Nexstar Network Breaks Up with Private Equity, Refocusing on Independent Contractors

At a time when private equity ownership is reshaping everything from pricing models to workforce culture in the skilled trades, Julian Scadden just made one of the boldest moves the residential home services market has seen in years. The Nexstar Network president and CEO announced that the organization has parted ways with every private equity–backed member, effectively cutting one-third of its membership and nearly half of its revenue.

Scadden’s decision stands as a rare act of resistance. Nexstar, one of several contractor training and business development organizations in North America, is deliberately walking away from big money to protect the small business owners and technicians it was built to serve.

The choice wasn’t about profits — it was about purpose. Scadden describes it as an intentional step to preserve Nexstar’s mission of helping independent contractors grow sustainable, people-centered companies in an increasingly consolidated marketplace.

“Nexstar members are the top 5% of home service providers in the HVAC, plumbing, and electrical markets, meaning in year-over-year growth and profitability,” Scadden says. “As you can imagine, these are the most attractive businesses for an investor. It started slow with a member or two being acquired, but then it took off very quickly — almost like wildfire. Private equity has unlimited resources. Every moment we had a coach working with people at that level of business maturity, they were not working with a $2 million business who wasn’t sure how to price correctly. We were in direct opposition of our own mission.”

Scadden notes that the decision to part with private equity did not come overnight. It was a decision made over a year ago and approved by the board of directors after examining all possible strategies and outcomes, including creating a separate business devoted to private equity companies. In the end, Nexstar realized it just wasn’t a good fit.

Private equity members of Nexstar Network were informed earlier this year that their memberships would expire at the end of 2025.

“This shift gives our members the space to focus on what truly matters, their craft, their people, and their customers,” says Claire Ferrara, board chairperson at Nexstar Network and president of Standard Heating & Air Conditioning. “Without the distraction of private equity influence, our contractors can lean into their own strengths and challenges and learn from one another more intentionally. Many of our members are doing innovative, value-driven, and modern work, and Nexstar can serve as a catalyst for sharing, refining, and amplifying those ideas. That collaboration will help our members continue to lead and differentiate themselves in a rapidly changing industry.”

Reallocating Resources

Though Nexstar will lose roughly one-third of its membership and about half of its revenue in its decision to part ways with private equity-backed members, Scadden notes it is financially sustainable for the organization. He credited Nexstar’s strong financial foundation and its long-term planning for making this transition possible.

“We're member owned, so every dollar of profit that we make either must go back in the form of goods and services to our members, or it goes into an investment reserve,” he explains. “There are no equity holders, there are no dividends or distributions. So this money just goes into a reserve.”

That reserve, established nearly a decade ago under former CEO Jack Tester, was designed to safeguard Nexstar’s ability to serve its members during times of disruption. “Should something outside of our control impact our ability to serve our members, we have this investment reserve to continue serving and that the membership shall not feel a gap in service,” Scadden says

Thanks to this foresight, Nexstar expects no layoffs, no reduction in services, and no disruption for current members. Additionally, the private equity departure opens opportunity for Nexstar to rebuild membership in those previous off-limit service areas.

“Similarly to private equity, there are franchise models and corporate models [in the home services market],” Scadden adds. “If you’re an enterprise business with 20 locations, each doing $50 million, we’re not looking to be influential or even relevant to you. Nexstar is built to be an accelerator, not an incubator, but we're also not a facilitator of enterprise businesses. I have never been a person who fights for my slice of the pie. I've been a person that looks, how do we make the pie bigger? I know what our market share is focused on, and that is the trades person striving to become a strong business person. There will never be a shortage of these people.”

Ferrara adds that private equity firms were not the only large players within Nexstar Network. “Our network includes companies with revenues of $50, $70, $100 million and beyond, all eager to share their knowledge. In many ways, their insights may be even more relevant to our members, since they’ve achieved remarkable growth without the support of private equity. That kind of experience offers powerful, real-world lessons for others in the network.”

Reactions

According to Ferrara, Nexstar member response to the announcement has been overwhelmingly positive. “Not just from small members, but from the majority of members across Nexstar. Many have expressed relief and appreciation for the clarity this decision brings around the organization’s purpose and who it serves. Overall, there’s a strong sense of alignment and optimism, many expressing a renewed excitement, about the future.”

Ferrara expects the organization’s culture to return to its roots of collaboration, which has been a hallmark of Nexstar’s strength in the past, she notes.

“Without the presence of large corporate groups, our independent members already seem more open to sharing ideas and engaging with one another again,” Ferrara adds. “There is a renewed sense of energy and connection amongst the network, and I believe it will continue to grow into a culture centered on industry-leading excellence, achieving greatness alongside others who share that same drive.”

Canadian member, Connor Williams, president of Ashton Plumbing, Heating, and Air in Richmond, British Columbia, notes the decision is an interesting one.

“I have a lot of friends chosen to move on with private equity, and we’re happy for them and that they were able to achieve that in their life,” Williams says. “The courageous decision Nexstar made is awesome. This organization provides a ton of value to everybody, but specifically people that are going from that $3 to $5 million mark and beyond. So much value there. It just feels different this year. Nexstar stayed with its core values, and it feels like the old days when I first came here. It's nice.”

Scadden assures that Nexstar Network will continue to grow and remain profitable.

“Nexstar has never been focused on what our top line or bottom line is,” he notes. “Our mission is helping tradespeople who want to become business people. Our success will be measured in the growth of the members that choose to engage with us.”

For the last 33 years, Nexstar has grown every year, and that indicator means the organization has helped its members achieve their dreams, Scadden notes. “Rather than the headline be on this sunset of private equity members, I would much rather tell the story of how we created so many multi-millionaires through our process.”

The bottom line is Nexstar is returning to basics. “Our strategic mission will be to remain true to the reason we were founded,” Scadden adds.