The 2026 AHR Expo was held February 2–4 in Las Vegas, drawing more than 53,000 HVAC professionals to the Las Vegas Convention Center. Our primary takeaway? Wear comfortable shoes – we logged over 15,000 steps per day navigating three expansive exhibit halls. Beyond footwear strategy, a few notable industry observations worth highlighting:
2026 HVAC Outlook
The prevailing sentiment at the Show points to a recovery beginning mid-2026 and gaining momentum into 2027. While residential new construction remains a near-term headwind, replacement activity continues to anchor demand. OEM commentary suggested stabilizing residential trends alongside sustained strength in light commercial and Applied markets. The refrigerant transition to R-454B is increasingly viewed as a tailwind, reinforcing recovery this year.
M&A Volume
We appear to be at an inflection point. If 2024 was “the year of the add-on” and 2025 followed a similar script, platform opportunities are now re-emerging and building momentum into the first half of 2026. We are seeing this across both HVAC manufacturing and distribution.
Valuations
Valuations remain healthy. A specific M&A panel cited mid-single-digit EBITDA multiples as a general benchmark – in our view, that materially understates the market for quality businesses. While outcomes vary based on size, growth profile, management depth, and market positioning, well-positioned platform companies with strong leadership and credible growth plans can command well into double-digit EBITDA multiples. Strategic buyers and financial sponsors alike continue to show willingness to pay for durable growth in a sector where organic expansion has been hard to find.
Implications for Business Owners
After several years of noise – A2L transition, tariffs, supply chain disruption – many family and founder-led businesses that had paused M&A considerations are re-engaging. Confidence is improving, and those who waited for clearer visibility appear increasingly prepared to explore strategic options, underpinning both the economic momentum and transaction volume we anticipate across HVAC this year.
Carter Morse & Goodrich remains active across the HVAC ecosystem – manufacturing, distribution, and service – advising family and founder business owners on their once-in-a-lifetime transactions. If you would like to discuss current market dynamics or assess your readiness for a potential transaction, please reach out to our HVAC team, led by Chris Reenock, Managing Director.