Industry TrendsJanuary 2025 · 10 min read

Home Services M&A Trends 2025: What Buyers Are Doing Right Now

Q: Is 2025 a good time to sell a home service business?

Yes. PE activity remains high, SBA financing is accessible, and recurring-revenue businesses are commanding premium multiples. Sellers with businesses under $5M in revenue have a strong buyer market.

PE consolidation, rising multiples in recurring-revenue verticals, and the buyers who are most active right now. A market-level view of home service M&A.

Jason Taken

HedgeStone Business Advisors

Home services M&A has been one of the most active sectors in the lower middle market for the past five years, and 2025 shows no signs of slowing. PE firms have deployed over $50B into home services consolidation — and they still have capital to deploy.

PE Consolidation Activity by Vertical

The most active PE consolidation is happening in: Pest control (highest multiples, most mature), HVAC (largest transaction volume), Landscaping (fastest-growing PE interest), Plumbing (rising activity), Pool service (strong route-based model), and Restoration/Fire & Water (insurance-driven recurring revenue). Less PE activity but still active buyer markets: roofing, painting, electrical, and appliance repair.

Rising Multiples in Recurring Revenue Businesses

The clearest trend in 2025: the premium for recurring revenue has widened. Businesses with 40%+ recurring revenue are commanding 0.5x–1.0x more than peers with identical revenue and earnings but no contracts. Buyers have become more sophisticated about the difference between 'revenue' and 'recurring revenue' — and they're paying accordingly.

SBA Financing Still Strong

The SBA 7(a) program remains the primary financing vehicle for individual buyers of home service businesses. SBA rates have come down from their 2023 highs, making financing more accessible. Businesses priced $750K–$3M with clean financials and 1.25x+ DSCR are highly SBA-eligible, which keeps buyer demand strong in that range.

Seller Demographics Driving Deal Flow

The median age of a home service business owner is 52–55. The wave of boomer retirements is creating consistent deal flow across all verticals. Importantly, many of these sellers have never been through a business sale before — they don't know what their business is worth, don't know how to find buyers, and don't know what to expect from due diligence. This information gap benefits sellers who work with experienced brokers.