Case Study · Buy-Side M&A
Buy-Side M&A: A $1.99M Colorado HVAC Acquisition with a GM Install at Close
LCG sourced, structured, and closed the acquisition of an HVAC operation in Colorado — $1.99M purchase price, $650K SDE — for an Arizona-based buyer coming out of the marketing industry. The deal stacked a financial partner, an investor capital raise, SBA debt, and seller financing into a clean equity structure, then replaced the exiting seller with a hand-picked GM at close. The buyer is positioned for $200K+ in free cash flow in Year 1, scaling to $300K+ once the investor preferred return clears.
The Mandate
An Out-of-State Buyer, a Financial Partner, and No HVAC Background
An Arizona-based buyer coming out of the marketing industry engaged LCG with a defined thesis: acquire a cash-flowing home-services business he could own without leaving his career, in a category he had no operational background in, in a state he didn't live in. He brought a financial partner to the table for a slice of the equity, but the full stack still needed to be sourced and placed — and the operational gap left by the exiting seller had to be solved before close, not after. HVAC fit the brief: recurring service revenue, route density that compounds, and a category where a strong GM can run the business without the owner on site.
The Target
A $650K SDE HVAC Business with a Seller-Dependent Operating Layer
An HVAC operation in Colorado producing $650K in SDE on a $1.99M asking price. The business had the bones of a clean acquisition — established route base, recurring service contracts, and a service team in place — but the seller was also the day-to-day operator. Any acquisition would have to replace that role on day one, or the customer base and the crew would walk. For an out-of-state, non-operating buyer, that wasn't a closing-side detail. It was the whole deal.
The Challenge
Closing the Equity Stack and Replacing the Seller in Operations
Two problems had to be solved in parallel. First, the financing: the buyer's equity plus the financial partner's contribution didn't fully clear the down payment requirement, so a third source of capital had to be raised on the deal's timeline. Second, the operating gap: with the seller exiting and the buyer staying in Arizona, the business needed a vetted general manager in seat at close. Recruiting a GM during diligence — to a sub-$2M acquisition, in a category the buyer wasn't going to operate in — isn't standard. But without it, the deal didn't work.
The Execution
Sourcing, Diligence, Capital Raise, and a GM in Seat by Close
LCG ran the engagement end to end. We sourced the opportunity, ran financial and operational diligence, and structured the equity stack: 10% from the financial partner, 10% raised through LCG's investor network, 70% SBA financing on the senior debt, and a 10% seller note on a 10-year term with a 5-year balloon. We placed the investor capital on the deal timeline so SBA underwriting could close on schedule, coordinated counsel through purchase agreement and SBA documentation, and — critically — helped the buyer recruit and vet a GM to step into the seller's operating role at close. By signing day, the financing was clean and the operating layer was solved.
The Outcome
$200K+ in Year 1, Scaling to $300K+ as the Pref Return Clears
The deal closed cleanly. The buyer is positioned for over $200K in free cash flow in Year 1 after debt service, scaling to $300K+ once the investor preferred return clears in the out years. The GM is in seat running day-to-day; the buyer remains in Arizona, in his marketing career, with a cash-flowing home-services business operating without him. The broader point: a buyer without HVAC experience, without local presence, and without the full equity stack on his own can still close a clean, structured acquisition — when the financing and the operating plan are built together, not sequenced.
By the Numbers
Deal outcomes that speak for themselves.
From a stalled search to a closed deal and a growing business — in less time than most searchers spend reviewing CIMs.
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