Despite what these offers could do for an owner, some remain independent, even in the face of economic uncertainty, labor costs, and competition from larger platforms. 

We spoke with contractors who have turned down offers from private equity. Here’s what they had to say about their experiences. 

Parham Heating, Cooling, Plumbing, and Electric in Trenton, Tennessee, was formed in 1990 by Randy Parham. A year later, his wife, Reba, joined the company. Their son, Chris, has become a co-owner. The company employs about 50 people and brings in $10 million in revenue. 

They’re an ideal company for private equity, but despite receiving proposals since before the pandemic, the family has yet to pursue an offer. Chris said it comes down to his enjoyment of working on the business rather than in it, and he values the independence that provides. 

“As an independent owner, we're able to make the decision and the choice to maybe sacrifice some gross margin points to keep some people on board with us that we know are rockstars that we need as we continue the growth that we have,” he said. “If we were to sell, I wouldn't have that ability to make that decision. I wouldn't be in the owner's seat in that aspect. And that's one of those things that I'm not at a point in my career where I'm ready to give that up just yet.” 

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For Peter Bonfe, the second-generation owner of Bonfe’s Plumbing, Heating, and Air Service in the Minneapolis/St. Paul community, offers have been sent his way since 2018. However, he too enjoys running his business, which currently employs about 275 people, and doesn’t believe private equity would preserve the culture. 

“I get it, they're investors. To them, it's only about money. And I don't blame them for that. And they have to go find good places to invest their money,” he said. “But we don't see it that way. We see it that we want to build, we're great operators, and we like operating.  

“And we're okay with our inefficiencies in our operations, but we know what those inefficiencies are, and we operate around those inefficiencies because sometimes, those inefficiencies have to do with the side of being human.” 

Founded in 2011, the Cooling Company in Las Vegas has a team of 20 serving more than 60 ZIP codes across Clark County. Tiago Santana, co-founder, is concerned that the common roll-up strategy of acquiring, keeping a company’s name, standardizing pricing and dispatch, and selling in three to five years results in training gaps and weakened technician incentives. 

“That clock is not a detail. It’s the whole story. Because the things that make a home-services company worth owning — technician relationships, customer trust, local reputation — are exactly the things a three-to-five-year exit window can’t preserve,” he said. 

Bonfe said remaining independent has given them certain advantages. The ability to choose people over dollars is what helps keep his company competitive. He indicated that having a family-owned business means getting to know the community better, which leads to better customer service. 

“We've done brand studies and … a lot of them show that people do believe that they're going to get better service and they're going to be at better responsiveness from a family-owned business. I don't know if that's true at this point or not. I believe it is true with us,” he said. 

Chris said that as owners, both customers and employees can come directly to them with questions or concerns, which he believes is harder to preserve under outside ownership. 

“We've got two employees now who are from two separate private equity firms in our area. And I just asked them that question ... I said, ‘Hey, just out of curiosity, from everybody's viewpoint, what sets us apart?’ And before I could even finish the sentence, one technician is saying, ‘I can come and talk to you. And that makes a big difference.’” 

For The Cooling Company, Santana expressed similar sentiments, saying they remain focused on the customer versus maximizing sales.  

“When you call an independent, family-owned company for your a/c, you're getting a few things that are structurally different from the consolidated alternative,” he wrote. 

While remaining independent comes with its advantages, it also makes remaining competitive difficult and costly. Larger firms can leverage national agreements with vendors, have centralized marketing, and access to capital to enhance their operations. 

“It can be a challenge at times. With larger private equity groups, you’ve got a larger buying power,” Chris said. “We try to be as competitive on pricing as possible, but when you’ve got a larger group of people that’s able to buy in several different states, a lot of times that gives them an opportunity to get a few percentage points cheaper.” 

Independent contractors also face pressure when competing for labor. 

“You're having to … increase your comp plans to attract the talent, and then you're competing against the smaller companies, that's just one or two trucks that may not be charging what they need to charge to truly cover their overhead,” he said. 

Bonfe said he has had technicians leave for a private equity-backed company in his market that promised they wouldn’t work nights or weekends, illustrating how ownership models can influence staffing and scheduling. 

“That’s fine. Put your priorities where your priorities are, but I don’t think that’s a sustainable model for our customers long-term,” he said. 

In a blog post, the Cooling Company notes that remaining independent comes with slow growth, having to pay well to retain their technicians, and the inability to outspend larger firms on marketing. 

“Every truck we add, every technician we hire and train, every new bay and tool: it comes out of money we actually earned, not money an investor fronted us,” Santana wrote. “That means there are seasons where we're stretched thin, where demand outruns our capacity, where I wish we could move faster.” 

As much as these contractors have enjoyed their independence, is there an offer that would make them change their minds? 

Bonfe’s attitude is to never say never, as the right firm might break the stigma, but he noted he wouldn’t sell to anyone whose plan was to turn around and sell again. 

“Could I be duped? Maybe,” Bonfe said. “But that's why I'm considering my number one options: my employees and my family. And I'm trying to build my children to prepare for a future of either ownership or leadership.” 

His advice for contractors considering an offer is not to sell out of fear. He compared how some firms push for a sale to HVAC contractors who use scare tactics to sell replacement jobs to customers. 

“They make you sound like there’ll never be a better time to sell your business and there’ll never be a time to get as much money, and you’ll never have this opportunity again, and you’re never going to be able to compete,” he said. “We’re competing just fine. We have grown every single year.” 

Meanwhile, the Cooling Company makes it clear that it isn’t on the market. Wellington Santana, co-CEO and COO, offered a categorical assessment of the private equity model based on their observations. 

“The PE firms come in, cut the experienced techs, and flip the company in three years. That works for their investors. It does not work for the family whose a/c fails on a 115° Saturday. We have never taken their money and we never will,” he said. 

Despite repeatedly turning down offers, Chris said he doesn’t view private equity as bad and feels it has its place. For him, the only way he would consider an offer is if it was best for the company as a whole as well as the family. 

“When it gets to the point [where] I have taken it the farthest point I can take it by myself, and it’s not going to get any better, or we’re not going to grow it any farther without somebody helping, that’s when we look for outside investors,” he said.