The demographic story is well documented: net migration into Texas, Florida, the Carolinas, Georgia, Tennessee, and Arizona has run at roughly 1.5 million people per year for the last five years, drawn from higher-cost coastal metros. What is under-discussed in essential services M&A is how sharply that migration bifurcates the acquisition landscape.
On the demand side, Sun Belt metros are structurally attractive: newer housing stock, larger homes, higher HVAC load driven by climate, longer landscaping seasons, more pool infrastructure, more roofing demand from hail and hurricane exposure. The addressable market per household is materially larger than in the Northeast or Midwest.
On the supply side, the picture is harder. Every national buy-and-build operator has figured out the same map. Multiples for platform HVAC and plumbing businesses in Dallas, Phoenix, Tampa, Charlotte, and Nashville have expanded 2–3 turns of EBITDA in the last three years. Great businesses in those markets are increasingly bid up by buyers who need to plant a flag more than they need to make a return.
The interesting opportunity, in our read, is the tier of markets one level below: Jacksonville, San Antonio, Greenville-Spartanburg, Chattanooga, Boise, Reno, Tucson, the Florida Space Coast, the Texas triangle secondary metros. Demand tailwinds nearly as strong. Competitive intensity meaningfully lower. Multiples 1.5–2 turns lower. Route density still achievable at platform size.
The mirror image: legacy Midwest and Northeast metros where population is flat or declining, housing stock is older but capex-constrained, and technician labor supply is tightening faster than demand. These aren't uninvestable — we own platforms in several — but the underwriting is different. Growth comes from share gain and price, not from tailwind.
For founders in the growing markets: your business is worth more than it was three years ago, and the buyer universe is deeper. For founders in the flat-or-declining markets: your business is worth what it earns, and the buyer universe is smaller and more disciplined. Both are fine outcomes — but they require different processes to run.
