ACE Is the Place With the Helpful HVAC?
Hardware store gets involved with contracting
Private equity has been investing heavily in the HVAC industry for years. How long will that continue? That is anybody’s guess. But in talking with people at the most recent Service World Expo event in Phoenix, more than a few folks were speculating that the bubble is about to burst.
Time will tell.
What will be the latest trend in HVAC contractor consolidation? Nobody can know for sure, but it does appear that Ace Hardware is hoping to be a part of it. In case you have not heard, the helpful hardware store acquired a group of 12 HVAC and plumbing contracting companies earlier this year. One of those companies was Unique Indoor Comfort, located in the metro Philadelphia area.
Unique Indoor Comfort owner Nate Kukla sold the business to private equity in 2021, and as part of the arrangement, he stayed with the business. It was a positive experience for him, but he is even more excited to be teaming with Ace Hardware.
When I first started to talk with Kukla, I was a little embarrassed that I didn’t know about Ace being in the HVAC market. Of course, we have all heard of Home Depot and Lowe’s getting their piece of the HVAC contracting pie, but I just knew Ace Hardware as the place I got my lawn weed and feed.
Kukla answered that they had not been in the HVAC contracting industry but had been looking to get into the home services industries for a few years now. They accomplished some of that by purchasing a handyman franchise and then a paint franchise over the last few years. And now it was on to HVAC.
As with his experience with private equity, Kukla said, the culture and the values of the organizations aligned, and that is why they made the deal.
“They are the friendly hardware folks. You go into Ace and it is different than the big box stores,” Kukla said. “Our mission is to extend that. We cannot only help the do-it-yourselfers, but the do-it-for-me folks, too. It’s a name that is trusted.”
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One of the other positives, according to Kukla, was the fact that Ace Hardware is a cooperative that is owned by the small-town store owners
“I see it as a return to Main Street for us,” Kukla said. “We had a great experience with private equity, but this is different.”
Like many, my first thought was this was another company following the Home Depot model. You go to the store, buy an air conditioner, and they match you up with an HVAC contractor. It’s been done for years now.
“It is different in that we are on the Ace team. There will be cross promotion on both sides. We are not going to market up to cover the cost, because we are owned by the cooperative,” Kukla. “And obviously, the service you get as a homeowner is going to be top-notch. Because that is what you get from us and Ace. It is essentially a different service offered by Ace Hardware.”
One other main difference it they are not tied in or married to any specific brand, like other big box stores tend to be. The contractor could be selling Trane, Carrier, or any other manufacturer.
It seems like a solid plan. In recent years, no doubt some business has been lost as the do-it-yourself audience decides that they can install that smart thermostat without the markup. Of course, we all know that HVAC contractors play an important role in quality control, but getting that message in front of a certain type of customer is certainly still important.
Messaging that at Ace Hardware can only help.
I see this as a bit of a pilot program. Ace Hardware has stores all across the county, so 15 contractors can certainly not handle all the work. It is a good first step, but I am almost certain that Ace is looking around to find additional HVAC contractors to bring into the fold.
As the private equity trend may or may not be dying down, it will be interesting to keep an eye on the secondary and perhaps below-the-radar consolidation trend.
