plans who renew each year.
- Valuation multiple
- The number earnings are multiplied by to reach a value. It rises with how durable the earnings are and how easily a new owner can keep them.
As featured in
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Last reviewed September 25, 2026 against VA's valuation models.