Private equity companies snag existing businesses with the aim of creating a quick turnaround. The playbook is usually the same: rapidly increase the value and market share, then sell off for a fast profit.
Fast, low-cost solutions are a great way for heating and cooling companies to get their foot in the door — and if the solutions were consistently reliable, there wouldn’t be cause for concern. But private equity (PE) companies are known for underbidding to win a job and then adding on costs once the work has started. Their focus isn’t building long-term relationships based on reliable, honest diagnoses and work. Instead, they place their bets on a single visit and try to rake in as much money as possible to please investors — not homeowners.
HVAC companies backed by PE are becoming more common as they buy up local businesses and leverage deep funding to flood the market with advertising — all while claiming to be locally owned.
With a large investment such as HVAC, it’s important to do your research to ensure you’re getting a company that will do what’s best for you…and that will be there 10 years from now if you ever need to use your warranty.
Putting profits over people
Technicians who work for private equity firms are often under heavy pressure to meet quotas and secure their commissions, which means they’ll conduct rapid inspections to speed up diagnosis and often push to replace systems that could be repaired for less.
Because PE-backed companies often scale quickly (with high demands on their staff), it’s common to see increased turnover, policy changes, and consolidations — all of which lead to inconsistent workmanship with techs who have no connection to the company’s core values or investment in its reputation.
Being led by a culture that’s not friendly to the homeowner
Tripping over dollars to save pennies
Much like taking your car to the mechanic, when you hand your home over to an HVAC company, you’re relying on their goodwill and expertise. Because most people don’t understand the complexity of HVAC, they don’t realize that HVAC systems require proper sizing, airflow testing, and careful commissioning.
When a homeowner prioritizes cost over everything else, it can put you at risk of an improperly sized system, a faulty installation, or skipped permit pulling (which can leave you in a lurch when it comes to future services).
The end result? Higher energy bills, shortened equipment lifespan, and comfort issues that never resolve. It’s also possible you’ll end up with a more expensive job than you were quoted once everything is said and done, due to “unforeseen issues” that required last-minute changes (and charges).
This is also why reputable companies will never give an estimate over the phone for a house they’ve never visited. If you want to learn more, you can read our blog.
Going, going…gone?
Private equity-backed companies will inevitably change hands and often sell within a few years. When this happens, it can be impossible to have your warranty or service agreements honored, leaving you on the hook for repairs or replacements that should have been covered.
Go local when you’re looking for long-term accountability
Truly local companies are part of the community we serve — and we rely heavily on word of mouth, reviews, referrals, and community trust to keep us in business. While quick profits are the goal for most PE-backed companies, reputation is the holy grail for those in it for the long term.
Instead of treating every call like a one-time transaction, you can have peace of mind that a reputable local company cares about long-term personal care and will prioritize the homeowner’s comfort — long after the install.