Midwest Mechanical Services
Commercial HVAC Services·Indianapolis, IN·Founded 1987·47 employees
Type: Bolt-onWhy it fits criteria
Solid bolt-on candidate with manageable founder transition risk and reasonable valuation. Recurring revenue base and customer diversification are the standout strengths; geographic concentration and recent customer loss are the central diligence priorities.
Revenue
$14.2M
EBITDA
$2.1M (15% margin)
Growth
8% YoY
Recurring
32% of revenue
Asking price
$11.5M at 5.5x EBITDA
Fair value
$10.5M – $12.0M
Risks
Founder transition — Dale Thornton, 68, retiring; children not in business
Indianapolis MSA concentration (~70% of revenue)
Dayton foreman indicated possible retirement within 24 months
Recent $380K customer loss to national HVAC consolidator
Growth ideas
Columbus, OH market expansion with existing customer pull
Plumbing cross-sell to installed HVAC base
Increase maintenance contract attach rate from 32% toward 50%+
In-house equipment financing program
Key strengths
- ✓
Long customer tenure — 7.4 year average
- ✓
41% of revenue under preferred provider or maintenance contracts
- ✓
ServiceTitan deployed (2022); diversified customer base
If proceeding — diligence priorities
What to investigate next
- I.
Technician retention interviews across Indianapolis and Dayton crews
- II.
Customer contract analysis — preferred provider and maintenance terms
- III.
Revenue attribution to founder relationships vs. institutional contracts
- IV.
Lost customer analysis — $380K multi-tenant account and replacement pipeline
- V.
Licensing audit — EPA certifications, municipal permits, union exposure
Next step: Request QoE with full P&L detail, technician roster with tenure data, schedule management meetings to assess depth beyond founder.