SPARTA — A Kent County HVAC contractor turned to an acquisition to tap into additional talent and access new markets.
DHE Climate Solutions LLC of Sparta purchased the assets of Visser Heating & Cooling Inc., also of Sparta. The deal, which became effective June 1, was the culmination about eight months of dialogue between the two companies, DHE Managing Partner Scott Bultman told MiBiz.
One of Visser Heating’s principals wanted to get out of the business to pursue another interest and “was looking for a safe place for the company to land after 30 years,” Bultman said.
The two firms had worked together in the past when DHE subcontracted overflow business to Visser Heating during busy times of the year, he said.
When the owner approached him a year and a half ago and said he was considering a sale, Bultman expressed interest. The two ended up negotiating the deal themselves, he added.
The two companies have little overlap, despite both being HVAC contractors. While Visser Heating focused on residential and light commercial customers and worked with several property management companies, most of DHE’s business came in the heavy commercial and industrial sectors, including school systems and factories, Bultman said.
As well, the deal will allow DHE to seize new growth by bringing on their experienced technicians without having to add to overhead, he said, noting HVAC contractors have experienced difficulty finding workers.
According to the Air Conditioning Contractors of America trade group, the industry faces an acute worker shortage in the coming years, as demand ramps up at the same time many employees in the sector reach retirement age. The ACCA estimates a shortage of some 50,000 workers within the next decade if the industry keeps adding people at its current rate.
The industry employed about 332,900 heating, air conditioning, and refrigeration mechanics and installers in 2016, per the Bureau of Labor Statistics. The agency projects employment to reach 381,700 by 2026, growth of 15 percent or more than double the rate of all other professions.
For DHE, the chance to acquire a good business that also had skilled workers who would come along with the deal proved attractive, Bultman said.
“We saw some opportunity that we were held back from by not having enough techs,” he said. “Now we have three more trucks out there making profit.”
With the deal closed, all of Visser Heating’s operations have been wrapped into DHE’s existing site at 1515 10 Mile Road NW in Sparta Township.
Having had prior experience selling a contracting firm years ago, Bultman said the deal with Visser Heating went very smoothly, in part because the two owners knew and understood each other’s business.
“What’s also interesting is that we also invoiced almost the same amount — to the dollar — last year,” he said. “This was the case of two healthy companies being able to work out a deal and merge.”