Sell to Private Equity
Sell to a PE-backed roll-up platform — the option drawing the most capital into the trades, and the one with the most misunderstood deal terms.
Overview
Private-equity firms have bought nearly 800 HVAC, plumbing, and electrical companies since 2022, building regional and national "platforms" by acquiring profitable local shops and bolting them together. For an owner with $1M+ of EBITDA, a PE sale can deliver the highest headline price of any exit — but the headline is rarely the check you take home. A PE deal is usually a mix of cash at close, an earnout tied to future performance, and rollover equity (you keep a stake in the larger platform). Understanding that split — and what the earnout and rollover are really worth — matters more than the multiple you negotiate. This guide is written from the owner's side of the table: we take no buy-side fee and do not source deals, so there is no incentive here to talk you into selling.
How It Works
- 1
A platform or sponsor approaches you (or your advisor runs a process)
Most trades owners are approached directly by acquisitive platforms. Running a competitive sell-side process with a broker or banker typically raises the price and improves terms versus accepting the first inbound offer.
- 2
Valuation and LOI
The buyer values the business on a multiple of adjusted EBITDA and issues a non-binding Letter of Intent outlining price, structure, and exclusivity.
- 3
Diligence
Financial, legal, and operational diligence — clean books, documented recurring revenue, and a team that can run without you all lift the final number.
- 4
Close and integration
Cash hits at close; earnout and rollover are settled over the following years as the platform integrates your operation.
Pros & Cons
Pros
- + Highest headline multiple for $1M+ EBITDA businesses
- + Rollover equity offers a potential 'second bite' if the platform sells again
- + Buyer brings capital, systems, and back-office scale
- + You can often stay on and keep running your brand
Cons
- − Cash at close is only part of the price; earnouts can underdeliver
- − You lose control — new owners set strategy, comp, and culture
- − Earnout targets can be hard to hit during integration disruption
- − Rollover equity is illiquid and depends on the platform's own exit
Typical Deal Structure
The exact split is negotiable and varies by buyer; a heavier rollover often signals a buyer wanting your continued involvement.
At a Glance
- Timeline
- Commonly 4–9 months from first conversation to close.
- Typical fees
- Sell-side advisor 2–8% of deal value (Lehman/Double-Lehman); buy-side advisors are paid by the buyer, not you.
- Valuation impact
- Recurring maintenance-plan revenue, a management team that runs without the owner, and clean financials are the biggest multiple expanders.
- Tax notes
- Asset vs. stock sale, rollover treatment, and state taxes materially change after-tax proceeds — model these with a tax advisor before signing an LOI.
Compare Other Paths
General information, not legal, tax, or financial advice. Deal-structure and fee ranges are directional norms — your situation will differ. Consult a qualified advisor before acting.