5.4.10.3Vertical

Plumbing Supply Houses

Distributors supplying plumbing materials to contractors.

Market snapshot

These figures describe Plumbing, HVAC & Mechanical Supply (5.4.10), the segment that Plumbing Supply Houses sits within. They are not figures for Plumbing Supply Houses on its own.

Market size
~$204B
Growth
~10.8%CAGR (2017–22, nominal)
Companies
~5,246 firms
Firms by employee count

73.4% of firms have fewer than 20 employees: 3,849 micro-businesses, below most mandates.

The investable universe1,397 firms with 20+ employees
20–99
90865%
100–499
31022%
500+
17913%

The fastest growth in the sector, and unusually it is volume as well as price: residential HVAC replacement, refrigerant transitions and construction demand all landed in the same window. Branch-based, relationship-driven and highly fragmented, it is the profile that has drawn the most active roll-up interest in distribution.

NAICS 423720, 423730, 423740. U.S. Census Bureau, 2022 Statistics of U.S. Businesses; U.S. Census Bureau, 2022 Economic Census.

Business model & economics

Revenue model

Plumbing/HVAC product resale through branch networks

Key economics

Revenue per firm
$38,967,827
Revenue per employee
$1,110,451
Employees per firm
34.5
Recurring revenue
High

recurring contractor reorder and replacement

EBITDA margin
Thin, branch-density-driven
Capex intensity
Low

Characteristics

  • Scale-driven: payroll is only 7% of revenue, so the cost base is assets, not headcount
  • Deep strategic-buyer pool: 179 firms exceed 500 employees, so a scaled asset has trade buyers
  • Scaled distributors (Ferguson, Watsco, Core & Main) lead.
  • HVAC replacement adds non-discretionary demand.
  • One of the most successfully consolidating segments.

NAICS 423720, 423730, 423740. U.S. Census Bureau, 2022 Statistics of U.S. Businesses; U.S. Census Bureau, 2022 Economic Census.

M&A deal context

Deal activityHigh

Who’s acquiring

  • National plumbing/HVAC distribution strategics
  • PE-backed distribution platforms
  • Regional consolidators

What’s driving deals

  • Branch-density and contractor-relationship scale.
  • HVAC-replacement and waterworks demand.
  • Roll-up of regional independents.

Find Plumbing Supply Houses acquisition targets

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