Strong Industry - Broken Dealsmart_display

This commercial HVAC business is listed at $4M, generating $3.6M in revenue and $650K in cash flow.

On the surface, it checks all the boxes - recurring service contracts, commercial clients, and steady demand.

But once you run the numbers, the deal falls apart.

Deal Snapshot

After Financing

Here is what you actually take home:

You are buying a $4M business… to make about $130K per year.

That is the entire issue.

Where It Breaks

This deal is priced far above what the performance justifies.

• 6.15x cash flow multiple vs ~2.5x industry average
• 18% margin vs ~25% industry average
• Only $130K post-debt cash flow
• DSCR at 1.14, below lender comfort levels

They are pricing this like a top-tier HVAC operator — but the numbers don’t support it.

Financing Reality

At a standard 10% down payment, this deal does not meet SBA requirements.

To make it work, you would need to increase your equity to over 20% — around $800K.

So now you're putting in nearly a million dollars… to earn $130K.

That is not leverage — that is dead capital.

What Looks Good

This is not a bad business.

• Recurring commercial service contracts
• Strong demand driven by climate and real estate
• Established team and referral network
• Seller financing available

HVAC is one of the most stable, recession-resistant service industries.

But even great businesses become bad deals at the wrong price.

What This Really Is

This is a solid HVAC company priced like an elite one.

• Good industry
• Decent business
• Severely overpriced entry point

And price is what determines your return.

BizHub Verdict

This deal scores a 2.9 / 10.

Not because HVAC is weak — but because the valuation completely breaks the deal.

Great industry. Bad entry price.

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