PE Weekly: Tech-Enabled Business Services Leads Dealmaking Activity

Tech-enabled business services have remained a solid focus for middle-market dealmakers in recent years even as overall M&A volume remained muted. This week, the trend continues with investors targeting services across marketing, energy sustainability, fire suppression and more.

Platform Investments and Acquisitions

Littlejohn & Co. Acquires HVAC Business. Littlejohn & Co., a Connecticut-based private investment firm, announced it will acquire HVAC company United Air Temp, Air Conditioning and Heating (UAT). The company services residential homeowners across the Mid-Atlantic and Southeast regions. Littlejohn plans to grow the platform through strategic M&A and organic growth initiatives.

Solace Capital Backs Marketing Business Siprocal. Solace Capital Partners, a private equity firm focused on the middle market, has provided growth capital to Siprocal, a marketing and advertising platform. A press release said Siprocal, which operates throughout North America, Latin America and Brazil, formed last year following the merger of Digital Reef and Gamers Club.

Pacific Avenue Acquires Fire Suppression System Company Kidde-Fenwal. Following a ruling by the U.S. Bankruptcy Court for the District of Delaware, private equity firm Pacific Avenue Capital Partners announced it has been cleared to acquire Kidde-Fenwal. The company provides fire suppression systems and controls. Pacific Avenue specializes in corporate carve-outs and complex situations in the middle market.

Morgan Stanley Capital Partners Acquires Energy Sustainability Business. Morgan Stanley Capital Partners, the middle-market private equity team at Morgan Stanley Investment Management, announced this week its acquisition of Resource Innovations. The company provides advisory services and software to utilities, government and corporate clients with a focus on energy efficiency and sustainability.

Godspeed Backs Infrastructure Consulting & Engineering. Godspeed Capital Management, a lower middle-market private equity firm focused on the defense and government services, solutions and technology space, has provided a strategic investment in Infrastructure Consulting & Engineering. The company, which operates across the Southeastern U.S., provides transportation consulting and engineering services for public infrastructure projects.

Add-Ons

Harvest Partners’ Fortis Acquires MASA’s Print Division. Fortis Solutions Group, a provider of high-impact printed packaging solutions, has announced its acquisition of the printing division of MASA Corporation. Fortis, a portfolio company of Harvest Partners, will also acquire MASA’s Print Division facility in Alabama. MASA provides custom labels, packaging and equipment supplies for manufacturers and distributors of various consumer end markets.

Strategics

Home Depot Scoops Up Leonard Green and Berkshire Partners’ SRS Distribution. SRS Distribution, a build products distributor and portfolio company of Leonard Green & Partners and Berkshire Partners, will be acquired by The Home Depot, reports said this week. The transaction was inked for $18.25 billion, according to a press release. Berkshire first invested in SRS 11 years ago at a time when the company’s annual revenue was about $650 million. Today that figure is more than $10 billion.

Refresco Acquires VBC Bottling. Refresco, a beverage solutions provider for brands in Europe, North America and Australia, has acquired VBC Bottling Company. VBC is a family-owned manufacturer of beverages based in California. The investment expands Refresco’s operational footprint within the U.S., a press release noted.

Exits

Corbion Divests Emulsifiers Business to Kingswood Capital. Corbion, an ingredient solutions provider, has announced the sale of its emulsifiers business, according to a recent press release. Middle-market private equity firm Kingswood Capital Management has acquired the company for $362 million in a transaction that includes two manufacturing plants and about 175 employees.

Fundraising

Hildred Capital Raises $750 Million for Continuation Fund. Healthcare-focused private equity firm Hildred Capital announced the close of a multi-asset continuation fund with more than $750 million in capital commitments. Hildred Perennial Partners I will acquire consumer healthcare companies Hyland’s Naturals and Crown Laboratories. Lexington Partners led the fundraise.

Clarion Capital Raises $677 Million for Fourth fund. The private equity segment of investment manager Clarion Capital Partners announced this week the close of its fourth fund, raising $677 million in capital commitments. The firm had initially set a target of $600 million for Clarion Investors IV, which will look to partner in buyouts of lower middle-market companies. In addition to the new fund, the firm announced the promotion of David Ragins to President of Private Equity.

Insights

DealMAX on track to break PE and IB attendance record. DealMAX, the premier conference for middle-market M&A, is on-track to have the most Private Equity Investors and Investment Bankers registered to attend than ever before. More than 700 PE investors, more than 650 investment bankers and more than 100 strategic acquirers and operating partners have now registered. More than 13,000 meetings have already been scheduled for the event, with more than 2,000 active users in the pool. Click here to register now for DealMAX, April 29-May 1 at the ARIA in Las Vegas.

Middle Market Growth is produced by the Association for Corporate Growth. To learn more about the organization and how to become a member, visit www.acg.org.