OUR DAILY THREAD: Private Equity's Insatiable Appetite
They've got a lot of destruction on their plates
THE SET-UP: Nothing epitomizes the surreality of this economy better than a story I saw back in August on private equity (PE) “snatching up” small HVAC businesses in Boise, Idaho. It turns out that Boise’s “mom and pop” heating and air conditioning shops are not alone. The Wall Street Journal reported last year on PE’s nationwide bid to “roll-up” these small business and squeeze-out the competition:
Private equity, however, is no foreign player in the skilled trades these days. PE firms across the country have been scooping up home services like HVAC—that is, heating, ventilation and air conditioning—as well as plumbing and electrical companies. They hope to profit by running larger, more profitable operations.
Their growth marks a major shift, taking home-services firms away from family operators by offering mom-and-pop shops seven-figure and eight-figure paydays. It is a contrast from previous generations, when more owners handed companies down to their children or employees.
The Journal’s year-old take was mostly positive:
The wave of investment is minting a new class of millionaires across the country, one that small-business owners say is helping add more shine to working with a tool belt.
“You don’t need to go to Silicon Valley to have a successful career and entrepreneurial opportunities,” says Brian Rassel, a partner at the Detroit-based Huron Capital, which focuses on investments in service companies.
Sounds great, right?
Jane and John Q. Public finally get a crack at the pie Silicon Valley has been scarfing down like that kid in the movie “Stand By Me.” In the case of Boise, it’s working out almost as well as Stand By Me’s infamous pie eating contest:
A once-locally owned HVAC and plumbing company is under investigation by Idaho Attorney General Raúl Labrador.
On April 10, the Consumer Protection Division of Labrador’s office opened an investigation into Right Now Heating, Air Conditioning & Plumbing after nine complaints from customers in the first five months of 2025, according to public records obtained by BoiseDev. An investigative demand letter to Right Now from the AG’s office, obtained by BoiseDev, said the company is under scrutiny after allegations of “multiple and separate violations of the Idaho Consumer Protection Act and the Idaho Rules of Consumer Protection.”
According to a report by BoiseDev.com:
Allegations include failing to provide customers with a written contract before beginning work, misrepresenting damages to HVAC, plumbing or electrical equipment, misrepresenting emergencies to induce customers into acting quickly on repairs or to replace systems, intentionally damaging or sabotaging customers’ systems, refusing to honor the terms of warranties, and intentionally installing improper HVAC, plumbing or electrical equipment to generate the need for more service calls.
Notably, BoiseDev.com did not seek comment from Right Now Heating, Air Conditioning & Plumbing. They turned to Apex West Region Holdco, but they “did not respond to a request for comment about the ongoing investigation.” So I went to Reddit for comments in a thread that started with: “Was let go from my company bought by Apex a year ago.” Underneath a that “rant” was a barrage of complaints from employees who were “rolled-up” when PE bought their employer:
I was a “topped out” tech at 26 and all I ran was callbacks on morons who couldn’t change a capacitor but man, they could sell fire to the devil. The company wouldn’t pay more but had all kinds of sales incentives. Spiffs. Call me ole fashioned but I just want to fix whatever and go about my day.
…and…
I also work for a company owned by Apex. I started back in April. Hands down the worst company I have ever worked for in any industry. 7-Year residential installer. Three meetings a week for sales training , lately been fighting for paycheck to be correct every week. Their policy is if they don’t get paid you don’t get paid. I’m currently owed back pay of about 2K from previous jobs.
…and…
My old company got bought by APEXs crooked asses. I quit when they sold a full system to an old lady who only needed new thermostat wire ran. She paid about 18k when she only needed 50ft of low voltage wire.
…and…
Going through the same thing with the company I’ve been with. Picked up by Apex and it’s been downhill since.
…and my favorite:
Time to start your own shop.
It’s perfect, really. Apex is creating market opportunities for independently owned, customer service-minded HVAC businesses by buying up independently owned, customer service-minded HVAC businesses and “rolling them up” into faceless, hard-selling, corner-cutting corporate entities.
That process underscores the massive amount of wealth that’s pooled on the supply side of the economy. Investors have so much capital … they are willing to gobble-up HVAC shops. And roofing businesses. And lumber yards. And dental practices, optometrists, accounting firms, daycare centers, eldercare services, car washes and bowling alleys.
They’re even buying up trailer parks (as you’ll see in today’s THREAD).
So far, these other businesses haven’t been quite as disastrous as PE’s move into hospitals. A new Harvard Medical School study detailed the deadly impact of the takeover. These are the takeaways:
Patient deaths increased in the emergency departments of hospitals acquired by private equity firms compared to similar hospitals, a nationwide study has found.
Researchers linked the increase in mortality to cuts in salary and staffing levels.
The findings amplify concerns about the growth of this for-profit ownership model in health care delivery.
Unsurprisingly, patients are paying the ultimate price for this takeover. Harvard found “Medicare beneficiaries in the emergency departments” suffer “seven additional deaths per 10,000 visits after acquisition” by a PE firm. That translates into “a 13 percent increase from a baseline of 52 deaths per 10,000 visits.” That’s because:
The data showed that after acquisition, the private equity hospitals reduced salary expenditures in the emergency department by 18 percent and in the ICU by 16 percent compared to hospitals not acquired by private equity. They also reduced hospital-wide full-time employees by an average of 11.6 percent and salary expenditures by 16.6 percent relative to non-private equity hospitals.
The Private Equity Stakeholder Project’s “Private Equity Hospital Tracker” is following the destructive path PE is blazing through America’s troubled healthcare system:
We have seen private equity firms aggressively loot safety net hospitals, strip out valuable real estate, cut critical but less profitable services, and exploit government funding programs designed to support and stabilize healthcare access.
And they’ve been tracking the takeover:
Approximately 488 US hospitals are owned by private equity firms. That represents:
8.5% of all private hospitals
22.6% of all proprietary for-profit hospitals
At least 27.7% of private equity-owned hospitals serve rural populations.
A handful of private equity firms dominate the list of private equity-owned hospitals: Apollo Global Management (Lifepoint Health, ScionHealth), Equity Group Investments (Ardent Health Services), One Equity Partners (Ernest Health), GoldenTree Asset Management and Davidson Kempner (Quorum Health), Surgery Partners (Bain Capital), and Webster Equity Partners (Oceans Healthcare).
Texas has the most private equity-owned hospitals (108).
New Mexico has the highest proportion of private equity-owned hospitals (36.2%).
Nearly a quarter (22.6%) of private equity-owned facilities are psychiatric hospitals.
So, here we are with an incredibly expensive, notoriously unresponsive healthcare system dominated by the highly-profitable health insurance industry … and PE sees it as a great chance to squeeze more money out of infirm Americans. That’s the same mentality that now has them jumping into the electric utility game. Rising prices stoked by hyperscaling data centers funded by wealthy investors and corporations have PE firms salivating.
And on it goes.
As for mom and pop HVAC companies, Forbes recently noted that PE’s appetite remains insatiable:
For example, Sila Heating & Air Conditioning has made 28 acquisitions since receiving investment from Morgan Stanley Capital Partners in 2021 (Goldman Sachs Alternatives acquired a majority stake in Sila in Nov. 2024), while FirstCall Mechanical has made 15 buys since private equity firm SkyKnight took control of the plumbing and HVAC company in 2022, according to a study from accounting and advisory firm PKF O’Connor Davies.
This all points to a new phase of inequality. As Forbes noted, “private equity firms have been moving downmarket for years.” It’s ironic that after years of hearing people say “Eat The Rich” … the supply side of the economy is so heavily supplied with capital, they’ve decided to gobble up “the little guy.” - jp
‘They are squeezing everybody in this park to death’: Owners of manufactured homes get little protection as private equity moves in
https://wausaupilotandreview.com/2025/10/03/they-are-squeezing-everybody-in-this-park-to-death-owners-of-manufactured-homes-get-little-protection-as-private-equity-moves-in-2/
Private equity giant will control northern Minnesota’s biggest power company
https://www.startribune.com/private-equity-giant-will-control-northern-minnesotas-biggest-power-company-after-state-approves-deal/601477324
Private equity enters Ohio healthcare with $515M Summa acquisition
https://www.cleveland.com/healthfit/2025/10/private-equity-enters-ohio-healthcare-with-515m-summa-acquisition.html
Kentwood manufacturer Charter Industries sold to Illinois private equity firm
https://www.crainsgrandrapids.com/news/manufacturing/kentwood-manufacturer-charter-industries-sold-to-illinois-private-equity-firm/
Private Equity Is Set to Profit From New School Vouchers
https://jacobin.com/2025/10/private-equity-schools-trump-vouchers
NFL could allow private equity to own more than 10% of teams
https://www.sportspro.com/news/nfl-investment-private-equity-stakes-limit-goodell-international-october-2025/
Big Ten’s $2B Private-Equity Deal Talks Face Michigan Resistance
https://frontofficesports.com/big-tens-2b-private-equity-deal-talks-face-michigan-resistance/
Michigan, Ohio State reportedly not on board with private equity backing Big Ten
https://www.detroitnews.com/story/sports/college/big-ten/2025/10/02/michigan-ohio-state-reportedly-not-on-board-with-private-equity-backing-big-ten/86475535007/
World Rugby’s dinosaurs and old-school arrogance are failing us, and Private Equity will rip the game apart
https://www.theroar.com.au/2025/10/04/world-rugbys-dinosaurs-and-old-school-arrogance-are-failing-us-and-private-equity-will-rip-the-game-apart/
Private equity’s accountancy binge risks implosion
https://www.raconteur.net/finance/private-equitys-accountancy-binge-risks-implosion
Private-Equity Fundraising Slump Deepened Through September
https://www.wsj.com/articles/private-equity-fundraising-slump-deepened-through-september-912b840b
Private credit gets creative as fundraises take longer than ever
https://www.investmentnews.com/alternatives/private-credit-gets-creative-as-fundraises-take-longer-than-ever/262381