theses

3x EBITDA Thesis: The AI-Enabled Rollup. Cutting SG&A Across Fragmented Services

Lee McCabe

12 Oct 2025 — 1 min read

There’s a quiet revolution happening in home services and AI is the catalyst. Industries like HVAC, plumbing, and home cleaning are notoriously fragmented, with thousands of independent operators running subscale businesses. But while the field teams are delivering services well, what’s behind the scenes is wildly inefficient: manual scheduling, paper-based estimates, overwhelmed call centers, and legacy CRMs.

That inefficiency is margin waiting to be captured.

An AI-enabled rollup strategy focuses on acquiring these businesses and centralizing their operations, then driving scale through automation. Think of scheduling tools that route jobs based on technician skill, location, and real-time traffic. Or AI voice agents that handle inbound calls, book jobs, upsell service plans, and sync seamlessly with CRMs. Add on automated invoicing, customer follow-ups, and AI-driven maintenance reminders, and suddenly the SG&A burden looks very different.

We’ve modeled and seen 20–30% EBITDA margin expansion from cost savings alone, before any upside from revenue growth, brand consolidation, or improved customer retention. In a space where many companies operate at sub-10% EBITDA, that kind of lift is transformative.

The key is integration discipline: standardized tech stacks, clear post-close playbooks, and a leadership team fluent in both services and software. PE firms that get this right won’t just create bigger businesses, they’ll create smarter ones.

This is the future of rollups. Not just buy and bundle, but buy and automate.

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Private equity has quietly entered a new sport: competitive talent hoarding.

AI isn’t coming for middle management. It’s already rearranging the job description.