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Murphy Business & Financial of Utah is representing a commercial HVAC contractor based in Salt Lake County, Utah. The Company has been in continuous operation since 1999 and holds an active Utah mechanical contractor license. It serves commercial clients across the Greater Salt Lake Valley including office buildings, medical facilities, data centers, hotels, warehouses, and assisted living facilities.Services include HVAC system installation for new construction and remodel projects, service work, and preventative maintenance agreements. Revenue is roughly evenly split between new construction and remodel and retrofit work, reflecting capability across both the new development and existing building markets. Service work and maintenance agreements account for a smaller recurring portion of revenue.Total revenue grew from $6.0 million in 2023 to $8.4 million in 2025. 2025 EBITDA was approximately $512,000 and Seller Discretionary Earnings were approximately $644,000. The Company already has a strong project pipeline in place for 2026, with the year shaping up to be consistent with 2025 performance.The Company operates from a 7,500 sq. ft. facility including 2,000 sq. ft. of office space and 5,500 sq. ft. of warehouse and shop space on a half acre fenced lot. The real estate is available for purchase alongside the business or can be leased separately. The Company operates a substantial vehicle and equipment fleet that transfers with the business.NDA required prior to receiving additional information.
Why we like it
- Strong recurring revenue foundation with maintenance agreements and established commercial client relationships that typically span decades. Commercial HVAC systems require ongoing service, seasonal maintenance, and eventual replacement, creating multiple touchpoints with each customer over extended periods.
- Impressive 40% revenue growth from 2023 to 2025 while maintaining healthy 7.7% net margins demonstrates operational leverage and market demand strength. The existing pipeline for 2026 suggests this growth trajectory has momentum behind it rather than being a one-time spike.
- Commercial real estate tailwinds remain strong in Salt Lake County, with data centers, medical facilities, and assisted living representing some of the fastest-growing property types. These segments also have the highest service intensity and replacement frequency for HVAC systems.
- Asset-heavy business model with substantial vehicle fleet, equipment, and real estate creates meaningful barriers to entry and provides downside protection. The 7,500 square foot facility and fleet represent substantial tangible value that supports the asking price.
How to improve it
- Immediately audit and systematize the maintenance agreement portfolio to identify upselling opportunities and ensure consistent pricing across contracts. Many HVAC contractors undervalue their service agreements, leaving money on the table with existing customers who would pay more for guaranteed response times and priority scheduling.
- Implement robust project management software to improve job costing accuracy and identify the most profitable project types and customer segments. This data will guide future sales efforts toward the highest-margin work and help optimize crew utilization across multiple job sites.
- Develop partnerships with commercial property management companies and real estate investment firms to create referral pipelines for both new installations and ongoing maintenance work. These relationships can provide steady deal flow and reduce customer acquisition costs significantly.
- Expand the service and maintenance division aggressively by hiring dedicated service technicians and creating tiered service offerings with premium pricing for emergency response and after-hours availability. Service work typically carries higher margins than installation projects and provides predictable monthly revenue.
- Cross-train existing installation crews on service work to increase billable hours during slower construction periods and provide backup capacity during peak service seasons. This flexibility improves utilization rates and reduces the cyclical nature of construction-dependent revenue.
Diligence notes
- Verify the claimed project pipeline for 2026 by reviewing signed contracts, letters of intent, and historical conversion rates from pipeline to completed work. Construction projects can be delayed or cancelled, so understanding the quality and timing of this backlog is critical for projecting near-term cash flows.
- Analyze customer concentration risk by reviewing the top 10 customers over the past three years, including any single projects that represented more than 10% of annual revenue. Commercial HVAC work can be lumpy, and losing one major client or having a large project go bad can significantly impact profitability.
- Examine the condition and age of the vehicle fleet and major equipment, as HVAC contractors require substantial ongoing capital investment in trucks, lifts, and specialized tools. Request maintenance records and replacement schedules to understand upcoming capital expenditure requirements.
- Review the licensing requirements and insurance coverage carefully, as Utah mechanical contractor licenses have specific bonding and continuing education requirements. Verify that all necessary permits, licenses, and insurance policies will transfer smoothly and identify any compliance issues that could disrupt operations post-acquisition.