SIMSBURY, CONNECTICUT (September 17, 2026) – Notch Capital, a private investment firm specializing in buyouts and recapitalizations of lower middle market businesses, today announced its acquisition of Solar Secured Solutions, LLC, which operates under the Ecogreen™ brand as Ecogreen Tank Monitors.
Founded in 2004 and headquartered in Dover, PA, Ecogreen Tank Monitors supports a variety of commercial businesses and offers extensive capabilities to assist operators requiring high-frequency tank level tracking for their business processes. Known for its superior service and support to customers across 35 states, Ecogreen Tank Monitors track a wide range of liquids including diesel, gasoline, ethanol, DEF, oil lubricants, biodiesel, water, waste oil, heating oil, kerosene, Avgas, Jet-A, fertilizers and liquid propane. Ecogreen’s durable, GPS-enabled monitors support above-ground and underground tanks, including both stationary and temporary installations, and deliver best-in-class reporting at industry-leading frequency.
Ecogreen’s web portal allows customers to view individual tanks or entire fleets, sort and filter data, track tank levels on a color-coded satellite map, set custom text and email alerts, access predictive analytics, generate detailed reports and manage multiple user logins with tailored access.
The company has been forward-thinking in developing its Hardware-as-a-Service (HaaS) business. This subscription-based HaaS model reduces upfront cost barriers and empowers commercial and industrial customers to install the latest monitoring technology quickly to improve their operating efficiencies.
Ecogreen has built its reputation on U.S.-based customer support. Its Pennsylvania-based team has excelled at responsive technical support and next-day hardware shipping. While President Keith Rodgers plans to retire, he will be assisting with the transition, and the existing Ecogreen customer support staff will remain in place. The company plans to expand its workforce and broaden its offerings with additional reporting and regulatory-compliance services.
“Ecogreen Tank Monitor has established itself as a leader in both monitoring and the HaaS model in the commercial fuels space,” said Jeff Simpson, Founder and Managing Member of Notch Capital. “They’ve incorporated innovative technology, eco-friendly design and a stellar team to bring exceptional products and services to market. We are looking forward to continuing to foster this wonderful team while expanding industry access to Ecogreen services.”
Retiring President Keith Rodgers said, “From day one, our success has been rooted in putting customers first, backed by a support team that goes above and beyond and a constant drive to innovate. I’m proud of what we’ve built, and I know that foundation will carry Ecogreen forward under Jeff and the Notch Capital team.”
Following the transaction, the acquiring entity, Ecogreen Precision Monitoring, LLC, will continue operating under the Ecogreen brand name. Jeff Simpson will serve as Managing Member of Ecogreen. This acquisition adds to Notch Capital’s broader portfolio of investment, advisory and M&A work supporting businesses across the delivered fuels and home services industries.
Ecogreen Precision Monitoring, LLC was represented in the transaction by Lippes Mathias, LLP as legal counsel and Citrin Cooperman Advisors, LLC as financial and tax advisor.
Solar Secured Solutions (“Solar Secured”) is a Pennsylvania-based commercial remote tank monitoring services company established in 2004. Marketing under the Ecogreen™ brand, the company provides subscription-based monitoring and accompanying logistical support to commercial customers requiring high-frequency reporting, real-time GPS tank positioning, and responsive customer care. For more information, visit EcogreenTankMonitor.com.
Notch Capital is a private investment firm specializing in buyouts and recapitalizations of lower middle market businesses in the delivered fuel and home services industries. Notch Capital also provides advisory services to help these businesses strengthen their performance and analyze acquisitions.
Originally published as a featured column in the September/October 2026 Issue of Indoor Comfort Marketing.
Three dissenting votes. That was all it took to mark the largest disagreement on interest rate policy in ten years during the most recent Federal Open Market Committee (FOMC) meeting. The 9-3 vote held the federal funds rate steady, but the message was clear: a growing number of officials want to hike rates to tackle persistent inflation. For business owners, that means cloudier guidance about the cost of borrowing and little relief on the price of goods and services heading into the winter. Whichever way the Federal Reserve moves at its mid-September meeting, the cost of doing business isn’t easing anytime soon.
Rising capital investment, easing bank lending standards, and modest household consumption growth in the first half of 2026 could again support holding rates steady. But more than five straight years of inflation exceeding the Fed’s 2% target, combined with this year’s oil price shock from the Iran conflict, have everyone’s attention. Several fuel and HVAC industry-specific indicators remain elevated too.
Let’s start with payroll. On a macro level, reduced immigration and slow population growth have tightened the labor pool. Closer to home, the TechForce Foundation recently found that new graduates are meeting just 42% of demand for technician job openings. HVAC, automotive and diesel technician graduates are filling just 63%, 70% and 48% of open roles, respectively. The technician shortage isn’t new to those of us in the industry, but the dearth of skilled technicians continues to push both direct labor and service provider costs upwards.
Vehicle costs tell a similar story. Demand for commercial vehicles, especially cargo vans and pickups, is climbing. High raw material costs and ongoing tariffs continue to inflate fleet expenses. Work Truck Solutions, a leading commercial vehicle authority, reports that while new commercial vehicles have held steady this year, used commercial vehicle prices are up 8.8%. The median mileage on fleet vehicles has jumped 24.5%, meaning businesses are holding vehicles longer and running headlong into higher maintenance costs, often from service firms that are themselves paying more to retain their technicians. Throw in significantly higher fuel expense, the impact of AI demand on the cost of tech-embedded HVAC equipment, and the new refrigerant compliance and it is becoming increasingly clear this won’t be a typical winter.
In the face of rising operating costs – not to mention higher commodity prices that fortunately held off until late last winter – owners are in a tenuous situation. To borrow the time-worn phrase: Hope is not a strategy. It’s understandable why financial planning often takes a back seat for small businesses when owner-operators are laser-focused on running the business. But it can leave you vulnerable. Taking the time to build a comprehensive budget before the next heating season or the new fiscal year will give you a clear-eyed view of the true cost of what wage increases, maintenance costs or higher line of credit balances mean for your margins. It’s the necessary groundwork that will allow you to set fuel and service margins in order to protect your profitability. Prices across most aspects of your business are increasing faster than usual, and I guarantee that your suppliers – and your bank – are expecting you to manage the adjustments. They certainly won’t be absorbing those costs for you. Fortunately, there are a host of advisory and accounting firms that can help you with this process if you don’t have the internal resources to undertake it.
Back to the Fed decision and interest rates for a moment. While bank lending and the broader availability of private capital remain accessible to well-run companies, rates show little sign of falling anytime soon. If you’ve been sitting on plans to refinance, recapitalize or simply convert floating-rate debt to fixed, now is a reasonable time to act. Capital is available and borrowing costs, while elevated, remain manageable to support growth, provided you come to the table with a well-structured ask. One thing you can consider doing is to ask your financial advisor or accountant to stress-test debt service coverage ratios against further rate increases, not just flat rates. This is especially important if you have narrowly cleared loan covenants or if you experienced a slower or cooler response from your banker lately.
Continued Middle East tensions and elevated commodity costs will strain many fuel dealers this winter, but the steady upward march of direct and indirect costs across nearly every part of your operation calls for more deliberate planning than you may have traditionally devoted to it. Take the time now to examine costs and set healthy margin targets that control your destiny and protect your business. That planning is worth far more than it costs.
Extend the same control to your customers. Remind them that they have the ability to enter a budget payment program, a price cap, or tiered service plans that let them choose the level of predictability that fits their finances. In a high-price environment, securing flexibility for your company and providing flexibility to your customers is good business. None of us can control the Fed, the weather, or the price of oil. But a clear budget, a solid financing plan, and options for your customers will go a long way to smoothing out a potentially bumpy ride.
Jeff Simpson is the founder and managing member of Notch Capital, a private investment firm specializing in buyouts and recapitalizations of lower middle market businesses in the heating, cooling and home services industries. Notch Capital also provides advisory services to help these businesses strengthen their performance and analyze acquisitions.
Originally published as a featured column in the July/August 2026 Issue of Indoor Comfort Marketing.
For an industry rich with multi-generational family businesses, passing the keys to the next generation remains one of the most common – and most complicated – transitions an owner will ever navigate. Over my decades of serving the fuels and HVAC industry in both operational and financial roles, I’ve had the privilege of working with many great family-run businesses. Even best-in-class companies find this transfer tricky because there are so many potential variables.
Owners must identify how best to “season” the next-generation leader by providing the right levels of exposure across operations, finance, and strategic thinking. The incoming leader must be competent – or have the potential to grow into the role – to achieve success. And perhaps most importantly, they must carry the right attitude. After all, a college degree or years of on-the-job experience do not guarantee that a child is truly ready to shoulder the long hours, the periods of profound stress, and the complex interpersonal demands of running a business. And these are the complicating factors in the most straight-forward situation. Many businesses are forced to deal with other transition challenges; children who pursue another career before returning to the family fold, successors thrust into leadership earlier than anticipated by a parent’s illness or death, or businesses carrying financial strain that makes the timing of any transition less than ideal. There is rarely a clean hand-off.
The credibility of the next-gen leader is earned through a sense of shared sacrifice and experience in the trenches. Young leaders who have dealt with the operational challenges of both brutally cold winters and painfully warm ones, suffered through commodity price shocks, and maneuvered through a tough banking environment earn the kind of trust that titles cannot confer. It’s the kind of credibility that can only be built up over decades, not years. And it’s often the baseline qualification a new leader needs to convince an experienced team to execute on ambitious new initiatives after a longtime leader steps away.
But there is an opportunity here that next-gen leaders too often miss. Showing up and working hard speaks volumes, but demonstrating from the outset that they bring something new and transformation to the table is critical. The greatest impact will be made when next-gen leaders exhibit they are fully invested in the business and not simply along for the ride as the recipient of an inevitable, passed baton. They are positioned to successfully combine real-world experience and command of the latest tools. This is powerful stuff.
And it can be made that much more powerful when combined with a strong understanding of the financial and capital tools that can springboard a business into the future. Employees at every level want to know their employer is taking steps to advance their company. One of the fastest ways for the next generation of leadership to demonstrate this is by embracing a strategic vision supported by financial and capital literacy.
The availability of capital targeting the lower middle market has never been stronger. Traditional bank financing and SBA loans are now supplemented by private debt and a range of control and non-control equity providers. Many capital providers are far more interested in long-term growth and dividend returns than a quick transaction. These make natural partners for mid-career leaders stepping into strategic roles and looking to make an immediate impact.
With the influx of a variety of capital providers targeting the lower middle market, a host of forward-thinking avenues now exist to help new business leaders make a splash with resources they wouldn’t otherwise have. Next gen owners can access debt and equity to strengthen a business, assemble a more robust management team, jumpstart growth or capture a transformational acquisition. One powerful way to survive in a rapidly consolidating industry – especially one with increasingly more sophisticated, capital-backed competitors – is to exhibit some mastery of the latest financial techniques used by others. Properly structured, this is an inflection point that allows the new leader to build their own track record in short order.
For outgoing leaders, the expansion of capital availability is a compelling reason to involve their children in accounting, banking and acquisition discussions early. Financial literacy is rarely taught in school and almost never fully grasped until it’s encountered in the field. The owners who start these conversations early give their successors a head start that pays dividends long before the formal handoff occurs. It is also worth noting that not all capital providers are created equal. Banks and other capital providers that have demonstrated a genuine appetite for this industry and stayed the course through economic shocks and rough patches are worth knowing and cultivating. Those relationships can take years to build.
The next generation of fuel and HVAC leaders will operate in a more competitive, more consolidated, and more financially sophisticated environment than their predecessors. The companies that thrive won’t be the ones that simply passed the company on to the next generation, but instead the ones that used it as a launching pad to greater things. If you are a next generation leader preparing to take the reins, press to be included in every financial conversation your business has, including banking reviews, acquisition evaluations and capital planning. If you are an owner eyeing an exit or a transition, open those doors to the next generation years before you are ready to leave.
The window to build operational credibility takes time that cannot be compressed. But the window to demonstrate to your team, vendors, bank and capital partners that you understand the financial tools available and intend to use them opens the moment choose to embrace it.
Jeff Simpson is the founder and managing member of Notch Capital, a private investment firm specializing in buyouts and recapitalizations of lower middle market businesses in the heating, cooling and home services industries. Notch Capital also provides advisory services to help these businesses strengthen their performance and analyze acquisitions.
Originally published in the May 2026 issue of Fuel Oil News
This summer is shaping up to be one of the most opportunity-rich in recent memory for fuel dealers. Many owners are poised to take advantage of a powerful combination of strong financial results from back-to-back robust heating seasons and continued consolidation in the industry. As leaders plan for growth, the key question becomes: how best to fund it?
After decades working with business leaders in the delivered fuels space, I have heard too many stories of stalled growth plans when financial support could not be secured. Even strong companies with consistent earnings can find themselves shut out by the limitations of traditional bank financing. Tried and true financial metrics such as debt leverage and minimum required debt service coverage ratios can be funding killers, locking businesses out of transformative business opportunities. Fortunately, the capital environment for lower middle market businesses continues to evolve, bringing new avenues for business leaders to secure the necessary funding to pull off that acquisition, expansion or generational transfer.
Two Paths to Capital
Owners with long-term banking relationships may be familiar with refinancing, which involves the replacement of existing debt with new debt on better terms. Refinancing is often used to gain a more favorable amortization schedule, obtain a lower interest rate or layer in new debt that doesn’t stress the business. Businesses of most sizes will find themselves eligible for refinancing if they are generating consistent earnings and if their existing banking structuring is inadequate to support growth. However, there are limitations given how inflexible the regulated bank lending guidelines are.
By contrast, a recapitalization, or “recap,” is considered a more strategic step. It introduces both new equity and debt with the specific goal of achieving a growth objective or ownership shift. Recaps introduce capital partners who take a minority or majority stake in exchange for cash into the business. They are frequently associated with large acquisitions, meaningful expansion of a business line, improving leverage, or buying out an existing partner or family member. Recapitalizations can be an excellent solution for mid-career business owners who are looking to make a bold move without going it alone. Similarly, owners who are several years away from retirement can use a recap to begin to transition out, take cash off the table, and remain in a leadership role until the time is right to step away.
What’s Available to You?
Knowing which pathway to pursue – and which may be available to you based on your business profile, earnings level and performance history – is important to understand at any point in time. It is most important to understand well before a significant need for capital arises. As a rule of thumb, businesses generating less than $2 million of annual Earnings before Interest, Taxes, Depreciation and Amortization (EBITDA) are most likely limited to refinancing as their growth option, while businesses over $2 million of EBITDA may pursue either path. Larger fuel distribution and HVAC businesses are far more likely to successfully attract equity via recapitalization.
Private capital providers active in this space, including industry-specialized firms, Small Business Investment Companies (SBICs), and family offices tend to be patient investors who rely on the existing management team to continue running the business post-transaction. For the largest companies, traditional private equity may be an effective fit. These capital providers are actively seeking companies like yours: mature industries marked by stable recurring income, non-cyclical service demand and assets ripe for efficiency upgrades so that the business can scale quickly. Diversified fuel distribution, HVAC and other home services businesses check every one of these boxes.
What to Expect from a Capital Partner
If you are considering pursuing a recapitalization, keep in mind that your capital partner will expect clean, timely reporting following the transaction. Beyond that, different capital partners have different oversight expectations when it comes to safeguarding their investment. While some firms want board representation, others prefer an observational role and will want to weigh in on major decisions such as an acquisition or adding significant new debt. The size of their investment is often a key factor in these requests. It is important to shop around and speak with multiple potential partners before committing to ensure that their operating style is a fit for how you run your business.
Fuel Your Next Move
It wasn’t that long ago that the only options for many delivered fuels businesses were to sell to a competitor or to hand the keys to the next generation when the time came for a transition. Fortunately, the expanding array of private capital solutions and the competition among traditional banks for new lending relationships now permeates the lower middle market and has increased optionality for business leaders in our industry. There are more tools than ever to execute a bold acquisition, bring in a partner to accelerate growth or structure an ownership transition.
The capital is out there for those willing to go get it. This is a meaningful advantage for owners willing to take action. So, what will you do to fund your growth this year?
Jeff Simpson is the founder and managing member of Notch Capital, a private investment firm specializing in buyouts and recapitalizations of lower middle market businesses in the heating, cooling and home services industries. Notch Capital also provides advisory services to help these businesses strengthen their performance and analyze acquisitions. Jeff can be reached at jsimpson@notchcap.com.
Originally published as a featured column in the May/June 2026 Issue of Indoor Comfort Marketing.
As the dust settles following a challenging winter for fuel service providers in many parts of the country, the industry once again moves into the so-called offseason. Time will tell if a broader industry financial boon emerges from this stretch of uncharacteristically high demand for fuel and equipment service work. Strong-performing companies will choose between finally cashing out or leveraging their financial positions to drive continued growth – be it organically or through acquisition. Regardless of which path you choose, the best in class companies will treat this summer less like an opportunity to take it easy for a few months and more like a chance to push aggressively toward your desired outcome.
If you’re a business owner ready to pursue an acquisition, get ready to enter the “Thunderdome”. Today’s competitive landscape for quality businesses is as strong as it has been in years. Financial buyers are increasingly targeting the lower middle market, multi-state strategic acquirers are more active and the stable, recurring cash flow profile common in the fuel and home service businesses continues to attract interest. The result is an environment where buyers must be aggressive, disciplined and financially prepared to win.
Buyer success in 2026 will not be an accident. If growth through acquisition is on your to-do list, a robust financial plan can help you position your company as a credible and attractive partner to both sellers and capital partners. While experienced operators often excel at evaluating geographic fit, customer relationships, service offerings and personnel, the financial evaluation of a deal can present new challenges. To this end, here are several recommendations for would-be buyers to help guide you as you analyze potential opportunities.
Understand the Current Valuation Environment
One of the most common frustrations for buyers is failing to move past the initial bid because their offer does not attract seller interest. In many cases, the issue is not intent but misalignment with market valuation or deal structure.
Recognize that valuations and deal structures (i.e., the mix of cash, seller notes, equity rolls and earnouts) are not static – they are influenced by competition, cost of capital and the types of buyers pursuing the opportunity. Engaging an industry-focused financial advisor or accountant early in the process can help buyers better understand current market expectations and avoid submitting an offer that never reaches serious discussion. Presenting a credible and market-aligned offer is essential to getting a seat at the table.
Financial Reporting Must Inspire Confidence
Most acquisitions require lender or investor support, making strong financial reporting essential. Buyers should be prepared to present timely financial statements, clean tax returns and current interim reporting to demonstrate operational and financial discipline. The quality of reporting can either lead to a smooth approval process or raise unwanted – and unnecessary – red flags that slow down the process. If the buyer’s financials are delayed, capital partners are likely to infer future reporting will be delayed as well.
Carefully Evaluate Seller Add-Backs
It is common in an acquisition transaction to present future projected cash flows which give credit for non-recurring or discretionary expenses such as owner compensation, benefits, rent or one-time charges. While these adjustments are common, buyers must carefully validate them before presenting projections to capital partners. Large or unusual add-backs that materially drive valuation can raise skepticism with banks and other capital providers. Similarly, if the departing owner performed critical operational functions or expenses were deferred in recent years, earnings should be adjusted to reflect the true ongoing cost structure.
Be Realistic About Capital Expenditures
The Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) alone rarely tells the full story in fuel and home service businesses and should not be taken at face value. Many businesses require significant continuing outlays of cash to sustain the business (“maintenance capex”) and support continued growth of the business (“growth capex”). Ongoing payments for vehicles, equipment, tanks and technology can significantly impact available cash flow. Determine your true free cash flow after this impact to prevent against overestimating the company’s ability to service debt.
Plan for Increased Working Capital Needs
Working capital demands often increase after an acquisition. Businesses that extend payment terms to customers or outlay large amounts of cash over a short, seasonal period typically rely on bank lines of credit to maintain liquidity. Acquiring a company with a similar profile will increase this impact and should be fully understood when approaching financing partners. Advisors can assist you in forecasting the impact on working capital needs for the combined operation. Differences in customer payment patterns, service contracts and other recurring fee sources should be examined to avoid unexpected liquidity pressure.
If Seeking an Equity Partner, Present a Clear Plan
Companies with EBITDA over $3 million may be able to attract an equity partner to support acquisitions. In these situations, a clear and actionable growth strategy is critical. Equity partners want to see a roadmap for value creation, including potential add-on acquisitions, geographic expansion opportunities, cross-selling initiatives and operational efficiencies. A detailed budget, supported by realistic assumptions and clearly identified financial upside will be required in this situation to attract investment.
As acquisition opportunities are expected to emerge this year, the most successful buyers will be those who combine their operational expertise with financial discipline during the process. Preparedness will make the difference between gaining traction with both the seller and the financing partner or watching an opportunity go to a better-prepared buyer.
Jeff Simpson is the founder and managing member of Notch Capital, a private investment firm specializing in buyouts and recapitalizations of lower middle market businesses in the heating, cooling and home services industries. Notch Capital also provides advisory services to help these businesses strengthen their performance and analyze acquisitions.
By Jeffrey Simpson
Originally published as a featured column in the March/April 2026 Issue of Indoor Comfort Marketing.
More Buyers, Better Options: Rethinking the HVAC & Fuels Exit
After a memorably frigid winter drove record earnings across much of the country, a familiar question is resurfacing for fuels and HVAC business owners: Is now the time to sell? Some owners will decide to cash out at the top of the cycle. Others will use their newly filled coffers to recommit to the business despite industry regulatory pressure, labor challenges and higher costs. Regardless of your mindset, what is clear is that today’s buyer landscape looks quite different than it did a decade ago.
Traditional buyers such as cross-town rivals, large strategic acquirers and private equity firms are now joined by independent sponsors, family offices and other high-net-worth individuals who are targeting lower middle market businesses. In addition to complicating the acquisition landscape, an expanded pool of buyers also brings a wider range of transaction structures and outcomes that are often not yet appreciated by owners in the fuels and HVAC space.
Private Capital Explosion
The massive increase of private capital over the past decade as traditional lending standards have tightened has pushed financial buyers deeper into fragmented industries like distributed fuels and HVAC. Not only has this accelerated the deal-making in many segments of our industry, it is now driving an expanded menu of exit options for business owners – not just at the end of their career, but at all stages. While a meaningful segment of founders and owners will seek to maximize the headline price of their business as they approach retirement, others will prioritize the protection of the legacy in the community and fair treatment of their employees – assuming, of course, the valuation feels fair. Increasingly, however, a third category of sellers is emerging: owners who want liquidity and upside.
Tax planning, participation in future growth, access to capital and access to operational resources are now central to many exit conversations. Recognizing that industry fragmentation, widening buyer demand, and their own hard-earned business relationships can be leveraged to accelerate growth before a full exit, savvy owners are often beginning these strategic financial discussions years before retirement.
Rollover Equity: Owning A Meaningful Piece of a Bigger Pie
Unlike buyers focused primarily on post-transaction cost cutting or headcount reduction, many financial buyers place a premium on continuity. They value the owner’s relationships, market knowledge and leadership and seek to keep this expertise in place after closing. To entice this continued relationship, buyers frequently give the seller the option to reinvest, or “roll,” a portion of their sale proceeds into equity of the buyer’s newly formed holding company. While rollover equity has historically been less common in fuels and HVAC than in other sectors, that is changing quickly. M&A data firm GF Data reports that 63.6% of middle market deals (broadly) in 2024 included rollover equity. Many transaction advisors we speak to anecdotally place the frequency closer to 50% across the lower middle market segment.
For sellers, rollover equity presents a second opportunity for wealth creation. By retaining an ownership stake, sellers participate in the future growth of a business that now benefits from greater capital, expanded management resources, and an acquisition-driven growth strategy. Just as importantly, sellers can often defer taxes on the rolled portion of the sale proceeds. In some cases, the equity may qualify as Qualified Small Business Stock (QSBS) under Section 1202 of the tax code, potentially allowing significant future capital gains to be realized tax-free if requirements are met.
Buyers benefit as well. Rollover equity aligns the seller’s interest with the buyer’s desire for improved long-term performance. Further, it can help bridge valuation gaps and may reduce the amount of necessary outside capital required to close the transaction. It is also common for the seller to continue earning a salary or other performance-based compensation as a result of their continued involvement with the business, making this structure particularly attractive to owners who are mid-career or not ready to fully step away.
The amount of continuing equity in the acquired business differs from deal to deal but rollover stakes typically fall in the range of 20% to 40%, depending on the deal dynamics and the parties’ objectives.
A Matter of Preference and Timing
Taking the last dollar at closing will always make sense for some sellers, especially those ready to fully embrace retirement. For owners with years or decades left in their careers, however, minority ownership can unlock many of the same benefits historically enjoyed only by large acquirers such as scale, follow-on capital access and shared risk. Through rollover equity, Sellers can potentially reap additional proceeds that meet or exceed their original transaction payday.
Understanding a buyer’s investment horizon is critical. Independent sponsors and family offices often take a longer, more flexible view, while private equity buyers may operate under a shorter defined timeline to grow and exit the business. Aligning with a buyer that understands the unique dynamics of fuels and HVAC while also matching your desired career timeline can mean the difference between a productive partnership and a frustrating one.
As always, owners should work closely with legal and tax advisors to understand rollover mechanics, Qualified Small Business Stock eligibility, minority protections and governance rights.
A business sale no longer requires an “all or nothing” decision. For owners who still see career and opportunity runway ahead, today’s buyer landscape offers a chance to take meaningful dollars off the table while staying invested in what comes next. Exploring these options early before your retirement is upon you is the single best way to turn a strong exit into a lasting benefit for you and your family.
Jeff Simpson is the founder and managing member of Notch Capital, a private investment firm specializing in buyouts and recapitalizations of lower middle market businesses in the heating, cooling and home services industries. Notch Capital also provides advisory services to help these businesses strengthen their performance and analyze acquisitions.
By Jeffrey Simpson
Originally published as a featured column in the January/February 2026 Issue of Indoor Comfort Marketing.
The pace of mergers and acquisitions in our industry has continued at a consistent clip, but most companies haven’t felt it. Because when we look deeper, we see that strong acquisition activity has been clustered around companies of a certain premium size or companies that are exhibiting predictable earnings and healthy free cash flow. It would be wonderful if all your businesses fit into those categories, but most of the companies in our industry don’t. A large portion of the lower middle market companies where so many of our industry resides, has been facing softer valuations, limited capital availability and slow, cumbersome bank approval processes. But as the Bob Dylan song title goes, the times they are a-changin’. And these changes may just spawn a revival of sorts in the lower middle market that will lead to increased dealmaking in the new year.
A Look Back at the Last Few Years
In recent years, new private capital sources – which included non-bank lenders and smaller-focus equity providers –stepped in to fill a void left by more conservative traditional banks. In fact, the support in the private credit market, including the leveraged lending arena for acquisition financing, roughly quadrupled over the past decade and according to PitchBook now accounts for $1.1 trillion in U.S. credit assets. Strategic and financial buyers continued to transact with these alternate sources of support, though at a muted pace in 2025. Competition was intense for top-quality companies, especially those with scaled propane operations or pure-play HVAC platforms. In contrast, many smaller buyers and sellers were sidelined by tighter credit and downward pressure on valuations. Those who undertook an acquisition have been forced to rely on creative deal structures or endure a lengthy traditional bank credit process to coax their deals over the finish line.
Signs of Life in the New Year
Published data and market activity shows that merger and acquisition activity within the fuel distribution and HVAC space – and in the lower middle market as a whole – has been building since the third quarter of last year. We are also observing that capital providers are showing modestly higher tolerance for leverage in acquisitions and recapitalizations as reflected in an increase in acceptable debt to EBITDA ratios. Will this materially benefit the broad base of small and mid-sized fuel and HVAC business owners seeking to keep pace in a rapidly consolidating marketplace? It’s an open question that will play out in the coming months, but we believe the answer is “yes”.
A Regulatory Tone Shift
One side effect of the tighter credit standards employed by traditional banks following the 2008 financial crisis and the resulting migration to alternative financing was that a large volume of transactions were pushed into the private credit realm and outside of direct bank regulatory oversight. In response, the Federal Deposit Insurance Corporation and the Office of the Comptroller of the Currency issued an interagency statement in December that softened guidance on leveraged lending used to support acquisitions. This regulatory shift by the new administration may seem small, but could
be significant, as it is intended to expand access to senior debt to foster business growth across all sectors. While the largest acquirers are likely to benefit first, the change in tone across banking combined with the potential for lower interest rates may prove to be just the boost needed to unlock activity for a wider swath of middle market buyers and sellers.
The Tools Change but the Goal Remains
The easing of traditional bank lending standards will be a welcome development for many small business executives, but the impact is likely to be incremental over the course of the year. Many fuel and HVAC companies have experienced uneven performance over the last few years due to challenges ranging from rapidly rising operating expenses to persistent staffing difficulties to warm weather (although as of this writing, we’re all enjoying a wonderfully cold start to the heating season!). For these companies, the path forward should include a focus on creative deal structuring and aggressively establishing higher profitability in order to enter expanded markets and business lines. Establishing a dialogue and building relationships with a diverse range of capital sources that can potentially help your business act quickly and confidently on a transaction in today’s environment is arguably much more important than simply searching for the lowest headline cost of capital.
The massive impact of new private capital sources that have sprung into existence over the past decade is now a permanent feature of the capital landscape. We continue to advocate that finance leaders in the home heating and cooling industry recognize that a growing pool of large – and not-so large – companies are using private credit solutions as part of their capital mix. As deep-pocketed strategics and private equity firms ramp up activity as the landscape improves in the lower middle market, it is important that business leaders in this fragmented industry make clear choices about growth versus exit. A thawing credit environment can support either path, but it is critical to position your company for your desired outcome with an understanding of how the shifting landscape of credit sources can best achieve this goal. The winners will be those that strengthen profitability, professionalize their capital relationships and proactively position themselves to capitalize on opportunity. The companies that will miss out are those that decide to wait until they think the conditions are “perfect.” And as most of us in this industry already know, there is no such time as “the perfect time.”
Jeff Simpson is the founder and managing member of Notch Capital, a private investment firm specializing in buyouts and recapitalizations of lower middle market businesses in the heating, cooling and home services industries. Notch Capital also provides advisory services to help these businesses strengthen their performance and analyze acquisitions.
By Jeffrey Simpson
Originally published in the January 2026 issue of Fuel Oil News Magazine.
As we begin 2026, the lending landscape remains challenging for many small and mid-sized businesses in the delivered fuels and HVAC sectors. Interest rates have declined modestly but remain elevated by historical standards. This has kept capital costs high and deal activity muted which has hindered growth opportunities. Traditional lenders continue to move cautiously, stretching diligence timelines even for strong, well-prepared acquisitions. Overall deal volume continues to gain steam for best-in-class companies, but activity across the broader market remains uneven. However, there are signs of improvement for small and mid-sized businesses in the year to come. And the announced December Federal Reserve easing of interest rates may be the spark to accelerate deal activity in the lower middle market.
Here’s a quick spin around the market and my observations for you to consider as we enter the new year:
Flexibility Is Attractive – and Often Necessary
Private credit (non-bank) lenders have remained an enduring and influential force throughout this cycle, filling the acquisition financing gaps left by traditional banks. A growing segment of fuel and HVAC companies are taking advantage of the flexible structures that private capital providers offer. As business owners, exploring these non-bank options has become increasingly essential as they offer more flexible capital structures and amortization schedules.
Recapitalization and Growth Considerations
Forward-thinking business owners continue to explore refinancing and recapitalization options to fund growth and manage balance sheet leverage. The market for restructuring remains healthy, particularly for larger and well-managed companies with strong fundamentals. However, many owners in the lower middle market continue to encounter some headwinds, both in achieving desirable valuations and in securing capital at favorable terms. Looking ahead, it’s crucial to manage free cash flow carefully. Tariffs on steel, tanks and vehicles continue to pressure margins, and both traditional and private lenders are watching closely to see how businesses adapt. Now is the time to revisit margin targets in both fuels and equipment service activity to ensure adequate cash reserves are being built.
The Outlook for Potential Sellers
If you’re considering stepping back from your business, today’s market offers meaningful opportunities. Capital is available, and buyers remain interested, especially if your company has demonstrated consistent performance and strong recurring revenue. Conversely, owners who have experienced uneven results in recent years may face lower buyer interest and more complex deal structures.
A blended capital structure using traditional bank financing and private capital can still support an attractive transaction value. The key is understanding where your business stands in the current environment and structuring a sale that aligns with both your goals and buyers’ expectations. While select high-growth suburban regions have seen competitive bidding for heating oil assets in recent months, sellers in many parts of the country can expect a seller note component to help support their desired transaction price. Smaller fuel distributors with limited or no service offerings and weaker customer stickiness are finding their buyer universe narrow.
What Buyers are Looking For
Owners contemplating a sale in the next few years can attract a greater pool of buyers by expanding their predictable revenue streams and ensuring margins on fuel and service sales are consistent, sustainable and among the best in class. Service contracts, delivery fees (where permitted), monitoring fees and a majority percentage of automatic deliveries will catch the attention of buyers.
Purchase prices remain fair but disciplined for heating oil and HVAC assets due to the pressure of the lingering high cost of capital on free cash flow.
Companies generating more than $2 million of EBITDA are once again attracting a wider pool of potential buyers, as strategics, cross-town rivals and, in the case of sellers with a wider product offering, financial buyers such as private equity and other private capital buyers have expanded their search for platforms and tuck-in acquisitions. These larger sellers can expect the strongest multiples in the current market. By contrast, companies with EBITDA under $1 million that are unwilling to consider seller notes or earnouts may find 2026 a difficult year to transact.
Summary
While conditions are not optimal in the capital markets as of the time of this writing, you can take comfort in the fact that the trajectory is favorable and
that deals continue to close in spite of less-than-ideal conditions. Sellers must recognize that tight credit conditions and rigorous underwriting are continuing features of the market for most players. As you explore options, it’s best to hold conversations with both traditional lenders and private capital providers and plan to explore multiple deal structures. And, above all, remember that the single greatest motivator to capital providers and buyers is a demonstrated trend of repeatable earnings.
Jeff Simpson is the founder and managing member of Notch Capital, a private investment firm specializing in buyouts and recapitalizations of lower middle market businesses in the heating, cooling and home services industries. Notch Capital also provides advisory services to help these businesses strengthen their performance and analyze acquisitions.
By Jeffrey Simpson
Notch Capital Delivers Tremendous Value for Two Northeast Energy Providers
As we enter a new year and all the opportunities and challenges the winter season brings, the Notch Capital team is thrilled to announce a recent deal in southeastern Pennsylvania that we facilitated involving our long-term client, Harris Comfort.
Throughout 2025, our team advised Harris’s leadership as they worked to sell their business, a heating oil, propane and HVAC provider with over half a century of service to the Bucks County region. In December, they completed the sale to Wallingford, PA-based Wilson Oil & Propane, a forward-thinking oil and propane business committed to expanding its footprint across southeastern Pennsylvania. Notch Capital served as both the sole M&A advisor to the seller and a market-maker by finding a trustworthy, well-resourced and locally-based buyer in Wilson.
This transaction provided Harris Comfort with a smooth, favorable transition to new leadership while considerably growing the gallons that Wilson Oil & Propane delivers, expanding their customer base and their service region.
Two Highly-Regarded Businesses, One Unique Deal
Notch Capital worked closely with Harris Comfort to ensure they were well-positioned to enter the market with strong financials and a compelling value proposition for potential buyers.
As always, we guided our client through the sales process with an eye toward preserving the good name and reputation that Harris Comfort has built over more than 80 years in business.
“Jeff and the Notch Capital team were instrumental in finding the right buyer whose values aligned with ours,” said Bruce Harris, Vice President and a member of the third-generation ownership group of Harris Comfort. “We were not interested in engaging in a broad-based buyer search because our reputation was too important to us to sell to anyone. It was an absolute necessity that our employees and our legacy would be taken care of, and Jeff made sure that we found the company that would do that.”
David O’Connell of Wilson Oil & Propane shared that “Jeff did a wonderful job throughout the process, getting the parties together face-to-face to discuss important elements of the deal to ensure it would get done. Without his extensive background in M&A markets, we would not have gotten to the finish line.”
What Can Notch Capital Do for You in 2026?
This deal is the latest example of the incredible value our clients are receiving because of Notch Capital’s special focus and deep expertise in the delivered fuel and home comfort sectors across the eastern United States, as well as the M&A marketplace.
Bruce Harris says of his time working with Notch Capital, “Jeff and his team have tremendous insight into how you can manage your operation in the most efficient and profitable way. Jeff is a good guy to have on your side and he helped us run our business like it was his business. He operates with the highest degrees of trust and integrity. And we would not be in the position we’re in if it weren’t for the guidance we received from Jeff over the years.”
Regarding his experience on this deal with Harris Comfort, David adds, “When you’re looking at an acquisition deal like this, Jeff is the kind of partner you want. His intelligence is matched with warmth, humility and a personal touch you don’t often see in this business.”
Give Us a Call to Discuss Your Plans
Are you looking to expand, acquire or transition away from your business? Notch Capital’s unique position as a provider of wide-ranging financial advisory services combined with direct majority investment capabilities can help you maximize any outcome. Call Us: 860-299-3358.
Notch Capital is a private investment firm specializing in buyouts and recapitalizations of lower middle market businesses in the heating, cooling and home services industries. Notch Capital also provides advisory services to help these businesses strengthen their performance and analyze acquisitions.
By Jeffrey Simpson
Originally published as a featured column in the November/December 2025 Issue of Indoor Comfort Marketing.
We’ve all heard the old adage that “If you take care of the small things, the big things will take care of themselves.” There is wisdom in those words, but that’s not the whole story – especially if you’re a fuel dealer who is focused on long-term value as much as short-term profitability and success. The next heating season is upon us and with any luck, you’ll be dealing with a cold winter and the daily chaos that comes during peak season demand. Your challenge during these times will be to hold onto the long-term focus of your business as you’re dealing with your daily challenges. It will be easy to deprioritize financial and strategic decisions or to ignore the planning advice you may receive from your advisors and accountants. Don’t fall into the trap!
This is where KPIs, business intelligence software, receivables discipline and cash management are essential. But it’s not the systems that separate the best-in-class companies from building value even during the heating season – it’s the intention and alignment. You and your management have got to embrace the “big picture” value-building plan and commit to it completely, even on the toughest days. To help you strengthen both your long-term value while maintaining powerful short-term results through the winter, here are three critical areas I would encourage you to focus on.
Get the Right Margin
“Margin, margin, margin.” It’s been preached for years, but too many companies still set prices based on gut feel, competitor behavior, and outdated habits rather than their true cost structure. One maxim I’ve learned to live by is that the closer the margin decision maker is to the customer, the more likely it’s wrong. Owners and managers know costs are rising but often fail to capture the full impact when setting margin targets. While a comprehensive budgeting process remains the most effective way to avoid margin slippage, the variety of factors impacting costs in the current economy are proving tough to track.
Let’s start with inflation. As of August 2025, the Producer Price Index for HVAC and commercial refrigerant equipment rose by 3.7% over the past twelve months according to the Bureau of Labor Statistics, outpacing the 2.9% increase in the Consumer Price Index. Diesel costs are up roughly 6% since last September, and tariffs may further inflate vehicle and tank expenses. Meanwhile, compensation for managers, drivers, technicians and dispatchers continues to climb, and another overtime-heavy winter could take a bite out of profits again.
Insurance premiums, regulatory costs, and compliance burdens in some states add to the squeeze. Each may seem modest on its own, but together they erode margin fast.
In the end, your earnings – and ultimately your company’s valuation – are most tightly tethered to product and service margins. Consistent margin growth opens doors for financing, acquisitions, and business sales. Since actual costs almost always exceed expectations, assume higher expenses when budgeting and set margins accordingly. Overestimating costs and margin targets now is far safer than explaining missed targets later.
Expand Recurring & Repeating Revenues
When it comes time to make your next strategic move following the heating season, investing in the qualitative aspects of your business can be just as important as maximizing the quantitative markers. After all, a high-quality operation commands a higher valuation multiple. A healthy mix of both recurring and repeating revenue streams signals stability to financing partners and buyers. Recurring revenue is typically generated from contracts or subscriptions while repeating revenue is generated by loyal, reoccurring customers. Service contracts, propane tank leases and high tank control percentages are proven methods of producing recurring revenues. Delivery and hazmat fees (where permitted), automatic delivery customers, and robust equipment service offerings strengthen repeating revenue streams.
The development of these valuable revenue streams takes deliberate effort and they can be boosted each heating season as new customers are added. That means communicating your offerings effectively, and training and incentivizing your staff to promote programs that drive long-term relationships. In an industry notoriously impacted by weather, success in growing non-cyclical revenue shows managerial skill and serves to minimize roadblocks from financing partners and avoid weak offers from prospective buyers.
Know Your EBITDA Number
Unfortunately, a weak performance over the compressed earnings period in our seasonal industry can cast a long shadow. Having an overall earnings target derived from pre-season analysis is crucial. The most common earnings metric is Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) and is what banks and buyers look to first. Yet surprisingly few business owners calculate this goal ahead of the season. Building upon the per-unit or per-job margin notion cited earlier, an EBITDA target specific to your company can reveal the minimum earnings required to cover debt service and meet ownership income goals.
Your EBITDA target is best produced via a budgeting exercise but should also be informed by conversations with others, including a financial advisor, accountant or a business broker. Without multiple reference points, it is difficult for owners to determine whether they are underperforming against their peers. Knowing the minimum earnings level required to meet your bank’s debt service coverage and cash-flow leverage requirements is an important first step in determining your earnings floor. But understanding the typical range of what other companies of similar size and product mix earn is just as important in determining a reasonable earnings ceiling.
It’s Not Too Late
The winter rush can make it tempting to focus only on the immediate. It takes an entire fiscal year and thousands of hours of your time to forge results which will ultimately be on full display for your finance partners to evaluate. Spending a bit of time and attention now to ensure you are thoughtfully preparing for, and acting to positively influence, these big picture value determinants will help you and your management team take control of the story no matter what the weather brings.
Jeff Simpson is the founder and managing member of Notch Capital, a private investment firm specializing in buyouts and recapitalizations of lower middle market businesses in the heating, cooling and home services industries. Notch Capital also provides advisory services to help these businesses strengthen their performance and analyze acquisitions.
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