Trades Industry Consolidation

Patrick suggests acquiring and consolidating trades businesses (plumbing, HVAC, electrician companies) as a roll-up opportunity. These businesses are ripe for consolidation because they have skilled labor moats but aren't too complex to integrate, and many owners are looking to retire.

Key Points:

• Target Industries:

  • Plumbing companies
  • HVAC companies
  • Electrician companies

• Why It Works:

  • Skilled enough to have a defensible niche/moat
  • Not too skilled that you can't roll them up
  • Many owners looking for retirement exits
  • Companies typically sell for 1x or less

• Characteristics:

  • Service-based recurring revenue
  • Local businesses with established customer bases
  • Not like machine shops where innovation is harder
  • Easier to innovate and modernize compared to other trades

• Opportunity:

  • Buy from retiring owners
  • Consolidate operations
  • Modernize systems and processes
  • Create economies of scale