Private Equity Firms Put Money Into HVAC Companies

A lot of attention in proptech has been on companies that monitor and control HVAC systems. The reason is that owners spend a lot of money on cooling, heating, and ventilation, which is ripe for new ways to lower costs while reducing carbon footprints, for an ESG advantage.

But all this depends on the actual HVAC systems in buildings, that specialty software and hardware look to control. As the site PE Hub noted, a growing number of private equity companies have developed a taste for the industry. “The fast-growing HVAC business is increasingly regarded as a non-discretionary expenditure, the sector is highly fragmented, and its business model generates recurring revenues,” PE firms told the publication.

Those who install, repair, and modify HVAC systems are likely to be seen as good sources to suggest which of the more advanced systems are worth looking at. Ultimately, they could become major influences on the directions building owners take, affecting an important part of the proptech industry.

Here are some of the deals that have happened so far this year:

Graycliff Partners invested in Republic Electric Company, a “distributor of HVAC and electrical equipment and related components for use in residential, commercial, and industrial applications” that was founded in 1916, according to the firm. “The company supplies over 40,000 different products including residential and commercial HVAC systems, switch gear, controls, and lighting solutions, as well as related parts and tools. The company also provides logistical support, training, technical assistance, and other value-add services with a focus on customer service, delivery speed, reliability, and product availability.”

Alternative investment firm Investcorp took a majority investment in Shearer Supply, “one of the nation’s largest independent distributors of HVAC equipment, parts and supplies serving over 5,500 customers from 22 branches across Texas, Oklahoma, Arkansas, Tennessee and Louisiana.”

Lower middle-market private equity firm Huron Capital’s portfolio company Exigent Holdco, “a provider of mission-critical HVAC, plumbing, and other mechanical system repair, maintenance, and replacement services,” acquired JPG Plumbing & Mechanical Services Inc. and ThermaServe Inc. “JPG is a union plumbing and mechanical service company based in Jessup, Maryland, providing plumbing, mechanical, HVAC and industrial vacuum services to commercial, industrial, government and municipal customers in the Washington, D.C., Maryland, and Virginia area (“the DMV”). ThermaServe is a union mechanical service company based in Jacksonville, Florida, focused on repair, retrofit and maintenance of chillers and other HVAC systems to customers in Northern Florida and Southern Georgia.”

Another lower middle-market PE firm, Sound Partners, acquired Marathon HVAC Service, “a leading residential HVAC company based in Los Angeles, CA. This marks Sound Partners’ second platform in the HVAC space, following the acquisition of Tradewinds Mechanical, LLC, a leader in commercial HVAC-R in Las Vegas, NV.”

Service Champions Group, a “platform provider of Plumbing, Heating & Air Conditioning services announced today that it has finalized an agreement to acquire Fetch-A-Tech Plumbing Heating Air, a revered Las Vegas Valley mainstay serving a broad base of over 70,000 customers.”

Growth-oriented PE firm Trinity Hunt Partners made a majority investment in Alliance Group, “a leading provider of commercial heating, ventilation, and air conditioning (HVAC) system services.”