How Winter Weather Is Shaping the Propane M&A Market in 2026

“Brr! It’s cold in here.” That could easily have been the tagline for much of this winter across the northern United States. Propane marketers in the upper Midwest and Northeast felt it firsthand, as temperatures routinely fell below seasonal norms and multiple intense cold waves tightened supply logistics and drove sustained demand — conditions that are now shaping the propane M&A market in 2026.

January and February delivered scenes not witnessed in years, like the Hudson River icing over near Manhattan, New York, and measurable snowfall in Orlando, Florida. Record-breaking lows made national headlines: Watertown, New York, plunged to -34 F on Jan. 24, setting a daily record, while Cleveland, Ohio, endured its coldest sustained stretch of daytime highs (17 F or lower) in decades, tying records dating back to the late 1800s. Even parts of the Southeast joined the deep freeze, with cities such as Jacksonville, Florida, and Savannah, Georgia, recording their coldest November mornings since 1976.

Meanwhile, on the literal opposite side of the country, the story could not have been more different.

Much of the West region experienced unseasonal warmth. California, Oregon, Washington and portions of the Southwest logged one of their warmest Decembers on record, with temperatures running well above long-term averages. A weakening La Niña pattern, shifting polar vortex dynamics and other atmospheric forces combined to create sharp regional contrasts and inconsistent storm activity across the West.

I saw it firsthand while skiing in Utah in mid-February. As the chairlift climbed higher, we passed stretches of bare, brown mountainside that looked more like late summer than peak ski season — something I hadn’t witnessed in more than 30 years on the slopes.

These stark regional differences may shape how we exit the busy season and could influence the dynamics of the 2026 mergers and acquisitions (M&A) market — and much more — in the months ahead. This “tale of two winters” is more than a weather story. It may shape the tone and trajectory of the 2026 propane M&A market.

EBITDA Dispersion: Creating Opportunity & Motivation

Colder-than-normal conditions in northern markets likely supported stronger winter volumes and improved near-term EBITDA (a common measure of a company’s financial health) for many retailers. For owners who have now experienced back-to-back solid seasons, this may reinforce confidence in pursuing a sale while earnings are strong, visible and defensible.

Conversely, operators in warmer regions may have faced softer volumes, margin compression or customer attrition. For some, this could accelerate succession-driven exit decisions, particularly among owners already contemplating transition.

For buyers, these situations often present opportunity. Underperforming assets in otherwise attractive geographies can frequently be repositioned through operational integration, route optimization, enhanced pricing discipline and improved back-office efficiency.

What is the result? Wider regional performance dispersion. Historically, dispersion tends to increase transaction conversations, but it also intensifies scrutiny during due diligence.

A Greater Focus on ‘Normalized’ Earnings

When weather materially impacts performance, buyers inevitably lean into normalization analysis. Degree days, multiyear gallon averages, customer retention metrics, margin consistency and working capital trends will be central to valuation discussions in 2026.

We expect transaction structures to reflect this dynamic. Earn-outs tied to customer retention, gallon thresholds or EBITDA targets may become more common. Seller notes and disciplined working capital adjustments will likely remain prevalent. Buyers will seek durability, not just peak performance.

Interest Rates: Incremental Relief, Not a Windfall

Macroeconomic conditions remain central to the M&A equation. While expectations suggest modest interest rate relief relative to peak levels, uncertainty persists around both timing and magnitude.

For propane acquirers, this likely translates into continued lender discipline. Leverage will remain available for strong credits and well-performing assets, but underwriting standards should stay measured. With bonus depreciation back in place, strategic buyers may continue utilizing leverage efficiently to enhance after-tax returns, but we are unlikely to see a return to the aggressive capital environments of prior cycles.

Supply Stability & Margin Visibility

From a commodity standpoint, expectations for steady propane production and adequate inventory levels reduce the likelihood of extreme price volatility. That stability matters.

When marketers can forecast cost of goods and margin behavior with greater confidence, buyers can more reliably underwrite cash flow durability, one of the primary drivers of valuation multiples. Predictability supports confidence, and confidence supports transactions.

Continued Consolidation in a Fragmented Industry

The propane distribution landscape remains highly fragmented. Private capital and strategic buyers alike continue to view the sector as attractive due to its recurring revenue characteristics, essential-service nature and opportunities for operational consolidation.

Those structural fundamentals have not changed. If anything, regional divergence may reinforce consolidation logic. Buyers can diversify geographic exposure, smooth weather variability, enhance route density and strengthen supply positioning through targeted acquisitions. Scale continues to provide both offensive and defensive advantages.

Expert Viewpoints From Industry Leaders

Trent Hampton — Lakes Gas:
“My view on M&A is that there will be a vigorous M&A market with midsize and large retailers, and some [private equity], looking for deals. Some of the supply and labor challenges may encourage more small marketers to think about selling, and if the cost of capital (interest) comes down, that might spur even more activity. I’m also optimistic for the industry in general heading into the 2026-27 season.”

Steve Wambold — Lettermen’s Energy:
“As we look toward 2026, it feels like the propane M&A landscape could be a bit of a mixed bag. In some parts of the country, political pressures and another stretch of warm winters are making things tougher for local operators. That’s real, and we’re hearing it directly from owners.

“At the same time, this industry has always proven its resilience. The fundamentals remain strong, and there continues to be real demand for reliable providers. We’re also seeing continued interest from well-capitalized operators — Lettermen’s included — who can offer owners a strong path forward while preserving what they’ve built.

“From where we sit as both an operator and an acquirer, we’re optimistic about the year ahead and confident in the long-term strength of this industry.”

Sean Daugherty — Reliable Energy Partners:
“As we exit the winter months, Reliable Energy Partners remains optimistic about our M&A position. 2025 marked a banner year for us, with the acquisition of five businesses and several remarkable milestones achieved. While we celebrate these early successes, our ambition continues to grow for 2026 and beyond. Many marketers enjoyed a strong and profitable winter, and with favorable economic conditions on the horizon, we believe the acquisition market will be robust and advantageous for both sellers and buyers this year. We intend to be strategically active, eagerly reviewing new deal opportunities and further strengthening our reputation as the acquirer of choice.”

Anthony Silecchia — Star Group:
“We expect M&A activity to remain strong throughout 2026 with established, premier businesses leading the way on valuations. Their ability to maintain pace with the colder weather and storm challenges of this winter should be evident in volumes, margins, account growth and on bottom lines, underscoring the stability of the platforms they have worked so hard to build.”

Jordan Landrum — Guardian Propane Partners:
“I see this upcoming season as the year we move beyond just tech adoption and really commit to integration. Organizations interested in holding expenses flat while expanding into new markets need the tools to do more than maintain — they need to intelligently point to tangible action items. If our technology works for us, our talented team members can focus on what’s truly important to the customer.”

The Bottom Line for 2026

The most probable scenario for 2026 is not a dramatic spike in transactions, but rather steady, strategic deal flow. Premium assets in strong markets should command healthy valuations. Average or weather-impacted businesses will still transact, but with more conservative structures and sharper buyer discipline.

In short, the propane M&A market appears poised for continued activity, shaped not only by interest rates and commodity dynamics but also the lasting effects of a winter that reminded us just how regional this business can be.

After a winter that highlighted the industry’s regional dynamics, geography may prove to be one of the defining drivers of dealmaking in the year ahead.