The Best Industries for Niche Roll-Ups in 2026

Roll-ups work in fragmented industries. But not every fragmented industry is a good roll-up candidate. The difference between a successful roll-up and an expensive lesson is understanding which industry characteristics create value through consolidation and which ones just create complexity.

What Makes an Industry Roll-Up Friendly

High fragmentation. The industry should have thousands of independent operators, with no single player holding more than 5-10% market share. This ensures a deep target pipeline and room for multiple acquisitions.

Recurring or repeat revenue. Businesses with maintenance contracts, subscription models, or high customer retention rates are more valuable in aggregate than project-based businesses. Recurring revenue provides stability, predictability, and higher exit multiples.

Local service delivery. Industries where work is performed locally (within a geographic radius) create natural bolt-on opportunities. You can expand coverage area without changing the service model.

Aging ownership. Industries dominated by Boomer-generation founders who are approaching retirement provide a steady supply of willing sellers at reasonable multiples.

Back-office scalability. The operational value in a roll-up comes from centralizing functions like accounting, HR, marketing, purchasing, and technology. Industries where these functions can be standardized across locations create the most synergy.

Low technology risk. Industries with stable technology requirements are easier to integrate. If the service model could be disrupted by a technology shift, the roll-up thesis is at risk.

Top Industries for 2026

Residential HVAC and Plumbing. Massive fragmentation (60,000+ independent operators in the US), recurring revenue through maintenance contracts, aging owner demographics, low technology risk, and proven roll-up playbooks from successful platforms like Wrench Group and Home Alliance.

Dental Practices. 120,000+ dental practices in the US, most independently owned. DSO (Dental Service Organization) model is well-established. Recurring patient relationships, insurance reimbursement provides revenue predictability, and new graduate dentists increasingly prefer employment over ownership.

IT Managed Services (MSPs). 40,000+ MSPs in the US, most under $5M revenue. Monthly recurring revenue models, sticky customer relationships, and growing demand as SMBs rely more heavily on technology. Proven MSP roll-up platforms demonstrate the model works.

Commercial Cleaning and Janitorial. Highly fragmented with low barriers to entry but significant barriers to scale (workforce management, quality consistency, insurance). Contract-based revenue with 80-90% annual retention rates. Geographic density creates meaningful route optimization synergies.

Home Healthcare and Senior Care. Demographic tailwinds (aging population), recurring revenue from ongoing care arrangements, regulatory requirements that create barriers to entry, and a massive fragmentation of small owner-operated agencies.

Landscaping and Grounds Maintenance. Similar dynamics to HVAC: massive fragmentation, recurring maintenance contracts, local service delivery, aging ownership, and proven roll-up success stories.

Veterinary Practices. 30,000+ independent veterinary practices in the US. The vet consolidation wave is 5-10 years behind dental. Pet spending is countercyclical. New veterinary graduates carry significant student debt, making practice purchase difficult and employment attractive.

Industries to Approach with Caution

Restaurants and hospitality. High failure rates, low margins, consumer-dependent, and difficult to standardize across locations.

Retail. E-commerce competition, changing consumer preferences, and inventory risk make retail roll-ups challenging.

Professional services (accounting, law). Key-person risk is extreme. The partners ARE the business. Roll-ups work in accounting (see the CPA firm consolidation wave) but require careful management of the human capital dynamics.

Construction. Project-based revenue, high cyclicality, and bonding/insurance complexity make construction roll-ups capital-intensive and risky.

How Ted Sources for Roll-Ups

Ted is particularly effective for roll-up sourcing because the target criteria are highly specific and the volume requirements are high. A roll-up executing 3-5 acquisitions per year needs to screen hundreds of targets monthly. Ted delivers thesis-matched targets continuously, ensuring the acquisition pipeline never runs dry.