There’s a truck in your driveway. Local phone number on the side. The website you visited yesterday says “serving Central Indiana since forever.” The tech at your door seems like a nice guy, and matches the text received from area code 901.
But who owns the company?
That question used to have an obvious answer. Now it doesn’t.
Private Equity firms have been buying up home services companies across the United States at a serious pace. Including right here in Indianapolis. The pitch to homeowners stays the same. The name on the truck stays the same. The accountability to your neighborhood? That quietly goes to the accountants in a large office building a few hundred miles away.
Here’s how to figure out whether you’re calling a locally owned shop, or part of a portfolio managed in West Tennessee, The Hills of Texas or Northern Illinois.
- Out-of-state plates with a local phone number.
- The van in your neighbor’s driveway has an Ohio, Michigan or Tennessee plate. The number on the side is 317. That’s a common footprint after an acquisition the PE firm is still building out local operations, but the back office and fleet are coming from out of state.
- A genuine Indiana company has Indiana plates.
- Out-of-state area codes on the truck.
- Same idea, different spot. If the phone number on the door doesn’t start with 317 or 463, ask yourself who is dispatching the professional at your door.
- Service offerings that stack up QUICK! Like within weeks.
- A company that has spent twenty years doing electrical work is suddenly also offering plumbing and HVAC. That’s not organic growth. That’s acquisition and merger. Firms buy companies in multiple trades and bundle them under one roof to monopolize residences and clients.
- The electrician you’ve appreciated for years hasn’t earned his plumber’s license in a matter of months.
- A sudden spike in advertising, then silence.
- Private equity firms pour money into marketing right after an acquisition to protect market share and signal confidence. Then a few months later it fades out as the focus shifts to the next deal.
- Locally owned companies tend to advertise steadily because they’ve built a long-term reputation, and want to keep it top of mind.
- Your “Heat and Cool” company website now has links to other companies, and some are HVAC firms.
- Go to the footer or the “about” page. If there’s a row of logos or links pointing to a dozen other service companies across different cities and trades, chances are a PE firm is involved.
- Local shops keep website visitors on their page with a defined service area.
Why It Matters
Generally speaking, private equity companies are built to grow, get bought again at a higher multiple and move on. That sewer replacement is a line item in a portfolio.
When a locally owned company does your plumbing, and something goes to Sh*t, it runs uphill to the person ultimately responsible. That person, when locally owned, lives in Indy. They run into customers throughout the community. That accountability is always in the back of their mind, and the team they employ.
L.D. Smith Plumbing and Drains will be a “water only” fixture in Indianapolis. You will see me hanging with JMV, skiing the White River and enjoying live music regularly. The professionals on the team will be driving maintained vans with Indiana tags and Sophie on the side. We will continue taking on the “Dirty, Stinking, Honest.” jobs few others complete.
Cheers!
– Lance D. Smith, Owner
L.D. Smith Plumbing and Drains