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Based in Melbourne (Victoria) we deliver business valuations all over Australia using expert business valuers and resources that allow us to work remotely.

We have completed:

Contact Us

L3/162 Collins St, Melbourne, 3000

0421 069 717

m.williams@exitvalue.com.au 

HVAC Business Valuation

The HVAC industry (Heating Ventilation And Air Conditioning) is both a service industry to the construction sector as well as dealing with both businesses and consumers directly.  It has been driven by the growth in non-residential construction activity and high rise apartment growth, although the industry contracted in the current year with the reduction in construction activity.

The industry is very competitive, has low-medium barriers to entry (industry licensing and training requirements) and technology is constantly influencing market trends.  The equipment manufacturing and installation side of the industry has observed significant growth whilst growth in servicing has been much less.

HVAC business valuation is influenced by the level of ongoing client agreements, degree of workforce training and experience, market differentiation and arrangements with HVAC equipment suppliers.  The key to profitability is a productive workforce and effective customer relationship management.

Future changes in energy policy, energy efficiency and green building compliance requirements, impacts of climate change and improvements in automation technology will have an impact on industry revenue and EBITDA results.

This includes an estimated 3.9% drop in the current year, due to a large fall in multi-unit and townhouse construction, and low growth from non-residential building construction. In contrast, industry revenue surged in 2014-15, due to high demand growth from commercial building construction and supermarkets. A spike in multi-unit apartment demand drove very high industry revenue growth in 2016-17

Most HVAC business valuations will attract reasonable EBITDA multiples where customer agreements are in place over periods longer than 12 months and have arrangements with multiple equipment suppliers.

Key Industry Statistics

According to IBISWorld, key statistics for the industries include:

 

We have collated industry performance statistics based on ABS data and detailed them in a whitepaper, which can be downloaded from the link below.

What Makes a Business Highly Valuable?

SME Performance Whitepaper

Key Drivers of a HVAC Business Valuation

A HVAC business valuation is driven by key factors such as: 

  • Degree of long term client service agreements

  • Level of workforce training and experience

  • Equipment Inventory

  • Diversity of client base and reliance on key developers

  • Effectiveness of marketing and client management

  • Arrangements with Multiple equipment suppliers

  • Use of technology to automate servicing processes to allow off-site equipment and monitoring 

  • Reporting and integration with key management functions.

  • Certification to relevant quality, OH&S and environmental standards.

EBITDA Margins range from less than 10% to as high as 30%, depending on the size of the business, industry competition, technology and automation and staff productivity.

HVAC Industry EBITDA Multiples will vary considerably, and will be heavily influenced by size and scale.  Typical EBITDA Multiple ranges we have observed are:

  • Revenue of $1m - $10m: 1.5x - 3.0x

  • Revenue of $10m - $20m: 2.5x - 4.0x

  • Revenue greater than $20m: 4.0x - 5.0x

Our HVAC Business Valuation Experience

Our HVAC business valuation experience has included including business valuations for:

  • Multiple HVAC installers for to residential sector in Melbourne and Sydney

  • HVAC installation and monitoring primarily to commercial building owners and operators in Melbourne and Sydney

  • Remote building inspection and reporting services focused on HVAC performance