Technical property services: Secure revenue and demand for diversification drives valuations
Warwick Face Partner
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e wface@pitcherpartners.com.au
Kieran Wallis Partner
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Listed Technical Property Service providers continue to trade at exceptional multiples, supported by robust earnings and sustained construction and maintenance demand.
Pitcher Partners expects M&A to remain a key strategy for participants seeking to diversify earnings across geographies and industry specialisations.
Industry Outlook:
• Strong growth driven by sustainability mandates, smart-building adoption, and rising multiresidential and commercial demand.
• Queensland leads the nation in FY25 building approvals, fuelled by record interstate migration and significant public investment in transport and housing infrastructure.
Deal Volumes:
• 10 transactions in Australia for LTM September 2025, following 11 in the prior period.
• Well above the 10-year average of 7 per year.
• 75 deals recorded over the decade (with 5 transactions > $200m).
Deal Values:
• Disclosed deal values totalled approx. $1.6b for LTM September 2025 ($85m ex. 2 jumbo deals), consistent with $81m in the prior period.
M&A Highlights over Last Twelve Months:
• June 2025: Pacific Equity Partners to acquire Johns Lyng, reinforcing private equity interest in resilient, service-based building and restoration platforms.
• Sep 2025: NRW Holdings acquired Fredon Industries, entering high-value building services and expanding electrical, mechanical, and maintenance capabilities.
Market Update
Strategic M&A activity in the Australian Technical Property Services sector is gaining momentum, supported by international players expanding into the market, ongoing domestic consolidation, and increasing private equity participation. In addition to Pacific Equity Partners interest in Johns Lyng Group:
• Japan-backed Ellis Air (Sojitz Corporation) continued its consolidation strategy in the HVAC sector by acquiring Climatech NSW in January 2025, reinforcing its footprint across Australia’s commercial air-conditioning market.
• Austco Healthcare acquired Amentco in February 2024, a Queensland-based provider of nurse call and security systems and a certified Austco Nurse Call reseller. The acquisition strengthens Austco’s direct sales capability, broadens its healthcare solutions, and supports growth in the Australian healthcare market.
Selected Transactions: Strategic Rationale
• Expand service offerings, new capabilities and addressable market.
• Maintenance services generating annuity-style revenue (~70% from long-term customers).
• Capital-light, cash-generative model with exposure to major infrastructure projects (stable and scalable growth).
acquired acquired
• Generate recurring revenue and enjoy long-standing customer relationships across the Mining, Renewable Energy, Utilities, Industrial, and Local Government sectors in regional NSW, South Australia, and Victoria.
• Favourable industry dynamics driven by non-deferrable demand, strict regulations, insurance requirements, and rising tenant expectations.
• Attractive Sector: Backlog underpinned by strong exposure to high-growth commercial, industrial, and data centre markets.
• Increasing recurring , maintenance and minor works revenue streams – highly recurring client base (~86% repeat clients) and an expanding maintenance and minor works segment (~30% of revenue).
• Provides a platform for consolidation of the highly fragmented sector.
• Annuity-style, subscription-based business models with strong margins (>20% EBITDA), generating recurring, predictable cash flow and clear visibility on future earnings.
• Strong regulatory tailwinds, with compliance requirements increasingly embedded in state and federal frameworks, reinforcing earnings defensibility.
Key Valuation Drivers
Trading Multiples
The current median EBITDA multiple of listed AU Technical Property Services companies is 12.1x, up 27% on the 3-year average of 9.5x.
Strong growth in the Australian market is underpinned by robust construction and renovation activity, coupled with resilient profitability amid rising costs.
Australian mid-caps have outperformed, with multiples up 150% to 16.0x vs a 15% drop to 11.2x for large peers, driven by stronger EBITDA growth (39% vs 23% CAGR) and higher growth expectations.
3- Year Trailing EBITDA Multiples
Median (EBIT): 18.3x Median (EBITDA): 12.1x
Transaction Multiples
M&A Overview: We have categorised relevant Australian transactions over the past decade into three groups based on transaction enterprise value: (1) Small Cap: EV below $100m; (2) Mid Cap: EV $100m – $500m; and (3) Large Cap: EV above $500m.
Valuation multiples for Small Cap companies are primarily driven by business size, with profitability having limited influence. In contrast, for Mid Cap and Large Cap companies, profitability becomes a key differentiator, as transactions involving businesses with higher EBITDA margins command higher valuation multiples.
Case Study: Force Fire
SCEE Group announced its $54m acquisition of Force Fire on 31 March. The share price rose 9.6% the following day, indicating strong investor support for the transaction’s strategic rationale. Since the announcement, SCEE’s enterprise value has increased by $189m (58%), underscoring market confidence in the company’s growth outlook.
Multiple: 7.5x EV/EBITDA (Pre-AASB 16)
Force Fire’s Multiples
Transaction Overview: SCEE’s offer implies an EV/EBITDA multiple of 7.5x, well above the median of 5.9x for Australian Small Cap transactions (median EV of ~$39m) over the past decade, reflecting Force Fire’s larger scale. The multiple remains below trading multiples of comparable listed peers, consistent with the typical size discount applied to smaller private transactions.
(Trading) : 7.5x
EV/EBITDA (Small Cap Transactions)
Note: Trading multiples as of
Peers Comparison
Disclaimer:
Sources: CapitalIQ, MergerMarket, ABS, ASX Filings and Pitcher Partners’ Analysis
Key Takeaways
• Active buyer interest: Strong private equity appetite and market fragmentation create attractive opportunities for owners to sell or partner at strong valuations.
• Attractive financial profile: Low capital needs, healthy margins, and strong cash flow make HVAC businesses appealing acquisition and platform targets.
• Key value drivers: Focus on maintenance and retrofits, exposure to resilient sectors (health, education, government, data centres), and a diversified mix of smaller, short-duration projects that reduce concentration and execution risk..
• Steady demand: Driven by maintaining and replacing ageing systems and the growing focus on energy-efficient, climateconscious solutions.
