Great business model. Completely wrong price.
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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