Contractor consolidation remains one of the biggest trends in the HVAC industry. There’s consolidation on the wholesale side of the business as well. Both independent consolidators and OEMs are buying up distributors due to an ownership base that’s ready to sell and money available to buy.
Three factors drive the money coming into the HVAC business. The main one is low interest rates. This makes it less expensive to borrow money from investment. At the same time, it makes many traditional investments, such as bonds, less attractive. Investors seeking returns, including pension funds and university endowments, are seeking out alternatives that pay better, including private equity and personal loans. Finally, some segments that attracted a fair amount of this money in the past, such as the oil and gas industry, look less appealing today.