Grove Mountain Partners Launches Team First Home Services Platform

Grove Mountain Partners, a Knoxville-based private equity firm specializing in lower middle-market investments, has officially launched Team First Home Services, a new platform targeting consolidation opportunities in the fragmented HVAC and plumbing services sector. The announcement, made January 20, 2025, represents a calculated entry into an industry that has attracted billions in private equity capital over the past five years as investors seek recession-resistant cash flows and favorable demographic tailwinds.

The firm has appointed Mike Bornhorst, a seasoned home services executive with deep roots in the Southeast market, as Chief Executive Officer. Bornhorst brings more than two decades of operational experience, most recently serving as Chief Operating Officer at Hiller Plumbing, Heating, Cooling & Electrical, where he oversaw operations across Tennessee and Kentucky. His track record of scaling regional service providers through organic growth and strategic acquisitions positions him as the architect of Grove Mountain's ambitious consolidation thesis.

Team First Home Services enters the market with immediate scale, having already secured partnerships with three established regional operators: A+ Heating & Air Conditioning and Raleigh Heating & Air in Tennessee, and Sunbelt Plumbing in North Carolina. These foundational assets provide geographic diversity across key Southeast metros and establish a multi-service platform capable of cross-selling HVAC, plumbing, and electrical services to residential customers.

The timing of the launch reflects broader private equity enthusiasm for essential home services. With household formations accelerating in Sun Belt markets and the installed base of aging HVAC systems requiring replacement, investors view the sector as offering predictable revenue streams insulated from e-commerce disruption. Grove Mountain's entry signals confidence that sufficient acquisition targets remain available despite intense competition from larger consolidators.

Bornhorst's appointment reflects Grove Mountain's emphasis on operational execution rather than purely financial engineering. During his tenure at Hiller, he developed systems for standardizing service delivery protocols while preserving local brand equity—a delicate balance that has proved challenging for many roll-up strategies. His approach centers on what he describes as a "people-first" philosophy, maintaining that technician retention and customer satisfaction metrics drive long-term enterprise value more effectively than aggressive cost synergies.

In announcing his new role, Bornhorst emphasized the platform's commitment to empowering technicians through training investments and career development pathways. The residential services industry faces chronic skilled labor shortages, with the Bureau of Labor Statistics projecting demand for HVAC technicians to grow 6% through 2032, faster than the average for all occupations. Platforms that successfully recruit and retain field personnel enjoy significant competitive advantages in a capacity-constrained market.

The leadership team will prioritize technology integration across acquired businesses, implementing unified CRM systems, dynamic scheduling tools, and customer relationship management platforms that enable data-driven decision-making. Many smaller HVAC and plumbing companies operate with outdated dispatch systems and paper-based workflows, creating immediate opportunities for operational improvement and margin expansion post-acquisition.

Bornhorst also brings relationships with equipment manufacturers and distributors that could yield preferential pricing as the platform scales. Volume purchasing agreements and vendor rebates represent meaningful margin enhancement opportunities in a business where equipment and parts comprise 30-40% of revenue. These backend benefits often distinguish successful consolidators from struggling competitors.

The initial geographic footprint—Tennessee and North Carolina—reflects careful market selection based on demographic trends, regulatory environments, and competitive fragmentation. Both states rank among the nation's fastest-growing by population, driven by corporate relocations, favorable tax policies, and relative housing affordability compared to coastal metros. Population growth directly correlates with demand for residential services, creating tailwinds for platform expansion.

Tennessee's regulatory environment for contractor licensing operates at the state level with relatively straightforward reciprocity provisions, facilitating multi-market expansion within state borders. North Carolina similarly maintains contractor licensing standards that permit efficient scalability while ensuring quality controls. These regulatory characteristics lower barriers to geographic expansion compared to states with county-by-county licensing requirements.

The Nashville and Charlotte metros specifically offer attractive unit economics. Both markets feature growing concentrations of upper-middle-income households—the demographic most likely to invest in premium HVAC systems, preventative maintenance agreements, and emergency service calls. The prevalence of newer housing stock with complex HVAC systems requiring specialized maintenance further enhances revenue opportunities.

Market fragmentation remains pronounced despite consolidation activity. Independent operators and small regional chains still command majority market share in most Southeast metros, presenting abundant acquisition targets. Unlike mature consolidation plays in sectors such as dental practices or veterinary clinics, the home services market continues offering runway for new platforms to achieve meaningful scale.

The Southeast's climate profile—characterized by hot, humid summers and moderate winters—creates year-round HVAC demand with pronounced seasonality favoring cooling services. Rising average temperatures attributed to climate change have extended cooling seasons and increased system runtime, accelerating equipment degradation and driving replacement cycles. This environmental backdrop supports durable demand growth independent of economic cycles.

A+ Heating & Air Conditioning operates in the Clarksville, Tennessee market, serving Montgomery County and surrounding areas north of Nashville. The company has built reputation on residential HVAC installation and repair services, with particular strength in Carrier and Trane equipment. Clarksville's proximity to Fort Campbell and growing bedroom-community status relative to Nashville provide steady customer acquisition channels.

Raleigh Heating & Air serves the greater Knoxville metropolitan area, offering comprehensive HVAC services including installation, maintenance, and emergency repair. The company's maintenance agreement base—a critical source of recurring revenue—provides predictable cash flows and creates natural upsell opportunities when equipment reaches end-of-life. Knoxville's market dynamics, including a mix of older housing stock requiring system replacements and new construction demanding installations, offer balanced growth vectors.

Sunbelt Plumbing brings geographic diversification into North Carolina while expanding the platform's service capabilities beyond pure HVAC. Based in the Charlotte region, Sunbelt offers residential and light commercial plumbing services including installations, repairs, and drain cleaning. The plumbing vertical provides counter-cyclical revenue characteristics compared to discretionary HVAC upgrades, as emergency plumbing calls occur regardless of economic conditions.

Together, these three businesses establish a foundation with estimated combined annual revenues in the $25-35 million range based on typical market metrics, though financial terms of the transactions were not disclosed. The geographic spread positions Team First to pursue infill acquisitions in each market while exploring adjacent metros including Memphis, Chattanooga, and the Research Triangle.

Each founding partner brings existing customer databases, trained technician workforces, and established vendor relationships that provide immediate operational infrastructure. Rather than building greenfield locations—a capital-intensive and time-consuming approach—Grove Mountain has secured platforms with proven service delivery capabilities and local brand recognition.

Industry analysts increasingly view maintenance agreement penetration as a key performance indicator distinguishing superior home services platforms. Annual or semi-annual maintenance contracts generate recurring revenue, reduce customer acquisition costs through retention, and create natural opportunities for system upgrades when technicians identify failing components during routine service calls. Team First will likely emphasize expanding maintenance membership programs across acquired businesses.

Leading HVAC consolidators report maintenance agreement penetration rates of 25-40% of active customer bases, representing significant upside potential for most acquired targets operating below these benchmarks. The shift from transactional service calls to subscription-based relationships also enhances enterprise valuations by demonstrating predictable revenue streams to potential buyers or lenders.

Grove Mountain Partners typically targets companies with $10-75 million in revenue, positioning the firm in the lower middle market where proprietary deal sourcing and operational value creation drive returns. The home services sector aligns with the firm's historical focus on essential services businesses with recurring revenue characteristics and opportunities for geographic expansion.

The investment thesis rests on several pillars: demographic tailwinds in Southeast markets, industry fragmentation creating acquisition runway, opportunities for operational improvement through technology and best practice implementation, and the essential nature of HVAC and plumbing services generating defensive cash flows. These factors combine to offer risk-adjusted returns attractive relative to more cyclical sectors facing digital disruption.

Grove Mountain likely structured the platform with a combination of equity capital and senior debt facilities, potentially including an acquisition line of credit to fund future tuck-in transactions. The firm's partnership approach—maintaining founder equity stakes and involving sellers in ongoing operations—aims to preserve entrepreneurial culture while providing liquidity events for business owners seeking partial exits.

The typical hold period for Grove Mountain investments ranges from five to seven years, suggesting an exit horizon in the 2029-2031 timeframe. Potential exit pathways include sale to a larger strategic acquirer in the home services consolidation space, secondary buyout by a larger private equity firm, or continuation with recapitalization. The platform's performance during the hold period—measured by revenue growth, EBITDA margin expansion, and geographic footprint—will determine exit valuations.

Team First Home Services enters an increasingly competitive acquisition environment. National consolidators including Authority Brands, Wrench Group, and Nexstar Network have collectively completed hundreds of HVAC and plumbing acquisitions over the past five years, driving purchase price multiples higher and making target identification more challenging. These well-capitalized competitors enjoy advantages including established corporate infrastructure and proven integration playbooks.

Regional platforms backed by private equity—similar to Team First's positioning—have proliferated across major metros. Many target sellers now receive multiple acquisition inquiries annually, creating auction dynamics that pressure returns. The most attractive targets—businesses with strong EBITDA margins, diversified revenue streams, and professional management teams—command premium valuations often exceeding 8-10x trailing twelve-month EBITDA.

Team First's competitive positioning emphasizes regional focus, maintaining local brand identities, and partnership-oriented acquisition structures that appeal to founders seeking cultural continuity. This approach contrasts with platforms pursuing aggressive corporate rebranding and rapid integration, potentially resonating with sellers prioritizing employee welfare and customer relationships alongside financial consideration.

The platform's Southeast concentration may actually provide strategic advantages. Deep local market knowledge, proximity for management oversight, and ability to leverage regional brand recognition create differentiation versus national operators managing dispersed portfolios. Dense geographic clustering also enables shared field supervisors, centralized inventory management, and efficient emergency service routing—operational benefits difficult to achieve with scattered locations.

The residential HVAC and plumbing services industry generates approximately $130 billion in annual revenue across the United States, with projected compound annual growth rates of 5-6% through 2030 according to industry research firms. Growth drivers include housing stock expansion, increasing system complexity requiring professional service, regulatory changes mandating higher-efficiency equipment, and demographic shifts favoring professional services over DIY repairs.

The transition to higher-efficiency HVAC systems—driven by Department of Energy standards and state-level regulations—creates replacement cycles as older equipment becomes obsolete. New refrigerant regulations phasing out R-410A in favor of lower global warming potential alternatives will require system replacements rather than simple repairs, providing tailwinds for installation revenue through the remainder of the decade.

Homeowner demographics also favor professional service providers. Millennials, now entering peak homeownership years, demonstrate lower propensity for DIY home maintenance compared to previous generations, preferring to outsource tasks to professionals. This behavioral shift expands addressable markets for service providers as households that might have previously attempted self-repairs now become potential customers.

The industry's defensive characteristics became evident during the COVID-19 pandemic, when residential HVAC services proved remarkably resilient. With households spending more time at home and prioritizing indoor comfort, demand for system repairs and upgrades accelerated even amid broader economic uncertainty. This recession-resistant quality appeals to private equity investors seeking portfolio diversification away from cyclical sectors.

Smart home integration represents an emerging growth vector. Connected thermostats, remote monitoring systems, and predictive maintenance technologies create opportunities for service providers to offer premium monitoring services and capture data on system performance. Forward-thinking platforms are developing digital service offerings that generate recurring revenue beyond traditional maintenance agreements.

Team First's immediate focus will center on integrating the three founding companies onto common operating platforms while preserving their distinct market identities. This includes implementing unified financial reporting systems, standardizing service pricing methodologies, and establishing corporate functions including human resources, marketing, and strategic planning. The goal is creating scalable infrastructure capable of absorbing future acquisitions without degrading service quality.

Marketing integration represents a significant opportunity. Many smaller HVAC and plumbing companies rely heavily on word-of-mouth referrals and traditional advertising channels, underinvesting in digital marketing and search engine optimization. Team First will likely implement sophisticated digital marketing strategies including pay-per-click advertising, local SEO, and social media engagement to reduce customer acquisition costs and build brand awareness.

The platform will need to establish corporate headquarters functions, likely in the Knoxville area given Grove Mountain's location and Bornhorst's existing relationships in Tennessee. Recruiting experienced executives for finance, operations, and development roles will prove critical as the platform pursues additional acquisitions. Building this corporate infrastructure before aggressive acquisition activity helps ensure smooth integrations and maintains service quality standards.

Developing a robust acquisition pipeline represents another near-term priority. Grove Mountain and Bornhorst will leverage industry relationships to identify proprietary deal opportunities before businesses formally enter sales processes. The most successful consolidators secure significant portions of acquisitions through proprietary channels, avoiding competitive auctions and securing favorable pricing. Building these sourcing capabilities early establishes foundation for sustained deal flow.