In the 1990s, consolidation swept across the HVAC industry. Contractors were rolled up into large publicly traded companies like American Residential Services, Group Maintenance America Corp., Service Experts, and the utility-owned Blue Dot.

The HVAC industry, and in particular the replacement sector, is attractive to private equity investors because of its exposure to a large base of installed equipment that requires regular service and, ultimately, replacement. The critical nature of HVAC equipment for ensuring comfort means that customers tend to place the most emphasis on service responsiveness and equipment quality, in addition to price and other considerations.

Morgenthaler Private Equity (MPE) has announced the recapitalization of United Pipe & Steel Corp. (UP&S), a leading independent master distributor of steel pipe, copper tubing, plastic pipe, electrical conduit, and related products serving customers in the plumbing; HVAC; pipe, valve, and fittings (PVF); waterworks; and electrical markets.