What Would a Roll-Up Pay? Shop Value Estimator

What it does. Estimates your HVAC shop’s value at a small-shop earnings multiple and shows the gap to the platform multiple a roll-up resells at.

Detailed Overview

Private equity is rolling up HVAC because of a multiple-arbitrage engine: buy small shops near 6 to 9 times earnings, centralize the back office, then resell the combined platform near 18 times. This estimator turns that abstract spread into your own number, so you can see both what your shop is worth today and why the platform is worth so much more.

Purpose

Owners hear “they’re paying crazy multiples” without a sense of where their own shop sits. The tool grounds the conversation: it derives your earnings from revenue and margin, places you in the right valuation band, nudges the multiple for recurring revenue, and lines your value up against the platform multiple. It supports the build-to-sell decision without pretending to be an appraisal.

When and Where to Use It

• Exit planning. Sanity-check a rough value before talking to an advisor or a buyer.
• Strategy. Decide whether to compete with, defend against, or build to sell to a roll-up.
• Recurring-revenue case. See how a stronger maintenance book moves you up your own band.
• Owner reality check. Understand why a single shop cannot command the platform multiple.

Inputs

• Annual revenue ($). Default $1,500,000.
• Profit margin, EBITDA or SDE (%). Default 12%. Owner-adjusted earnings, usually higher than net profit.
• Recurring / maintenance revenue share (%). Default 20%. The share of revenue from agreements and recurring service.

Outputs

• Estimated shop value range. Headline value at a small-shop multiple.
• Your EBITDA / SDE. Revenue times margin.
• Your multiple. The tier multiple plus the recurring-revenue bump.
• Platform value (18.5x). What a consolidated platform sells at, for contrast.
• You vs platform bars and the arbitrage gap. The spread that drives the roll-up.

Context: Where This Tool Lives in HKIA’s Content

The tool was built to accompany the following HKIA content. Specifically:

• “When the AI Roll-Up Comes for Your Street”. The post explains the multiple-arbitrage engine and the three moves an independent can make. This tool implements the engine with the owner’s own numbers and supports the build-to-sell move.

The tool pairs naturally with a missed-call revenue calculator (which quantifies the operational leak a roll-up exploits) and a financing attach-rate calculator (which builds the recurring, sellable revenue that lifts the multiple).

Math & Logic

• EBITDA / SDE: revenue × margin.
• Base multiple by earnings tier: under $1M is about 6.1x, $1M to $5M is about 8.0x, $5M to $10M is about 9.6x (First Page Sage, Q1 2025); above $10M extrapolated to about 10.5x.
• Recurring-revenue bump: up to +1.5x as recurring share moves from 0 to 50% or more, reflecting buyers paying up for durable revenue.
• Value range: EBITDA × (adjusted multiple plus or minus 0.75x), floored at 3x.
• Platform multiple 18.5x: the reported Champions Group multiple (2026), within the 17 to 20x platform range.

Limitations

• Not an appraisal. Real deals turn on add-backs, customer concentration, fleet and team quality, growth rate, and local market. The output is a directional estimate.
• Earnings are owner-entered. Garbage in, garbage out: an inflated margin produces an inflated value.
• Single-shop scope. It estimates a standalone shop’s value, not a platform’s, and deliberately shows the platform multiple as a contrast, not a target.

Sources Used

• HVAC EBITDA Valuation Multiples. First Page Sage, Q1 2025. Source of the tiered base multiples.
• HVAC Services Market Update. Capstone Partners, 2025. Source of the platform-multiple and roll-up context.
• Reported platform deal multiples. Champions Group (~18.5x), 2026. Source of the platform-multiple default.