A few months ago, I wrote about Home Depot’s acquisition of Mingledorff’s and what it could mean for the future of HVAC/R distribution.

Now we have another piece of the puzzle.

This week, SRS Distribution announced its agreement to acquire Lohmiller & Co., a Denver-based HVAC/R distributor with four Colorado locations and approximately 220 employees. SRS, of course, is the specialty distribution business acquired by Home Depot in 2024 for approximately $18 billion.

At first glance, the Mingledorff’s and Lohmiller & Co. transactions might look like two regional HVAC distributor acquisitions.

I think they represent something much bigger.

Home Depot Building anHVACR Platform

Home Depot is not simply getting into HVAC/R. It appears to be deliberately building an HVAC/R distribution platform.

And the implications for manufacturers, distributors, contractors, and manufacturers’ representatives could be significant.

This Is a Roll-Up Strategy

The most important thing to understand is that Home Depot isn’t building an HVAC/R business by opening hundreds of HVAC/R branches itself.

It is using SRS.

That distinction matters.

SRS already has an enormous specialty distribution network. Rather than starting from scratch, Home Depot can acquire established distributors with experienced employees, contractor relationships, manufacturer agreements, inventory, warehouses, and local market knowledge.

Mingledorff’s was a major acquisition. Lohmiller & Co. is another important regional piece.

And Home Depot executives have already indicated that additional HVAC acquisitions are part of the strategy, describing the expected activity as modest bolt-on acquisitions designed to expand geography and add key manufacturer relationships.

That tells me these aren’t isolated transactions.

They’re pieces of a map.

Mingledorff’s gives SRS a significant HVAC presence in the Southeast. Lohmiller & Co. expands the platform into Colorado. Future acquisitions could fill in other geographic gaps or bring additional manufacturer relationships into the organization.

The ultimate objective could be a national HVAC/R distribution platform assembled through acquisitions rather than built branch by branch.

The Manufacturer Relationships May Be the Real Prize

One of the most interesting aspects of these acquisitions is the manufacturer side of the equation.

Both Mingledorff’s and Lohmiller & Co. have significant Carrier relationships.

That raises an important question:

Is SRS simply buying HVAC/R distributors, or is it strategically assembling manufacturer relationships and territorial coverage?

HVAC/R equipment distribution isn’t quite like selling commodity building products.

Manufacturers frequently have defined territories and established distributor networks. That makes geographic coverage and manufacturer authorization extremely valuable.

A company like SRS can potentially accelerate its national HVAC/R strategy by acquiring distributors that already have those relationships in place.

Instead of spending years developing a market, SRS buys an established position.

Instead of building a contractor network, it acquires one.

Instead of developing a warehouse and counter operation, it buys one that is already operating.

And instead of starting from zero with a manufacturer, it acquires an existing relationship.

That makes the acquisition strategy much more efficient.

Could HVAC/R Parts Be The Play?

But Don’t Overlook HVAC/R Parts

Here’s where I think Home Depot’s strategy gets particularly interesting.

Equipment is important, but parts and supplies could ultimately be an even bigger opportunity.

Home Depot executives have discussed the opportunity to leverage the company’s enormous retail footprint, e-commerce capabilities, and fulfillment infrastructure to expand HVAC/R parts distribution.

And there is a major difference between equipment and parts.

Equipment distribution can be restricted by manufacturer and geography.

Parts are much more portable, and profitable.

A contractor doesn’t necessarily care where a capacitor, contactor, filter, motor, thermostat, or other replacement component originated. They care whether it is the right part, whether it is available and whether they can get it when they need it. And Home Depot has lots of pick-up locations, let alone a strong website. Independents cannot compete with that delivery model, if the contractor needs it.

Now combine SRS’s specialty distribution network with Home Depot’s existing infrastructure.

You potentially have:

• Thousands of locations
• Regional distribution centers
• Online ordering
• Delivery capabilities
• Contractor accounts
• National purchasing power
• Established HVAC distributors
• Existing manufacturer relationships
• A massive consumer and professional customer base

That’s a formidable combination.

The Real Goal May Be the Contractor’s Entire Wallet

This is where Home Depot’s strategy goes beyond HVAC/R.

Home Depot already owns SRS, which operates across multiple specialty construction categories. It also owns HD Supply, giving the company another significant position in professional distribution.

The opportunity is to become a much larger part of the contractor’s overall purchasing relationship.

Consider a multifamily project.

A contractor might need roofing products, HVAC/R equipment, HVAC/R parts, tools, jobsite supplies and a long list of other construction materials.

Historically, those purchases may have been spread across several specialized distributors.

Home Depot’s strategy potentially brings more of those purchases under one corporate umbrella.

That doesn’t mean contractors will suddenly abandon their existing suppliers.

In fact, I don’t think that’s the immediate objective.

The objective is much simpler:

Increase the percentage of the contractor’s total purchases that flow through the Home Depot ecosystem.

That’s a powerful strategy.

What Does This Mean for Independent HVAC/R Distributors

This is where things get especially interesting.

Independent distributors still have some enormous advantages.

The biggest is their relationships.

A successful HVAC/R distributor isn’t simply a warehouse full of equipment.

Contractors rely on distributors for technical knowledge, emergency parts, jobsite support, product recommendations, credit, inventory decisions, and people who actually know their customers.

That’s difficult to replicate.

And that’s another reason the acquisitions make sense.

Home Depot isn’t just buying warehouses.

It is buying people, relationships, expertise, inventory, and local market knowledge.

Mingledorff’s and Lohmiller & Co. already know their markets.

They already know the contractors.

They already know the manufacturers.

They already have employees who understand HVAC/R.

Home Depot can bring the scale and infrastructure.

The acquired companies bring the local expertise.

That combination is the competitive threat.

But if the contractor values more than a personal relationship, the new platform can deliver (and, since it is acquiring distributors, it is acquiring relationships.) The difference may be the culture. Relationships are more than personal interactions. Nowadays they are based upon performance.

What Does It Mean for Manufacturers’ Reps?

I think this is an area worth watching very closely.

Manufacturers’ reps live in the space between manufacturers, distributors, engineers, contractors, and the market.

As distribution becomes more consolidated, manufacturers may have fewer—but significantly larger—distribution customers.

That can change the dynamics.

Large national or regional distribution companies will have more purchasing power and potentially more influence with manufacturers.

At the same time, manufacturers will still need people who understand local markets, specifications, contractors, and applications.

In other words, scale may make the rep more important in some areas, not less.

A distributor can provide inventory and logistics.

A manufacturer can provide the product.

But someone still has to create demand, develop specifications, train contractors, identify opportunities and solve problems in the field.

That’s where local market expertise remains extremely valuable.

What’s Next for SRS / Home Depot

The next few acquisitions will tell us a lot.

I would be watching for three things.

1. Geography. Where does SRS continue filling in major HVAC/R markets across the country? If you are an HVACR distributor looking to sell and are of a reasonable size, SRS probably has the deepest pockets if top-dollar is your primary goal.
2. Manufacturers. Does it continue acquiring distributors with similar OEM relationships, or does it begin adding distributors representing other major equipment manufacturers?
3. Parts. How aggressively does SRS integrate HVAC/R parts distribution with Home Depot’s existing supply chain and digital capabilities?

If we start seeing acquisitions that deliberately add different manufacturers and different geographic territories, the strategy will become much clearer.

At that point, we’re no longer talking about Home Depot buying branded HVAC/R distributors.

We’re talking about Home Depot assembling a national HVAC/R distribution network (remember, in retail, they have multiple brands. Which supplier says “no” to them?)

The Bigger Picture

I don’t believe the story here is that Home Depot wants to replace every independent HVAC distributor.

That’s neither realistic nor necessary.

The bigger story is that Home Depot appears to recognize the enormous value of the professional contractor market—and HVAC/R is too large and too important to ignore.

Mingledorff’s was one piece.

Lohmiller & Co. is another.

There will likely be more.

And the most important question isn’t necessarily, “Who will Home Depot buy next?”

It’s this:

What does the HVAC/R distribution channel look like when a company with Home Depot’s financial resources, technology, logistics and purchasing power combines those assets with the relationships and expertise of established HVAC/R distributors?

We don’t know the answer yet.

But the strategy is becoming easier to see.

Home Depot isn’t simply entering the HVAC/R market. It appears to be building the infrastructure to become a major force in how HVAC/R products move from manufacturers to contractors.

And for everyone involved in this industry—from manufacturers and reps to distributors and contractors—that’s something worth paying attention to.