PE Weekly: Healthcare, Energy Lead Middle-Market Dealmaking

Middle-market M&A reaches across a variety of markets this week, from healthcare to industrials, energy to marketing. Plus, exit activity picks up as portfolio companies change hands between private equity firms. Explore the latest dealmaking activity below.

Platform Investments

Pelican Energy Invests in Nuclear Energy AI Software Developer. Pelican Energy Partners, an energy-focused small and midmarket private equity firm, has announced its investment in Blu Wave AI Labs. Based in Indiana, the company develops AI-based Software-as-a-Service for the nuclear energy industry, targeting cost and fuel use optimization by monitoring plant operations and predicting component failure. In a statement, Blue Wave executive vice president Tom Gruenwald said Pelican “had the most insightful thesis about the growth forces driving nuclear.”

Compass Group Acquires Bridge Inspection Truck Manufacturer. Compass Group Equity Partners, a lower-middle market private equity firm, announced its acquisition of Anderson UnderBridge. The company is a manufacturer and rental operator of trailers and trucks used in the inspection and maintenance of bridge infrastructure. In its announcement, Compass Group noted the investment is its first step to forming a full-service critical infrastructure platform.

NewSpring Holdings Acquires underdog venture team: NewSpring Holdings, the majority investment strategy of NewSpring, has announced its acquisition of underdog venture team in a deal that creates a sports and entertainment marketing organization. According to a press release, the investment will create the underdog & company marketing platform. The investment is NewSpring Holdings’ first investment in the sports sector, the announcement noted.

Comvest Partners Acquires Your Behavioral Health. Comvest Partners, a middle-market private investment firm, has acquired California-based behavioral health platform Your Behavioral Health. A press release said the investment marks the thirteenth healthcare services platform investment from Comvest’s private equity strategy.

Add-Ons

Broadtree Partners Adds to Government Contractor Platform with Acquisition. Broadtree Partners, a middle-market private equity firm targeting the aerospace, defense, intelligence and federal civilian government services spaces, has added to its government contractor (GovCon) platform with its latest acquisition. The firm has acquired Joint Research and Development (JRAD), which provides test and evaluation services, public health preparedness and other services to government clients. The investment marks the second company joining the GovCon platform, first formed with the acquisition of Sayres Defense.

Riverside’s UnisLink Acquires Healthcare RCM Company. Healthcare revenue cycle management company Healthcare Support Technologies (HST) has been acquired by UnisLink, a portfolio company of private equity firm Riverside Partners. The investment strengthens UnisLink’s position in the revenue cycle management industry, expanding its geographic reach and presence in new specialties including behavioral health.

Trinity Hunt Adds REQ to Marketing Platform. Private equity firm Trinity Hunt Partners, based in Dallas, has acquired Washington, D.C.-based REQ, a digital marketing and advertising business. The company now joins existing portfolio companies Exclusive Concepts and Highnoon, which Trinity Hunt has merged into a platform that it plans to grow through additional acquisitions. Trinity Hunt principal George Morgan said the firm was impressed by REQ’s previous track record of successful M&A.

Gryphon Investors’ Right Time Acquires Home Heating Business. Right Time Group of Businesses, backed by middle-market private equity firm Gryphon Investors, has acquired Nova Scotia based Shines Energy Incorporated. Canada-based Right Time is expanding its home services offering with the acquisition, which expands its residential heating, cooling and air quality capabilities. The investment is the 19^th add-on acquisition completed by Right Time.

Thompson Street’s BCM Acquires Voice Services Company. Thompson Street Capital Partners, a St. Louis-based private equity firm, has announced that portfolio company BCM One, a managed solutions provider, acquired Pure IP, a cloud-based voiced services provider. Based in London with additional operations in New Zealand and the U.S., Pure IP expands BCM One’s existing communications capabilities servicing its global business client base. The investment is the ninth add-on acquisition for BCM One.

Exits

Staple Street Exits Mid States Supply to Ilion Capital. Staple Street Capital, a middle-market private equity firm, has announced the completed sale of valve and pipe distributor Mid States Supply to Ilion Capital Partners, an industrials-focused private equity firm. Based in Kansas City, Mid States was first acquired by Staple Street in 2016. Now with Ilion Capital, Mid States says it plans to “capitalize on the significant growth opportunities” within the market, a press release said.

Gemspring’s Zavation Acquires Spinal Implant Business. Zavation Medical Products, which designs and manufactures spinal implants and other biologics products, has acquired CoreLink, which similarly provides spinal implants and instrumentation systems. Zavation is a portfolio company of middle-market private equity firm Gemspring Capital, while CoreLink was a portfolio company of PE firm The Stephens Group, which will retain a minority stake in the combined entity.

ArcLight’s Generation Bridge Exits Energy Business to Hull Street. Hull Street Energy, an energy-focused private equity firm, has acquired Sunrise Power Holdings, which operates a natural gas-fired power plant in California. Sunrise was previously owned by Generation Bridge Acquisition, a portfolio company of ArcLight Capital Partners. With the addition of Sunrise, Hull Street affiliates now own 2.3 gigawatts of energy generation capacity in the U.S., a press release said.

Fundraising

Insights

Audax Private Debt Lands on iCapital Marketplace. Audax Private Debt, a private lender for middle-market private equity sponsors, has announced that it has joined the iCapital Marketplace, launched by iCapital in June to connect financial advisors and their clients with alternative investment options. The marketplace is a digital-first platform to access a variety of alternative investments, easing accessibility for wealth managers and their clients. In a statement, Audax Private Debt head of senior debt Mike McGonigle said, “The iCapital partnership … underscores our collaborative approach to provide investors access to the middle market.”

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.