2021 Year in Review

Over the course of the year, our deal teams successfully completed 41 transactions that included 27 add-on acquisitions, eight exits, and six new platform companies. All three of those achievements set new high-water marks for our firm.

Exit Spotlights:

Exits demonstrate the strength of our Execfactor strategy

The power of our proprietary ExecFactor strategy is on full display in the growth stories and exits of High Street Insurance Partners (“HSIP”) to Abry Partners, XLerate Group to Brightstar Capital, and Sciens Building Solutions (“Sciens”) to funds managed by global investment firm, The Carlyle Group (“Carlyle”).

HSIP was established in 2018 in partnership with seasoned industry executive Scott Wick to capatalize on increasing regulation, technology, proliferation and demographic trends by pursuing a buy-and-build in the insurance agency sector. Its vision was to build the acquirer of choice for dynamic growth-oriented agencies based in small and midsize towns across America. HSIP completed 24 acquisitions in less than three years while growing revenue and EBITDA by more than ten-fold and cementing its ranking among the top 100 largest insurance agencies in the United States based on revenue.

Our journey with XLerate began in 2014 when we partnered with seasoned industry veteran, Cam Hitchcock, to pursue a buy-and-build strategy in the used car auction industry with a vision of becoming the clear acquirer and partner of choice for founder-owned auto auctions. During our investment, XLerate completed 11 add-on acquisitions, expanding its geographic footprint from 6, mostly Southern states, to 12 states located through the South, Midwest, and Northeast resulting in a three-fold increase in revenue and a 4-fold increase in EBITDA. At the time of the exit, XLerate had transformed from a traditional, on-site, wholesale auto auction business into a multi-site, multi-platform, tech-enabled leader, and the nation’s 4th largest and fast-growing full service used-car auction.

Sciens was formed in 2015 in collaboration with industry veteran Terry Heath, and together we authored a white paper on the fire and life safety (“FLS”) industry. The company was created to capitalize on the growing importance of increasing regulatory requirements and demographic shifts tied to urbanization. Sciens acquired 13 companies as its revenue and EBITDA increased over 35-fold during a five-year period and is poised for future growth under Carlyle’s ownership. Additionally, our Managing Partner, Jim Mahoney, will retain his position on the Board of Directors.

Notable New Platforms

Sector-focused strategy

In December 2021, we announced the acquisition of TriStruX, the latest example of our continued commitment to a sector-focused strategy aimed at identifying secularly-relevant industries ripe for consolidation.

Based in Clifton, New Jersey, and employing over 250 people, TriStruX is a leading provider of telecom infrastructure services including wireless, wireline, fiber, and maintenance services to wireless carriers, cable companies and OEMs. TriStruX operates across the Northeast, Southeast, Midwest, and California and has plans to open four new markets in 2022. Huron Managing Partner, Jim Mahoney, along with industry veteran Gene Callahan, have joined the company’s Board of Directors and look forward to working with CEO Randall P Muench.

Our growth strategy will focus on expanding into growing population-dense markets and adding professional service capabilities such as site acquisitions, design & engineering, and fiber splicing. We aim to do this organically and through acquisition with the goal of building one of the premier telecom service providers in the country.

Co-investment provides additional capacity for buy-and-build

In January 2021, we announced the creation of a new infrastructure services platform via the recapitalization of Arizona-based Sunland Asphalt & Construction (“Sunland”). Sunland is a market leading, vertically integrated provider of asphalt and paving services for public and private infrastructure maintenance and development serving the rapidly growing Southwestern United States.

Less than six weeks later, we announced that Sunland had acquired Ace Asphalt (“Ace”), also based in Arizona. The acquisition expanded Sunland’s geographic presence from four states to six states, solidified its market leadership in the Southwest, and increased EBITDA by nearly 30%.

To support the combination and invest in future growth, we completed an equity recapitalization that included a co-investment from our limited partners. We believe Sunland is poised for continued growth in new and existing markets by developing commercial and government customer relationships and accelerating expansion through an ongoing M&A strategy.

We remain open to future co-investment opportunities supporting new and existing portfolio companies experiencing rapid growth like Sunland.

Notable Add-On Activity

Buy-and-build strategy shines in Sunbelt

One of the hottest areas within facility services is the commercial HVAC services industry. Consolidation in this industry has been occurring at a rapid pace and we expect that trend to continue.

Last year, our commercial HVAC and plumbing installation, retrofit and repair services platform, Pueblo Mechanical & Controls (“Pueblo”), completed four add-on acquisitions and expanded into two new states – Texas and Utah. Pueblo acquired Infinity Contractors in Fort Worth, Texas, Central Air & Heating Service Inc. in Harlingen, Texas, Pinnacle Plumbing Contractors in Peoria, Arizona, and Rocky Mountain Mechanical in South Salt Lake, Utah.

Overall, Pueblo has completed a total of nine acquisitions in five years and we continue to actively pursue additional opportunities.

Let’s Talk

Think you might have a platform opportunity for our Flagship Equity strategy or perhaps you have an add-on idea for an existing portfolio company?

Please contact Heather Madland or Rich Grajewski.