Chances are one of the service trucks you have seen drive by has recently changed hands. Private equity investors have purchased nearly 800 HVAC, plumbing, and electrical companies since 2022.
Companies like Redwood Services, which acquired Aaron Rice’s plumbing business, are injecting management expertise, marketing investment, and back-office sophistication into what were once local, independently owned shops. Rite Way, a Tucson-based HVAC company, grew from $30 million to $70 million in revenue under Redwood’s ownership, a sign of how capital and optimization are driving scale.
What This Means for Wholesale and Distribution
For decades, wholesale and distribution businesses have thrived on trust, personal connection, and long-standing partnerships. But as PE-backed firms modernize and digitize, the rules are changing. Efficiency and automation are replacing handshake deals and local loyalty as the new growth levers.
Private equity firms scrutinize pricing, costs, and margin performance in ways traditional contractors rarely do. Redwood Services CEO Richard Lewis put it plainly: “If the price of a screw goes up, it gets passed on to the customer.” This disciplined approach stands in contrast to wholesalers who have historically relied on personal relationships to maintain business stability.
The Digital Shift Is Accelerating
With PE capital driving rapid modernization, contractors are embracing digital tools, eCommerce, and automation. Companies like Aaron Rice’s and Rite Way are proving that technology investment can expand reach and improve profitability.
For wholesalers and distributors, this means your customer base is evolving faster than ever. The trades are no longer purely relationship-driven. Buyers expect digital experiences that match the convenience and speed they see in their own privately held or PE-backed operations.
If you’re still treating eCommerce and digital enablement as secondary, now is the time to change course. Private equity’s involvement signals a long-term transformation across industries, from skilled trades to manufacturing to distribution. Those who fail to digitize risk being left behind by faster, more data-savvy competitors.
Final Thoughts
This trend isn’t just a financial story, it’s a strategic wake-up call. The backbone of the distribution industry has always been relationships. But as your customers consolidate, optimize, and scale, the definition of “relationship” is changing. Today, being a trusted partner means combining personal service with digital convenience and operational agility.
As private equity reshapes your customers’ world, how are you adapting yours?