Shortly after David Gallo joined Gallo Mechanical in the mid-1980s — the family business his grandfather founded in 1945 — the price of oil plummeted, sending the New Orleans economy into a tailspin and killing the commercial construction business that was the firm’s bread and butter.
“We literally got kicked out of Hibernia Bank,” Gallo said. “We were a 40-year-old company at the time and had no work.”
It was a baptism by fire that Gallo never forgot and one the company successfully weathered by being lean, scrappy and working hard.
Today, Gallo Mechanical, which builds, installs and services HVAC systems for commercial and industrial clients, is growing by 50% a year, with more than 700 employees and revenues projected to top $500 million this year.
Last summer, Gallo did what he vowed never to do — he sold the company, with his family’s unanimous consent, to a Texas-based private equity firm. The deal, he said, was the best thing that could have happened for Gallo Mechanical’s future and its employees.
In this week’s Talking Business, he discusses what was behind the decision to sell, the work the company is doing for Meta’s data center and the nonprofit organizations he is helping to run now that he is retired.
Interview has been edited for length and clarity
During your 30-plus years running the company, Gallo Mechanical saw tremendous growth. How did that happen?
After Katrina, we were only in the Greater New Orleans area, and I realized you can’t have all your eggs in one basket. So, we started diversifying geographically. But the really big catalyst came in 2018-2019, when we moved into the Carolinas.
The markets in North Carolina have six times as much work as we do here — heavy commercial construction, universities, hospitals, high-end manufacturing in the Research Triangle. There are so many companies building these huge mechanical facilities and they all need what we do.
Wasn’t it hard to break into a booming market where your name was not well known?
Yes, but we did know the fundamentals of our business. We were doing a type of 3D modeling called Building Information Modeling, or BIM, that was a little ahead of the game and transcended us to another level. We had done market research, so we knew there was a need. We also had some connections, which led to us to acquire a company that was going out of business, and we ended up hiring a lot of their people.
That is really what fueled our growth over the last five years. And it is anticipated that in 2026, we will do more work in the Carolinas than in Louisiana.
That’s kind of sad, for Louisiana, I mean.
We are doing great in Louisiana. It’s just that we’re doing that much more work there. There is no end in sight for the work that we do in the southeast U.S. It’s data centers, high-end manufacturing, chip manufacturing. And with the aging of America, hospitals are constantly redoing their facilities.
Tell me about the data center work. I saw Gallo trucks at the Meta site last week.
We are working there as a sub for a sub and have about 100 people up there. We are hearing that this could last as long as 10 years, which is a long time in our business. I hate to say there is no end in sight, but there is no end in sight.
What about the health of the New Orleans market?
It is not growing. Medical and Tulane University are the big drivers and, hopefully, the Convention Center hotel, but we are limited because of our location. The expansion boom in the middle of the southeast includes north Louisiana, but it’s not coming down to the Gulf Coast.
The loss of local companies to private equity is often decried as a bad thing. Why did your family decide to sell?
I had no anticipation of ever selling until 2023, when a guy from another company like ours that had just sold told me about his experience, and I thought it was in my family’s best interest to explore. We did not put the company up for sale, but we hired an investment bank to help us if a deal came along.
That coincided with the AI data center boom, and in early 2025, the bank told us the market was crazy for companies like ours. In March, we got approached, unsolicited. I was board chair at the time and had already named J.P. Hymel, a longtime employee, as CEO. My son August Gallo III was CFO. The three of us met with the firm, Citation Capital, in Dallas. Two weeks later, they made us an offer. My entire family endorsed it. It was too good to refuse.
So, eight months later, how is it working out?
Our company hasn’t changed. Leadership is still in place, and though I am no longer board chair, I have a seat on the board. They have added to our team, made us bigger and better, gotten us more work, but they haven’t changed the culture of the company.
What happens when Citation decides to sell, though?
When we sold, part of the deal said if they sell, they agree to set aside a substantial portion to go to the employees. It’s similar to what we did when we sold. We made a transaction bonus to every employee. I feel good about it.
What is the secret to working successfully with siblings and adult kids?
We have always gotten along, always been close and we all had different roles and responsibilities. We grew up in Gentilly, all grounded and hard-working. Our parents instilled those values in us and we are all still get along very well.
You are spending your retirement chairing the boards of Brother Martin High School, Magnolia Community, Boys & Girls Club of Metro New Orleans and recently helped Second Harvest food bank through the archdiocese bankruptcy, to name just a few. What motivates you to do what you do?
I’ve been very fortunate in my life and I’ve been very, very successful. I want to give back. I also know that I need activity.
