This Confidential Information Memorandum ("CIM") has been prepared by Business Sale & Acquisition Sample ("Advisor") on behalf of Desert Sun HVAC Services LLC ("the Company") for the exclusive use of the recipient to whom it is addressed. The information contained herein is strictly confidential and is intended solely for the evaluation of a potential acquisition of the Company.
By accepting this document, the recipient agrees that:
- This document will be used solely to evaluate a potential transaction and for no other purpose;
- The document and its contents will be held in strict confidence and not disclosed to any third party without prior written consent of the Advisor;
- The recipient will not directly or indirectly contact employees, customers, suppliers, or lenders of the Company without prior written authorization;
- This document will be returned or destroyed upon request.
The financial and operational information contained in this CIM has been compiled from materials provided by the Company and other sources believed to be reliable. Neither the Advisor nor its principals, employees, or agents make any representation or warranty, express or implied, as to the accuracy, completeness, or fairness of the information herein. Prospective purchasers should conduct their own independent due diligence and seek independent professional advice before making any investment decision.
This document does not constitute an offer to sell or a solicitation of an offer to buy any securities or ownership interest. Any sale of the Company will be made pursuant to a definitive purchase agreement that will contain representations, warranties, and other terms that may differ from those expressed in this CIM.
Confidential Information Memorandum — Contents
Confidential Information Memorandum
Executive Summary
Desert Sun HVAC Services LLC ("Desert Sun" or "the Company") is a premier commercial and residential heating, ventilation, and air conditioning contractor serving the Phoenix metropolitan area. Founded in 2005 by current owner Michael Torres, the Company has grown from a two-technician operation into one of the region's most trusted HVAC service providers, employing 22 full-time staff and generating $4.82 million in revenue in fiscal year 2023.
The Phoenix metro market presents an exceptional demand environment for HVAC services. With summer temperatures routinely exceeding 110°F and 300+ days of sunshine annually, HVAC systems are not optional — they are essential infrastructure for residential and commercial tenants alike. Desert Sun has leveraged this structural demand to build a business characterized by recurring maintenance contracts, strong referral networks, and a reputation for same-day emergency response.
Business:Desert Sun HVAC Services LLC
Industry:HVAC Services — Commercial & Residential
Location:Scottsdale, Arizona (Phoenix Metro)
Founded:2005 (19 years of operations)
Employees:18 field technicians, 4 office/admin staff
Prepared By:Business Sale & Acquisition Sample · Powered by ClearValue Advisory
Business Overview
Desert Sun HVAC Services has established a commanding presence in the Scottsdale/North Phoenix corridor — one of the fastest-growing commercial real estate markets in the United States. The Company serves a diverse clientele including single-family residential customers, property management companies, HOAs, restaurants, medical offices, retail centers, and light industrial facilities.
The Company's competitive positioning rests on three pillars: speed (2-hour emergency response SLA within the service territory), expertise (NATE-certified technicians with an average of 9 years of experience), and relationships (over 60% of revenue sourced from returning clients and referrals). These factors insulate Desert Sun from price competition and enable premium service pricing.
Service Territory
Desert Sun's primary service territory covers approximately 1,200 square miles of Maricopa County, encompassing Scottsdale, Paradise Valley, Fountain Hills, Tempe, Mesa, Gilbert, Chandler, and North Phoenix. The Company maintains a network of 7 service vans equipped with common replacement parts, enabling same-day repairs on the majority of service calls.
Products & Services
The Company's service mix is deliberately diversified across installation, maintenance, and repair to smooth seasonal revenue peaks and provide multiple revenue streams from each customer relationship.
| Service Line | FY2023 Revenue | % of Total |
|---|---|---|
| New Installations & Replacements | $2,169,000 | 45% |
| Maintenance Contracts (Recurring) | $1,205,000 | 25% |
| Repair & Emergency Service | $1,060,400 | 22% |
| Commercial HVAC Projects | $385,600 | 8% |
| Total Revenue | $4,820,000 | 100% |
Customer Base & Revenue Mix
Desert Sun serves approximately 2,800 unique customers annually, with 340 active annual maintenance agreement holders providing a predictable revenue foundation. The top 10 commercial clients represent approximately 18% of total revenue — a concentration that is within acceptable M&A parameters given the diversity of the remaining customer base.
Property management represents a significant and growing vertical, with Desert Sun serving as the preferred HVAC contractor for 8 property management companies managing a combined 3,200+ residential units across the metro area.
Operations & Team
The Company operates with a lean, well-organized management structure. The owner handles business development, key account relationships, and vendor negotiations. A field supervisor manages technician scheduling and quality control. An office manager oversees dispatching, invoicing, and customer follow-up.
Critically, daily operations do not require the owner's presence on job sites — the Company's systems, documented procedures, and experienced staff allow the owner to be largely absent without operational disruption. This owner-independence significantly enhances transferability to a new owner.
Team Composition
| Role | Count | Average Tenure |
|---|---|---|
| HVAC Technicians (NATE Certified) | 12 | 8.4 years |
| Install Crews | 6 | 5.2 years |
| Field Supervisor | 1 | 11 years |
| Office Manager / Dispatcher | 1 | 7 years |
| Administrative / Customer Service | 2 | 4.1 years |
| Total | 22 | — |
Facilities & Equipment
The Company operates from a 3,200 sq ft facility in Scottsdale, AZ, comprising a service bay, parts warehouse, and offices. The facility is leased at $5,800/month on a month-to-month basis, with the landlord known to be open to a 3-year renewal for a qualified buyer. Equipment is in excellent working condition and consists primarily of service vehicles (7 branded vans, average 2019 model year) and standard HVAC tools and diagnostic equipment.
Financial Highlights
Desert Sun has demonstrated consistent top-line growth and strong profitability over the three-year review period, driven by favorable market conditions, growing recurring contract revenue, and disciplined cost management.
| Metric | FY2021 | FY2022 | FY2023 |
|---|---|---|---|
| Revenue | $3,980,000 | $4,380,000 | $4,820,000 |
| Gross Profit | $1,950,200 | $2,147,200 | $2,410,000 |
| Gross Margin | 49.0% | 49.0% | 50.0% |
| EBITDA | $742,000 | $814,000 | $892,000 |
| Owner's Compensation (Addback) | $154,000 | $206,000 | $256,000 |
| Seller's Discretionary Earnings (SDE) | $896,000 | $1,020,000 | $1,148,000 |
Growth Opportunities
A strategic acquirer will find several high-probability growth levers that the current owner has not had the capital or focus to fully pursue:
- Commercial Expansion: The Phoenix metro is experiencing a commercial construction boom. Desert Sun has the licensing and equipment to pursue larger commercial projects but has prioritized residential service to date. A funded acquirer could add dedicated commercial bid capacity to capture this growing opportunity.
- Maintenance Contract Penetration: Desert Sun's install list includes approximately 4,200 customers who have never been sold a maintenance agreement. A structured follow-up campaign could add 200+ contracts ($480,000+ ARR) within 18 months.
- Indoor Air Quality (IAQ) Products: Post-COVID consumer demand for IAQ products (UV air purifiers, whole-home filtration, humidification) has remained elevated. Average add-on ticket: $1,800–$4,200. Current penetration is minimal.
- Geographic Expansion: The Peoria/Surprise/Goodyear suburbs to the west are underserved by quality HVAC contractors. A service depot in this area could be staffed with 3–4 additional technicians within 12 months.
Investment Thesis
Desert Sun HVAC Services represents an exceptional acquisition opportunity for a strategic buyer, financial acquirer, or operator/entrepreneur. The combination of essential-service demand, structural tailwinds from Phoenix's explosive growth, recurring contract revenue, an owner-independent operating model, and a clear multiple-expansion runway creates a compelling risk-adjusted return profile.
With a recommended list price of $3,675,000 — representing a 3.5x multiple on trailing weighted SDE — the business is priced at a level that provides both a fair market return to the seller and attractive debt-service coverage for a leveraged buyer on SBA terms.