Ottawa’s HVAC sector has long been made up of small owner-operator businesses, but as owners age, local players see an opportunity in consolidating a fragmented industry.
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Ottawa’s HVAC sector has long been made up of small owner-operator businesses, but as owners age, local players see an opportunity in consolidating a fragmented industry.
“I hate the term but you could say it’s the silver tsunami of baby boomers retiring,” Joseph Pamic told OBJ. “There are a lot of business owners who are at that transition stage and they want a good home for their people and their customers.”
Earlier this month, Pamic’s eastern Ontario residential HVAC company King West Partners was acquired by KCM Holdings Group, a subsidiary of Meridian Home Services. But before the company was purchased, Pamic said he and his business partners were themselves taking advantage of the movement within the sector.
In 2022, they started building the company by acquiring Orleans-based Parent Heating & Cooling. A year later, they added competitor Forest HVAC, further expanding their footprint in the east end of the city. A few months after that, they grew south into the Prescott area with the purchase of Sauve Heating & Air Conditioning. Then, in 2025, they made a final acquisition, purchasing Stan’s HVAC, strengthening their presence in central Ottawa.
“Despite the slowdown in homebuilding, Ottawa is a good climate for the heating and cooling business,” he said. “It gets really cold in the winter, really hot in the summer. So people need these units and the population has continued to grow in the city, which means more demand.”
Pamic said there were a variety of advantages that drew him to HVAC in the first place.
“We liked a few of the characteristics of the business. (There are) a lot of maintenance contracts, because HVAC units are moving components that need to be maintained annually, so there’s a constant touchpoint with customers,” he said.
“Probably the most unique factor is that, as an HVAC contractor, you are the main distributor of the product. You don’t get to sell products as a plumber or an electrician. But in the HVAC space, you get this added revenue of actually being a dealer of the equipment, which is probably the most meaningful part of the business versus just supplying labour.”
These sorts of advantages have created competition in recent years as larger HVAC companies and private equity firms keep an eye out for smaller local businesses gearing up to sell.
A significant uptick in transactions is expected in the HVAC sector through 2026 and into 2027, according to an M&A review released earlier this year by Toronto-based investment banking firm Origin Merchant Partners.
The report found that for sellers in the HVAC space, there will be “no shortage of options” if they have growing operations, strong teams, distribution capabilities, reputations and brand awareness.
“Competition is, and will remain, fierce for best-in-class HVACR businesses,” the report said. “For many companies, 2025 was marred with uncertainty around tariffs. However, those that we speak with regularly are seeing record backlogs and bookings for the second half of 2026 and beyond, which we believe will be the primary driver for deal activity going forward.”
According to Pamic, the majority of available businesses are well-established, small-scale operations. While most have been around for decades, few have grown beyond a handful of technicians. But he said their expertise and client base are attractive assets for larger companies, and the benefits of joining a larger organization can be appealing to sellers.
“There are so many companies that are one or two guys in a truck,” Pamic said. “There are very few that reach scale. A 10-person company cannot have a bunch of middle management because it would just eat up any cash flow. In a larger organization, you provide more opportunity for advancement for your people and typically provide a better service.”
Ottawa-based Tralo Heating and Cooling is one larger local company looking to get in on the M&A action.
“We haven’t done an acquisition yet and it’s something we’re starting to look into because we were able to grow organically up to a certain point,” said co-founder and CEO Louis Lacombe-Denis. “The growth rate has hit a sort of plateau.”
The company — which rebranded from its previous name, Prestige Home Improvement, earlier this year — has been recognized by OBJ as one of Ottawa’s fastest-growing companies for the past two years, with expansions into areas like Nova Scotia, where it’s working to strengthen its presence.
But its business model is different from the typical owner-operator HVAC company, which tends to be technician-led. Instead, Lacombe-Denis and co-founder Travis Moriarty created a network of sub-contractors to provide the services, while using their own backgrounds in sales and marketing to sell them.
While that model has worked for the past few years, Lacombe-Denis said a different approach is needed going forward to continue growing the company's capacity.
"What's been the most challenging for us has been the operational side of things: getting qualified technicians on the team, getting the assets, like the vehicles and all that,” he said. "Now that we're doing most of our jobs in-house, it's a lot of capex that is required to build. And there we've hit a certain threshold where we can't invest enough for the growth that we want to have and one of the solutions to that is to acquire some companies."
Tralo will be pursuing acquisition opportunities over the next 12 months, with the hope of making its first move sometime in 2027, he said.
While plenty of opportunities exist, he added that there is competition, especially from private equity firms.
"We are well aware that there are big whales in the industry, like private equity firms and other big companies that are doing mass acquisitions right now,” he said. “The only downside is that private equity firms have a lot of money and they will probably be able to outbid companies like us.”
Still, Tralo could have an advantage over bigger buyers, even if it can’t outbid them.
Moriarty, co-founder and president of Tralo, said that, in some instances, a small-scale operation may not be attractive to a private equity firm but would appeal to a larger local company.
“A company that would be beneficial to our companies could be very small, maybe doing $1 million or $2 million in revenue and their profit is maybe $300,000 to $500,000,” he said. “Private equity probably wouldn’t look at those companies at all. But for us, if we buy that in a local market like Ottawa, that could be valuable to us. We could acquire three or four technicians and a client list on service and maintenance plans.”
Lacombe-Denis said that, for some sellers, it might be as simple as wanting to sell to a local buyer.
“I think any local operator will want to sell to another local company,” he said. “It really comes down to the sellers and what they want out of it. In most cases, large private equity firms will be able to outbid us. We’ll just have to build that relationship with the seller and try to come up with better deals. There’s not one way to make a deal happen.”
