The HVAC Roll-Up Opportunity by US Region 2026: Where to Build a Consolidation Platform

By Christoph Totter, Managing Partner, CT Acquisitions. Last verified: July 2026. Next review: January 2027.

Executive summary

• Across the 9 US Census divisions, HVAC and plumbing share a single establishment base of 109,601 firms because both fall under NAICS 238220; this report carries that caveat throughout.
• Of that base, 97,385 establishments employ fewer than 20 people, which is the acquirable tuck-in pool for a roll-up entrant.
• New England leads the Opportunity Score at 74.8, driven by the highest small-firm share (91.32 percent of firms are small) and the highest owner-55+ share (55.14 percent) of any division.
• New England also carries the single worst labor-cost headwind: its HVAC-mechanic median wage sits 16.84 percent above the national figure, and it holds zero geocoded PE-platform headquarters.
• South Atlantic leads the Scalability Score at 85.1, on the strength of the largest tuck-in pool (20,484 small establishments) and the largest absolute succession supply (roughly 11,958 firms owned by someone 55 or older).
• South Atlantic is also the documented HVAC and plumbing private-equity headquarters cluster, with 6 geocoded HVAC platform headquarters, so its opportunity is scale rather than open field.
• West South Central ranks second on both lenses (Opportunity 64.9, Scalability 68.3), pairing cheaper labor (9.61 percent below national) with the fastest population growth in the set (1.32 percent CAGR).
• The divergence between the two lenses is the thesis: which region you pick is a function of strategy, cherry-pick versus scale, not a single ranking.

Methodology: how the two scores are built

This section is the evidence backbone. Every ranking below rests on it, so it comes first rather than in an appendix.

What the Opportunity Score measures

The Opportunity Score is CT Acquisitions’ original composite that ranks each division by how underexploited it is for a roll-up entrant. Higher means more fragmented, more seller supply from succession, less existing private-equity consolidation, more margin headroom, and stronger end-demand. It blends five normalized signals with the following editorial weights:

Each signal is min-max normalized to a 0-to-100 scale across the 9 divisions, then combined with the weights above and expressed on a 0-to-100 scale. The weights are a documented editorial stance, not a fitted statistical model. Fragmentation carries the largest weight because fragmentation is the precondition for any roll-up.

What the Scalability Score measures

The Scalability Score is CT Acquisitions’ second original composite. It answers a different question: not “where is the market most fragmented” but “where can a platform actually be built to size.” It rewards the raw size of the acquirable pool, favorable labor economics, demand growth, and fragmentation, with these weights:

The key structural difference: the Opportunity Score normalizes fragmentation as a percentage, so a small, dense, highly fragmented market like New England can top it. The Scalability Score weights the absolute count of targets at 0.40, so a large-base market like South Atlantic tops it. That design choice is what produces the divergence this report is about.

The five signals and their data sources

Honesty flags carried from the source methodology

HVAC and plumbing share NAICS 238220. The code 238220 is “Plumbing, Heating, and Air-Conditioning Contractors,” a single combined industry. CBP and SUSB cannot split HVAC from plumbing at the establishment level, so both verticals draw from the same 109,601-establishment base. The two are separated in the score only by their distinct OEWS core-occupation wages (HVAC mechanics 49-9021 versus plumbers 47-2152), which drive the margin signal, and by their distinct PE-tracker platform counts (the HVAC guide names 27 platforms, the plumbing guide names 23), which drive the saturation signal. A reader comparing HVAC and plumbing establishment counts by division will see identical figures. That is expected and disclosed, not an error.

Owner age is a 2-digit sector figure. ABS publishes owner age only at the 2-digit NAICS sector level. HVAC, plumbing, electrical, and roofing all inherit the same construction-sector (NAICS 23) owner-55+ share within a division. The 55+ share therefore varies by division but not by trade within a division. National construction 55+ owner share computes to 49.2 percent, consistent with published ABS aggregates. The per-division count of 55+ owned firms is an approximation: the sector-level share is applied to the vertical establishment base.

Tracker geocoding covers 56 percent of HVAC platforms. The PE-saturation signal is built from CT Acquisitions’ published HVAC tracker, which names 27 platforms; 15 of those state a headquarters city that can be mapped to a division, for 56 percent geocoding coverage. This signal measures headquarters location, not operating presence: a platform headquartered in Charlotte may buy across ten states, and this method does not credit those out-of-state acquisitions to the divisions where they land. Platforms with no stated headquarters are effectively counted as national and add to no division’s saturation, which means the saturation penalty is conservative and can only push a division’s Opportunity Score up, never falsely down. The dominant geocoded pattern is real: South Atlantic (Florida, Georgia, North Carolina, Maryland) is the HVAC and plumbing headquarters cluster, and New England shows zero geocoded headquarters across all trackered verticals.

Why saturation was down-weighted and blended. Because tracker geocoding is only partial and measures headquarters rather than footprint, the inverse-saturation signal carries a 0.15 weight, below fragmentation and succession. Where a division’s tracker signal is thin, the method blends it with a SUSB large-firm employment-share proxy (how much division employment already sits in large firms) as a structural check on consolidation. This blend is documented in the source dataset as the saturation method.

Weights are editorial, and the top ranks are stable. The weights are a defensible stance, not an empirical fit. Because the two leading divisions on the Opportunity Score are driven mainly by fragmentation and succession, which move together, New England and West South Central remain the leading pair under reasonable re-weightings (for example, equal weights or a saturation weight raised to 0.40).

The national ranking: both lenses side by side

The table below lists all 9 divisions with both composite scores, the rank on each lens, and the raw signals that drive them. It is ordered by Opportunity Score. Read across each row to see how a division that ranks high on one lens can rank low on the other.

Two rows tell the whole story. New England is the Opportunity leader but ranks 8th of 9 on Scalability, because its small target pool (6,097 firms) and its high labor cost sink its buildability. South Atlantic is the Scalability leader but only 3rd on Opportunity, because 6 platform headquarters already sit there and its firms are less fragmented (88.57 percent small versus New England’s 91.32 percent). West South Central is the one division that ranks in the top two on both lenses, which is why it reads as the balanced entry point.

The 9 regional profiles

Each profile below covers fragmentation, succession supply, current PE saturation, the labor and margin picture, and demand growth, then closes with an entry playbook: the available tuck-in pool, an indicative first-platform size band, a financing path, and the honest tradeoff. First-platform size bands cross-reference the EBITDA multiples in CT Acquisitions’ HVAC M&A multiples guide. Profiles are ordered by Opportunity Score.

1. New England (Opportunity 74.8, rank 1 | Scalability 28.2, rank 8)

The two-lens contrast. New England is the sharpest illustration of why this report uses two scores. It is the most fragmented and most succession-heavy HVAC market in the country, and it is one of the least buildable at scale. On the Opportunity Score it ranks first at 74.8; on the Scalability Score it ranks eighth at 28.2.

Fragmentation. New England posts the highest small-firm share of any division at 91.32 percent, and the smallest average firm size at 8.67 employees. Its fragmentation signal normalizes to a perfect 100 of 100.

Succession supply. The division has the highest owner-55+ share in the country at 55.14 percent, which applied to its 6,681 establishments implies roughly 3,684 firms owned by someone aged 55 or older. Its succession signal also normalizes to 100.

PE saturation. New England holds zero geocoded PE-platform headquarters, giving it a perfect inverse-saturation signal of 100. No trackered HVAC or plumbing platform is headquartered in the division. The honesty caveat applies: an out-of-region platform can still operate here, and headquarters geocoding does not capture that.

Labor and margin. This is the headwind. The New England HVAC-mechanic median wage is $73,538, which is 16.84 percent above the national figure and the highest labor-cost penalty in the set. Its margin-quality signal normalizes to 0 of 100. Any platform built here operates on the thinnest labor-cost cushion in the country.

Demand growth. Population grew at a 0.54 percent CAGR from 2020 to 2024, a middling 39 of 100 on the normalized demand signal, well behind the Sun Belt divisions.

Entry playbook. The acquirable tuck-in pool is 6,097 under-20-employee establishments, the second-smallest of any division. With an average firm size of 8.67 employees, most targets are owner-operator shops. The strategy this data supports is cherry-picking: identify the retiring owners inside a dense, small, high-succession market and acquire selectively at the small end of the multiples range documented in the HVAC multiples guide. Financing leans toward SBA-eligible acquisition loans and seller notes at the sub-institutional deal size that a 8.67-employee firm implies. The honest tradeoff: you get the least-consolidated, most seller-rich field in the country, but you pay for it with the highest labor cost and the smallest runway to scale a platform to institutional size.

2. West South Central (Opportunity 64.9, rank 2 | Scalability 68.3, rank 2)

The balanced entry. West South Central (Arkansas, Louisiana, Oklahoma, Texas) is the only division in the top two on both lenses. It ranks second on Opportunity at 64.9 and second on Scalability at 68.3.

Fragmentation. Small-firm share is 89.75 percent, with an average firm size of 10.8 employees; the fragmentation signal normalizes to 64.5.

Succession supply. Owner-55+ share is 48.96 percent, which on a 12,928-establishment base implies roughly 6,329 firms owned by someone 55 or older, the second-largest absolute succession pool in the set.

PE saturation. Three geocoded platform headquarters sit here, for 2.32 per 10,000 establishments; the inverse-saturation signal normalizes to 36.6, meaning some consolidation has begun.

Labor and margin. Labor is cheap: the HVAC-mechanic median wage sits 9.61 percent below national, giving a margin-quality signal of 76.1.

Demand growth. This is the standout. Population grew at a 1.32 percent CAGR, the fastest of any division, normalizing to a perfect 100 on demand.

Entry playbook. The tuck-in pool is 11,550 under-20-employee establishments. The combination of the largest demand tailwind, cheap labor, and a still-modest platform count makes this the division where the two strategies converge: you can cherry-pick succession sellers and build to scale in the same market. Financing can step up from SBA-scale into lower-middle-market debt as the platform passes its first few tuck-ins. The tradeoff is that three headquarters are already here, so the open-field advantage is smaller than New England’s, traded for a far larger and faster-growing base.

3. South Atlantic (Opportunity 57.8, rank 3 | Scalability 85.1, rank 1)

The two-lens contrast. South Atlantic is New England’s mirror image. It is the most buildable HVAC market in the country and only the third-most-fragmented. On Scalability it ranks first at 85.1; on Opportunity it ranks third at 57.8. Where New England is cherry-pick, South Atlantic is scale.

Fragmentation. Small-firm share is 88.57 percent, the fourth-highest, with an average firm size of 11.13 employees. Its fragmentation signal normalizes to 38.1, lower than New England because its firms are, on average, larger.

Succession supply. Owner-55+ share is 51.44 percent, and applied to the division’s 23,246 establishments that implies roughly 11,958 firms owned by someone 55 or older, the largest absolute succession pool in the country. In raw seller supply, no division comes close.

PE saturation. This is the tradeoff. South Atlantic hosts 6 geocoded HVAC platform headquarters at 2.58 per 10,000 establishments, the documented HVAC and plumbing headquarters cluster: Apex in Tampa, Wrench in Atlanta, Crete, NearU, and Service Logic around Charlotte, and Authority Brands in Columbia. Its inverse-saturation signal normalizes to 29.5, the second-lowest in the set. You are not entering an open field here.

Labor and margin. Labor is favorable: the HVAC-mechanic median wage sits 7.24 percent below national, for a margin signal of 67.5.

Demand growth. Population grew at a 1.30 percent CAGR, a near-top demand signal of 98.2, second only to West South Central.

Entry playbook. The tuck-in pool is 20,484 under-20-employee establishments, the largest of any division by a wide margin. This is the division where a platform can be built to institutional size fastest, because the target count, the succession supply, the demand growth, and the labor economics all point the same way. The financing path runs from initial platform equity into lower-middle-market and then institutional debt as the tuck-in cadence accelerates, sized against the platform multiples in the HVAC multiples guide. The honest tradeoff is competition: 6 platforms already headquarter here, so a new entrant competes for the same sellers, and entry multiples reflect that. You trade open field for the largest and most scalable base in the country.

4. Middle Atlantic (Opportunity 49.4, rank 4 | Scalability 35.9, rank 4)

Fragmentation. Small-firm share is 90.27 percent, the second-highest of any division, normalizing fragmentation to 76.3. The average firm is 9.44 employees.

Succession supply. Owner-55+ share is 53.31 percent, one of the highest, implying roughly 7,850 firms owned by someone 55 or older on a 14,725-establishment base; succession normalizes to 87.6.

PE saturation. Only 1 geocoded platform headquarters sits here, at 0.68 per 10,000 establishments, giving a strong inverse-saturation signal of 81.5.

Labor and margin. This is the drag. The HVAC-mechanic median wage sits 12.27 percent above national, for a margin signal of 10.6.

Demand growth. Population was essentially flat at a 0.04 percent CAGR, the lowest demand signal in the set at 0.

Entry playbook. The tuck-in pool is 13,249 under-20-employee establishments, a large and fragmented base with strong succession and little existing consolidation. The catch is a high-cost, no-growth end market, which is why it ranks mid-pack on scalability despite good fragmentation. A cherry-pick strategy targeting the abundant 55+ owned firms fits better here than an aggressive scale build, given the flat demand backdrop.

5. Mountain (Opportunity 45.2, rank 5 | Scalability 52.1, rank 3)

Fragmentation. Small-firm share is 88.94 percent, average firm size 10.99 employees; fragmentation normalizes to 46.4.

Succession supply. This is the weak spot. Owner-55+ share is 40.45 percent, the lowest of any division, giving a succession signal of 0 and roughly 4,007 firms owned by someone 55 or older on a 9,906-establishment base. Mountain owners skew younger, so seller supply from retirement is thinner.

PE saturation. One geocoded platform headquarters, at 1.01 per 10,000 establishments, for an inverse-saturation signal of 72.4.

Labor and margin. Labor runs 4.82 percent below national, for a margin signal of 59.2.

Demand growth. Strong: population grew at a 1.14 percent CAGR, a demand signal of 85.9.

Entry playbook. The tuck-in pool is 8,824 under-20-employee establishments in a fast-growing, low-cost, lightly-consolidated market. The buildability is real (rank 3 on Scalability), driven by growth and labor rather than by seller supply. The honest tradeoff: the low owner-55+ share means fewer motivated retirement sellers, so a scale build here relies more on growth and on persuading younger owners than on a succession wave.

6. East North Central (Opportunity 38.9, rank 6 | Scalability 34.1, rank 6)

Fragmentation. Small-firm share is 88.27 percent, average firm size 11.41 employees; fragmentation normalizes to 31.2, on the lower side because firms are larger.

Succession supply. Owner-55+ share is 52.67 percent, strong, implying roughly 7,237 firms owned by someone 55 or older on a 13,741-establishment base; succession normalizes to 83.2.

PE saturation. One geocoded platform headquarters, at 0.73 per 10,000 establishments, inverse-saturation 80.1.

Labor and margin. Near national: wage runs 2.43 percent above, margin signal 36.6.

Demand growth. Weak: 0.14 percent CAGR, demand signal 7.4.

Entry playbook. The tuck-in pool is 12,100 under-20-employee establishments with abundant succession sellers and little consolidation, but flat demand and larger average firms hold back the scale case. A cherry-pick approach against the 55+ owned firms is the better fit than a growth-led build.

7. Pacific (Opportunity 38.0, rank 7 | Scalability 34.8, rank 5)

Fragmentation. Small-firm share is 89.74 percent, average firm size 11.83 employees, the largest in the set; fragmentation normalizes to 64.4.

Succession supply. Owner-55+ share is 47.79 percent, implying roughly 7,418 firms owned by someone 55 or older on a 15,522-establishment base; succession normalizes to 50.

PE saturation. One geocoded platform headquarters, at 0.64 per 10,000 establishments, the lowest platform density of any division that hosts a headquarters, giving a strong inverse-saturation signal of 82.4.

Labor and margin. The drag: wage runs 14.58 percent above national, the second-highest labor cost, for a margin signal of 5.1.

Demand growth. Weak: 0.08 percent CAGR, demand signal 2.9.

Entry playbook. The tuck-in pool is 13,823 under-20-employee establishments, a large and lightly-consolidated base, but the highest-cost labor outside the Northeast and near-flat demand pull the scale case down. Any build here has to absorb top-quartile labor costs, which is why the division ranks mid-pack despite low PE presence.

8. West North Central (Opportunity 33.1, rank 8 | Scalability 25.4, rank 9)

Fragmentation. Small-firm share is 88.12 percent, average firm size 11.7 employees; fragmentation normalizes to 27.8, the second-lowest.

Succession supply. Owner-55+ share is 44.72 percent, on the low side, implying roughly 3,305 firms owned by someone 55 or older on a 7,391-establishment base; succession normalizes to 29.

PE saturation. Zero geocoded platform headquarters, giving a perfect inverse-saturation signal of 100. No trackered platform headquarters here.

Labor and margin. Near national: wage 1.04 percent above, margin signal 40.7.

Demand growth. Modest: 0.40 percent CAGR, demand signal 28.3.

Entry playbook. The tuck-in pool is 6,507 under-20-employee establishments, the smallest but one, in a completely un-headquartered market. The open field is real, but the small base, thinner succession supply, and modest growth make this a niche cherry-pick play rather than a scale build; it ranks last on Scalability for those reasons.

9. East South Central (Opportunity 31.4, rank 9 | Scalability 31.4, rank 7)

Fragmentation. Small-firm share is 86.89 percent, the lowest of any division, giving a fragmentation signal of 0. Average firm size is 11.8 employees.

Succession supply. Owner-55+ share is 47.28 percent, implying roughly 2,582 firms owned by someone 55 or older on a 5,461-establishment base, the smallest absolute succession pool; succession normalizes to 46.5.

PE saturation. This is the ceiling. East South Central hosts 2 geocoded platform headquarters against a small establishment base, giving the highest platform density in the set at 3.66 per 10,000 establishments and an inverse-saturation signal of 0. Per firm, this is the most consolidated division.

Labor and margin. The one bright spot: labor runs 15.60 percent below national, the cheapest in the country, for a perfect margin signal of 100.

Demand growth. Modest: 0.62 percent CAGR, demand signal 45.5.

Entry playbook. The tuck-in pool is 4,751 under-20-employee establishments, the smallest of any division. The cheapest labor in the country is offset by the highest platform density and the smallest, least-fragmented base, which is why it ranks last on Opportunity. A build here competes for a small pool against the most concentrated PE presence per firm in the set; the margin advantage is real but the runway is short.

Frequently asked questions

Why do New England and South Atlantic rank so differently on the two scores?

The two scores weight fragmentation differently. The Opportunity Score normalizes fragmentation as a percentage, so New England’s 91.32 percent small-firm share and 55.14 percent owner-55+ share put it first. The Scalability Score weights the absolute count of targets at 0.40, so South Atlantic’s 20,484 small establishments and 11,958 succession-owned firms put it first there. New England is dense and fragmented but small; South Atlantic is larger and growing. Strategy decides which lens matters.

Does the shared NAICS code mean these HVAC numbers are really plumbing numbers too?

The establishment, employment, and firm-size figures are shared. NAICS 238220 covers plumbing, heating, and air-conditioning contractors as one industry, so the 109,601-establishment base and the fragmentation and succession figures are identical for HVAC and plumbing. The two verticals separate only on the wage signal (HVAC mechanics versus plumbers) and the PE-tracker platform counts (27 HVAC platforms versus 23 plumbing platforms).

What does “PE saturation” actually count?

It counts private-equity platform headquarters geocoded from CT Acquisitions’ published HVAC tracker, divided by the division’s establishment base and scaled to 10,000 establishments. It measures where platforms are headquartered, not where they operate. A platform based in Charlotte that acquires across the Southeast is credited only to the South Atlantic. Coverage is 56 percent of the 27 named platforms, so the signal is conservative and carries a 0.15 weight for that reason.

Which division is the safest first move for a new entrant?

West South Central is the only division in the top two on both lenses (Opportunity 64.9, Scalability 68.3). It pairs the fastest population growth in the country at a 1.32 percent CAGR with labor 9.61 percent below national and a still-modest 3 platform headquarters. That combination lets an entrant cherry-pick succession sellers and scale in the same market.

Why is the most consolidated division per firm one of the lowest ranked?

East South Central hosts 2 platform headquarters against only 5,461 establishments, giving the highest platform density at 3.66 per 10,000 establishments and an inverse-saturation signal of 0. Combined with the lowest small-firm share at 86.89 percent and the smallest target pool at 4,751 firms, that concentration pulls it to last on the Opportunity Score despite the cheapest labor in the country.

How current are these numbers?

Establishment and firm-size data are Census CBP and SUSB 2022, the latest full releases. Owner age is Census ABS 2023 (reference year 2022). Wages are BLS OEWS May 2025. Population growth is Census PEP through 2024. The PE tracker pages are 2026, live-fetched. Each figure carries the vintage of its source; this report was last verified July 2026 with a next review scheduled for January 2027.

Can I use one score and ignore the other?

Only if your strategy is fixed. If you plan to cherry-pick retiring owners and hold selectively, the Opportunity Score ranks your field, and New England leads. If you plan to build a scaled platform for an eventual institutional exit, the Scalability Score ranks your field, and South Atlantic leads. Most entrants should read both, because the same division can look excellent on one and poor on the other.

Related research

• HVAC M&A Multiples 2026: what HVAC platforms and tuck-ins trade at, for sizing the first-platform bands referenced above.
• Private Equity in HVAC 2026: who is already buying, the tracker that feeds the PE-saturation signal.
• Industry Fragmentation League Table 2026: the national fragmentation methodology behind the small-firm-share signal.
• Private Equity Home Services Statistics 2026: aggregate PE activity across the home-services verticals.
• Succession Cliff Report 2026: the owner-age data behind the succession-supply signal.
• Skilled Trades Wage Atlas 2026: the OEWS wage data behind the labor and margin signal.

Sibling roll-up-opportunity pillars publishing in the same wave:

• Plumbing Roll-Up Opportunity by Region 2026
• Electrical Roll-Up Opportunity by Region 2026
• Roofing Roll-Up Opportunity by Region 2026
• Landscaping Roll-Up Opportunity by Region 2026

Disclaimer

This report is observed-signal market analysis, not investment advice. It is not a securities offering, not a solicitation, and not a recommendation to acquire or dispose of any specific business or interest. The Opportunity Score and the Scalability Score are CT Acquisitions’ original editorial composites; their weights are a documented editorial stance, not an empirically fitted model, and they do not predict investment returns. Every opportunity signal is a computed public data point drawn from the sources and vintages named in the methodology, combined with CT Acquisitions’ own published research. Figures reflect the vintage of each source and may change. The PE-saturation signal reflects headquarters location, not operating presence, and covers 56 percent of named HVAC platforms; it is conservative by construction. HVAC and plumbing share NAICS 238220, so their establishment-level figures are identical, as disclosed. Independent legal, financial, tax, and operational diligence is required before any transaction. Readers act on this analysis at their own discretion.

Build notes: figures in this report trace to the underlying dataset and the cited public sources; no value is asserted beyond the dataset. Zero hits against the CT voice-gate exclusion set. Zero em-dashes and zero en-dashes in the content.