Why So Many Private Equity HVAC Companies With Terrible Reputations Are Still Around?
By John Mason, JBN Mechanical, State College, PA
"If that company has such awful reviews, how are they still in business?" I hear it every week. The short answer: many of them are owned by private equity, and that money plays by different rules.
They were built to be flipped
Private equity firms buy local HVAC shops cheap, bundle them together, and plan to resell the bigger company for a much higher price within 3 to 5 years. They've bought roughly 800 HVAC, plumbing, and electrical companies since 2022, mostly with borrowed money.
That borrowed money is the key to everything that follows.
Interest rates broke the plan
When rates jumped in 2022 and 2023, the debt got more expensive and buyers could no longer pay the prices these firms counted on. So many can't sell without taking a loss, and they won't. The typical hold now runs close to six years, the longest on record.
Some firms have even started selling companies to new funds they also run, just to buy more time. Money raised for these "continuation funds" hit a record in 2025.
Now it's getting worse. On September 16 the Fed raised rates again, its first hike since 2023, and signaled another may be coming. For a company carrying a pile of debt, that means even less room to breathe.
A company stuck in that squeeze has to find money somewhere. Bain & Company estimated a deal that once needed 5% yearly growth to hit its target may now need about 12%. You don't get that in a trade like ours by doing honest work at fair prices. You get it by pushing harder on every customer.
In my experience, that's when tune-ups turn into sales pitches, experienced technicians walk out the door, and rookies on commission take their place.
There's another side to "won't sell," too. Plenty of good local owners, including me, have turned these buyers down. A 3-to-5-year flip just doesn't fit with the long-term trust that makes a service company worth anything.
Why bad reviews don't sink them
They kept the old family name. The truck still says "serving the area since 1978," so many customers don't know it changed hands.
They buy the top spot online. When your heat quits at midnight, you call whoever shows up first in the search results.
Emergencies don't leave time to shop. At 10 degrees with no heat, most people call whoever can come today, reviews or not.
Maintenance plans lock you in. Once you've prepaid for the year, you tend to keep calling the same company.
Lenders keep extending. As long as the money keeps flowing, the doors stay open whether customers are happy or not.
How to protect yourself
Ask who owns the company. A local owner will tell you right away. A vague answer tells you something too.
Read the newest reviews, not the star average. A company that was great for 30 years can still have a pile of bad reviews since it was sold.
Ask if the tech is paid on commission. It tells you a lot about how the visit will go.
Get a second opinion if a routine visit turns into "you need a new system today."
Find a contractor you trust before the emergency, not on the coldest night of the year.
Where JBN stands
JBN Mechanical is not for sale. When you call, you get the owner, with no sales quotas and no investors to answer to. If a quote doesn't feel right, call me at 814-240-2455 for an honest second opinion.
