A PE fund was evaluating a mid-market HVAC distributor with $120M in revenue. The deal team needed to validate customer concentration risk and assess whether gross margins were sustainable given e-commerce disruption in the channel. Timeline: 10 business days to IC.
Commercial Diligence for a Mid-Market HVAC Distribution Acquisition
A PE fund evaluating a $95M HVAC distributor needed to validate margin sustainability and customer concentration risk in 10 business days. Standard data-room analysis was not enough.
- Industry
- Private Equity
- Timeline
- 10 business days to IC
- Key outcome
- $8M purchase-price adjustment
- Confidentiality
- Anonymized
01
The problem
02
Our approach
TCE sourced seven experts across three categories: former regional VPs at competing distributors, procurement managers at major HVAC contractors, and a former executive at the target company (cleared for compliance). Calls were structured around three thesis questions: margin sustainability, customer switching costs, and e-commerce penetration rate.
03
Featured expert
Former VP of Operations at a top-5 HVAC distributor with 15 years of experience across the Southeast.
04
The outcome
Headline result
$8M purchase-price adjustment
The diligence surfaced a margin compression risk in the target's highest-volume product line that had not appeared in the data room. The deal team used this intelligence to renegotiate the purchase price, saving the fund an estimated $8M on a $95M transaction. IC memo cited the expert research as the primary basis for the price adjustment.
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