The Home Services Market is Ripe for Savings

The U.S. home services market is exploding and projected to reach $1.8 trillion by 2030.

 

In 2023, the home services market grew 18%, driven by private equity and increased demand. Companies on the forefront of this trend have experienced rapid, even double-digit growth in acquisitions. Deal volume, up 15% in 2023, continues to rise and private equity firms have played a critical role, representing 35% of all deals in this sector.

That said, the rapid growth and enormous success notwithstanding, many of these acquiring firms are now faced with monitoring, supporting and paying for hundreds, even thousands of individual and disparate telecom and technology contracts, licenses, devices and lines spread across numerous brands and business locations.

 

 

Technology is driving marketing growth and acquisitions.

It’s clear this boom is led by Tech-Driven Acquisitions. As much as 70% of recent home services M&A deals involved acquisitions with existing platforms for customer management, scheduling, or IoT-enabled service delivery.

• HVAC-Specific Technology: Smart HVAC systems, such as those offering remote diagnostics or IoT-enabled thermostats, are a major driver. Companies are acquiring smaller players to access these systems and associated service contracts. 35% of HVAC M&A deals in 2023 included assets like proprietary IoT software or maintenance monitoring contract.
• Roofing Contracts and Tools: In roofing, acquisitions often include software for estimating project costs, drone imaging for inspections, and CRM tools for lead generation. Roofing companies also inherit vendor agreements for materials, adding 5-10% to integration costs for renegotiation/optimization.

Some more fun facts:

• More than 60% of the deals in 2022-2023 involved strategic acquisition of technology assets.
• In 75% of M&A deals, acquiring companies face the challenge of integrating and optimizing inherited technology contracts.
  • Companies in this sector spent an average of $1.2 million per deal on technology upgrades in 2022.
  • The average integration of technology contracts can add 10-15% to overall deal costs.
  • Nearly 50% of acquirers invest in upgrading or replacing inherited technology and devices within the first-year post-acquisition.

The technology challenges are myriad. Legacy systems with outdated software and manual business processes can be costly to upgrade or replace. Vendor agreements for devices, licenses and materials for the acquired business, can conflict with existing agreements creating inefficiencies that if not addressed, can grow quickly and exponentially. Furthermore, inaccurate inventory of devices and licensing compounds the potential for billing errors and overpayment. All of this can lead to a significant waste of money.

Clearly, managing the disparate technology and telecom contracts that come with acquiring multiple companies is a complex task, often requiring a systematic approach to integration and optimization. Most executives faced with this scenario know what they need to do in order to set the stage for success and create a business process protocol for future growth and success.

1. Conduct comprehensive audits
2. Streamline and consolidate contracts
3. Invest in Integration Tech
4. Manage Costs and Risks
5. Ensure Operation Continuity
6. Leverage Expertise for Optimization

In our experience though, these executives frequently do not have the resources and or expertise to remedy the issues and to maximize the outcome. Especially at the same time when, in some cases, these companies are experiencing double-digit growth in acquisitions. They cannot afford to have critical staff spending precious time hunting down mobile phones and tablets or digging into procurement contracts and user licenses to make sense of and re-align it all for success.

Moreover, and to that last task – “Leveraging Expertise for Optimization,” Bain & Co. predicts that in 2025, M&A Market Leaders will be those who initiate “clean teams” — 3rd-party expert teams that can analyze and quickly identify errors, overlaps and inefficiencies, dig into contracts and negotiate with vendors for better terms and service and ensure regulatory compliance throughout the transition.

It should not surprise you when we say then that Intelligent Bills IS the expert technology clean team.

We will take on the data collection, analysis and deep due diligence of your technology spend and provide an accurate inventory of services, equipment, and contracts. We audit, analyze and optimize the entire process, and put you in a favorable negotiating position with vendors. We will alleviate frustration, reduce costs, save time, and allow your team to focus on success.

Intelligent Bills can:

• Reduce and Recover costs through strategic sourcing, contract renegotiation and billing error corrections.
• Improve operational efficiency and scalability.
• Reduce the time and resources needed to compile inventory.
• Refocus IT/Telecom team to prioritize conversion projects.
• Improve customer experience for all.
• Save you up to 50% on your annual IT/Tech spend.

We have been working closely with leading home services market companies helping them optimize their technology spend. Check out our case studies on TurnPoint Services and read all about  how we saved them more than $4 Million dollars in annual technology spending last year.

 

• Case Study – Mobility Sourcing and Savings in M&A
• Case Study – Software Licensing Renegotiation Savings

 

 

If you’d like to talk more about how we might be able help you transition and optimize your acquisitions and save money in the process, contact us.