RACA Journal May 2026 RACA_May_2026 | Page 8

INTERNATIONAL NEWS international news

Conglomerates are also rebalancing. Some are doubling down on HVAC as a core growth engine, while others are selling out of businesses that no longer fit their long-term strategy. This constant reshuffling of portfolios keeps assets in play, and with so many willing buyers, valuations remain attractive.

Finally, the private equity community continues to be drawn to HVAC & R. The business has long replacement cycles, generates steady service revenue, and is still fragmented in many markets. That makes it ripe for consolidation plays. Funds are snapping up contractors, distributors and service providers, often rolling them into regional or national platforms.

All of this activity brings both opportunities and risks. For strategic buyers, the big challenge is integration: acquisitions fail as often as they succeed, particularly when blending different corporate cultures or product portfolios. For sellers, the message is clear: businesses with strong service revenues, digital capabilities and well-documented processes will command the highest premiums. For contractors and distributors, consolidation upstream means supplier relationships and pricing could shift, so diversifying partnerships is becoming a smart defensive strategy. The net effect for end-users is likely to be faster access to connected, efficient HVAC solutions. Expect bundled offerings

– equipment paired with monitoring, controls and service – to become the norm. Prices for commodity equipment may come under pressure as scaled players compete, while the value-added service side will remain firm. Innovation in refrigerants, indoor air quality, and high-performance cooling is also likely to accelerate, as companies buy rather than build their way into the next generation of technologies.

The report further suggests that what’ s clear is that HVAC & R is no longer a quiet backwater of industrial equipment. It is now seen as a critical enabler of decarbonisation, data and digital buildings – and investors are taking notice. Whether through megadeals like Bosch’ s, portfolio reshaping as seen with Carrier, or niche bets like Daikin’ s data-centre focus, the industry is transforming rapidly. In short: HVAC & R has become one of the hottest sectors for M & A, and the climate – in every sense – is driving it. RACA

Access the report here: https:// www. originmerchant. com / wp-content / uploads / 2025 / 04 / Origin- Q1-2025-MA-Review-on-HVACR. pdf? utm

TECHTALK networking

INSURANCE GUARANTEES IN CONSTRUCTION CONTRACTS

By Eamonn Ryan

A practical alternative to bank guarantees for HVAC and refrigeration contractors.

At the February TechTalk hosted by the SAIRAC

Johannesburg Centre, Vanessa Loots delivered a highly practical and engaging presentation on a topic that many contractors only truly appreciate when cash flow starts tightening: performance guarantees.

Loots, who has been involved in the insurance industry since 1999, specialises in insurance guarantees within construction contracts. Drawing on that experience, she established Imvusa Brokers nearly two decades ago. Her message to SAIRAC members was that insurance guarantees are not new, they are not experimental, and they are not‘ second best’ to bank guarantees. In fact, for many contractors, they are a far more practical solution.

WHEN GUARANTEES BECOME RELEVANT“ Guarantees typically enter the picture when contractors move beyond routine service work and begin undertaking larger installation contracts – the kind that stretch over months and form part of major developments, and where failure to perform would have a financial impact on the employer,” Loots explained.

She pointed to projects such as HVAC installations in shopping centres, industrial refrigeration systems, cold storage facilities, hospitals and increasingly, data centres. These projects are capital-intensive, time-sensitive and technically complex. A delay in one package can affect the entire build.

“ At this level, guarantees are a standard contractual requirement,” she noted.

6 www. refrigerationandaircon. co. za RACA Journal I May 2026