American Residential Service, LLC, a nationwide HVAC services company, recently acquired 24/7 Service Corp. 24/7 is a Las Vegas based HVAC , plumbing and sheet metal company that serviced the Las Vegas and Phoenix markets.

ARS now has a solid service footprint throughout the southwest U.S.

Deal Analysis

This deal falls squarely in the roll-up strategy backed by Clear Rock. In an industry that remains highly fragmented, but is typically dominated on a local level by a small number of market leaders, geographic consolidation makes sense.

In the case of ARS, they added a strong regional player which not only had both HVAC and plumbing lines of business, but also a sheet metal shop. Many businesses in the industry can benefit from having a central company owned sheet metal shop serving multiple markets - which serves to reduce overhead rates and drive utilization in the sheet metal business.

With significant integration savings attainable in an "marketshare-driven" environment, integration plays like this will continue to be the trend in the HVAC M&A market.