HVAC Distributors: Before You Sell, Ask Two Questions
10. 15. 26Author: Kevin Sarb
Publication: HVACR Trends
Date: October 12, 2026
Watsco’s agreement to acquire The Granite Group, Home Depot’s acquisition of Mingledorff’s, and SRS Distribution’s purchase of Lohmiller and Company have put independent heating, ventilation, air conditioning, and refrigeration distributors on notice. Before asking whether to sell, Kevin Sarb, Principal in the Industrials Practice at Ducker Carlisle, argues that smaller, regional, independent distributors must first ask two questions: who am I, and why am I here?
Why Independent Distributors Continue to Succeed
Standard economic theory would predict far more consolidation in distribution than has occurred. Large national platforms have stronger supplier bargaining power, optimized logistics, and economies of scale. Yet the long tail of smaller, regional, local distributors persists. The answer lies in customer intimacy. Independent distributors know their customers both as businesses and as people. They know their markets. They have consistently come through for customers in tough situations. No corporate policy stops a local branch or salesperson from going above and beyond.
The largest acquirers appear to understand this. Watsco said The Granite Group will continue to operate as an independent business under its existing management team. SRS said Lohmiller’s owners will continue to lead that company.
The consolidation test, therefore, is whether joining a larger platform will strengthen or erode customer intimacy. Some national platforms have bought regional independents, forced standard policies on them, angered customers, and lost business. Conversely, when a buyer invests in capabilities that enhance customer intimacy, consolidation can benefit the seller, the buyer, and the customer.
The Independent Difference
Independent distributors know their customers’ businesses in depth, which positions them to partner with customers and create new, mutually beneficial value. Customers now ask distributors for services such as procurement, kitting, prefabrication, jobsite or on-location inventory management, and technical support. Working closely with customers to understand which services would best help their business processes reveals the capabilities and investments needed to deepen customer intimacy. With this knowledge and a plan, distributors can show potential acquirers what needs to be done and test whether they can and will provide the resources needed.
Start this evaluation with the value chain. Map who performs each value-added activity today. The map will reveal where expansion is possible and where a distributor could perform an activity more effectively than the incumbent.
Questions to Ask Any Acquirer
Before signing, ask any potential buyer three questions:
How did customer retention and branch-level service change at the distributors you previously acquired?
Which decisions will stay with local branches, and which will move to headquarters?
Which capabilities in our plan will you fund, and on what timeline?
As consolidation accelerates, the distributors who maintain and enhance customer intimacy will succeed, whether they stand alone or sell. If a consolidator historically has standardized acquired distributors in ways that damaged customer intimacy, avoid them. If they have provided capabilities and investments to enhance it, the partnership can work for everyone.
This article was first published in HVACR Trends.