PE keeps calling. Should I answer, and is it real?

Private equity buying HVAC companies, plumbing shops and roofers is not news anymore. If your company has a decent reputation, you probably get a letter, an email or a call every few weeks. Some come from a buyer with money and a plan for your market. Many come from a firm building a mailing list. You can read every one, answer none, and lose nothing. This guide explains what a letter usually means, what the paperwork is called, and what to ask before you hand anyone your numbers.

How much private equity is really buying

The short version: PE is busy, but it owns a small slice of the trades.

• Fulkerson Advisors counted 31 PE-backed groups and their 571 local companies, and found they run about 0.9% of US HVAC and plumbing contractor locations. Adding public and other multi-site groups only takes it to 1.3%.
• Capstone Partners counted 92 HVAC services deals in 2026 through July, and 47 of them were by PE (38 add-ons and 9 new platforms), as reported by Salt Creek Advisory.
• Roofing is moving faster from a smaller base. PE-backed roofing platforms went from 17 at the start of 2023 to 56 at the end of 2024, and those platforms bought 106 roofing contractors in 2023 and 134 in 2024.
• Most small companies are still bought by people. IBBA's Q4 2025 survey found first-time buyers made 46% and serial entrepreneurs 32% of Main Street deals. In the lower middle market, individuals made 44% and PE about one fifth.

So the letters are a sign of real demand. They are not a sign that PE is your only buyer, or your best one.

Why you get so many letters

A PE platform grows by buying smaller companies and bolting them on. These are called add-ons. To find them, the platform (or a firm it pays) writes to hundreds of owners. Writing is cheap. Owners on one forum asked whether PE emails are a waste of time, having heard that these buyers dig deep and rarely buy. Some buyers even run their own valuation calculator to bring sellers in.

Size matters more than the letter lets on. Add-on buyers generally look for about $1M or more of EBITDA, and platforms $5M or more. TREP Advisors says most PE firms targeting HVAC seek $5M to $50M of revenue. If your company does $2M a year and you still run calls, the letter is most likely a mass mailing.

What an IOI and an LOI are

IOI (indication of interest). A short letter with a price range and a rough idea of how the price would be paid. It usually follows a first look at summary numbers. It is not binding and it is not an offer.

LOI (letter of intent). A longer letter that names a price and spells out the terms: how much cash at closing, any seller note, earnout or rollover equity, the working capital you leave in the company, your role after the sale, and an exclusivity period when you agree not to talk to other buyers. Most of an LOI is usually not binding, but exclusivity and confidentiality usually are. After you sign, the buyer's accountants and lawyers go through everything. That is called diligence.

LOI prices vary widely. Axial reports HVAC letters of intent from 2.1x to 10.9x EBITDA, and roofing letters from 2.8x to 7.0x EBITDA, with 8.3 months on average to close. Some buyers move faster: Leap Partners describes a 45-day process and offers that can include money up front and substantial earnouts.

The number on the first page of an LOI is not what lands in your bank account. Read how much is cash at closing and how much you wait for before you compare two letters.

Questions to ask before you reply

Ask these by email. A serious buyer answers them. A list builder goes quiet.

1. Whose money is it? Name the fund or the company behind you.
2. How many companies like mine have you bought in the last two years? Can I call two of those owners?
3. Do you buy companies my size? What revenue or EBITDA do you need?
4. What usually happens to the company name, my staff, their pay plans and my prices?
5. In your recent deals, how much of the price was cash at closing, and how much was a note, earnout or rollover?
6. If you are an intermediary, who pays you, and how much?
7. Will you sign a confidentiality agreement before I send numbers?
8. How long an exclusivity period do you usually ask for?

Contractor Magazine publishes a good list of questions to answer before selling to private equity. Some platforms address the hard questions on their own pages: TurnPoint speaks to "horror stories" directly, and Redwood says its owners keep equity.

You can say "not now"

There is no penalty for waiting. A short reply keeps the door open: "Thanks. I'm not selling right now. Keep me on file and check back next year." Then keep a folder of every letter. If the same names write year after year, those are the buyers who are building in your area.

Use the letter as a reason to get ready on your own terms. Get your own estimate first, look at every way to exit, not just PE, and start fixing what would lower your price.

Common mistakes

• Sending financials before an NDA. Your margins and your best customers are worth protecting. Sign a confidentiality agreement first.
• Treating the first number as the price. An IOI range is a starting point. The terms in the LOI decide what you actually get.
• Signing a long exclusivity period without advice. While you are exclusive, you cannot test the price with anyone else.
• Talking to only one buyer. One letter tells you nothing about what the market would pay.
• Letting the call happen at the shop. Your crew notices. Keep early talks off site and quiet.
• Answering because you are tired. Burnout is real, but a rushed sale is hard to undo. Run the numbers first.

Questions to ask your CPA, attorney or broker

1. Is this buyer real, and have you seen them close deals in our trade?
2. What would our earnings look like after a buyer's quality of earnings review?
3. Which terms in this IOI or LOI should we push back on?
4. How long an exclusivity period is reasonable for a company our size?
5. What should our confidentiality agreement cover before we share numbers?
6. What would I net after debt, fees and taxes at the price in this letter?
7. If we wait 12 to 24 months and fix our biggest weaknesses, what could change?

Sources

1. Fulkerson Advisors, Private Equity in HVAC and Plumbing: 0.9% of Contractors
2. Salt Creek Advisory, Who Buys HVAC Companies in 2026
3. Salt Creek Advisory, Who Buys Plumbing Companies in 2026
4. Roofing Contractor, What Contractors Need to Know About Private Equity in 2025
5. Roofing Contractor, 5 (Way Too) Early Facts About the 2025 Top 100 List
6. IBBA and M&A Source, Market Pulse Q4 2025
7. Reddit r/private_equity, Emails from PE: A Waste of Time?
8. Infinity Home Services, Roofing Business Valuation Calculator
9. Raincatcher, Private Equity in HVAC
10. TREP Advisors, Is Your HVAC Business Ready for Private Equity
11. Axial, HVAC M&A Activity and Market Trends
12. Axial, Roofing M&A Activity and Market Trends
13. Leap Partners, Our Process
14. Contractor Magazine, 7 Questions You Should Answer Before Selling to Private Equity
15. TurnPoint Services, Grow Your Business
16. Redwood Services, home page
17. Hyde Park Capital, Roofing Services Market Insights, Summer 2025
18. Chisel Industries, How to sell a plumbing business
19. Business Wire, Apex Service Partners and Alpine Investors announce Apollo minority investment
20. Contracting Business, Nexstar Network Breaks Up with Private Equity