PE Weekly: Industrials, Building and Construction Continue M&A Drive
Consumer sector M&A struggles, while new insights reflect shifting deal terms and exit strategies
This week’s M&A trends highlight dealmakers’ persistent focus on the industrials and building & construction markets, with the latest deals suggesting consumer-facing sectors continue to trail in M&A activity. Elsewhere, the latest news reflects shifts in dealmaker terms and exit strategies, with new insights on the rise of rollover equity as well as another continuation fund announced. Read the latest news and insights below.
Platform Investments and Acquisitions
Astra Capital Acquires Ally Building Solutions. Astra Capital Partners, a middle-market private equity firm, announced this week its investment in Ally Building Solutions, a provider and installer of interior finishes including flooring, cabinets and countertops. Ally also operates a network of design studios for homebuyers to select products for new homes.
Add-Ons
RF Investments’ MAX Surgical Announces Four Add-Ons. MAX Surgical Specialty Management, an oral surgery platform backed by RF Investment Partners, has announced four add-on acquisitions with the support of healthcare-focused private equity firm MedEquity partners. The acquisitions expand MAX Surgical’s footprint throughout the northeast, a press release said, adding that the investments mark eight add-on acquisitions for the platform so far.
White Wolf Capital’s DCCM Acquires Engineering, Land Surveying Business. DCCM, a construction management service provider and portfolio company of White Wolf Capital Group, announced its investment in Chastain Skillman, according to a press release. Chastain Skillman offers engineering and land surveying services across Florida, augmenting DCCM’s existing design and consulting service offering.
Solace Capital’s CST Industries Acquires Storage Tank Business. CST Industries, the largest storage tank manufacturer in the world and portfolio company of private investment firm Solace Capital Partners, has acquired Ostee Tank Solutions (OTS). A press release said OTS manufactures tank solutions including aluminum domes and covers. The investment will help CST expand its capacity and market share across the EMEA region, the announcement noted.
Strategics
Fundraise
Renovus Capital Closes $325 Million Continuation Fund. Renovus Capital Partners announced the close of a $325 million continuation fund to support the exit of four portfolio companies, according to a recent press release. In addition to supporting the four businesses, the fund allocates $60 million to fund strategic acquisitions for the companies. The four portfolio companies include Aretum, ClinicalMind, Lockstep Technology group and Phoenix East Aviation.
Ocean Avenue Capital Closes $600 Million Fund. Ocean Avenue Capital Partners, a private equity firm focused on the lower middle-market and special situations, announced the close of its fifth fund, Ocean Avenue. Fund V. The fund was oversubscribed and closed at its hard cap of $600 million.
Exits
CenterOak Exits SurfacePrep. Private equity firm CenterOak Partners announced its exit of portfolio company SurfacePrep this week. SurfacePrep, which distributes surface enhancement solutions including abrasives and ceramic materials, tripled in size while backed by CenterOak, according to a press release. Middle-market private equity firm Nautic Partners acquired the business.
The Sterling Group Exits Industrials Business Evergreen. Middle-market private equity firm The Sterling Group announced its completed sale of Evergreen North America Industrial Services in a recent press release. Evergreen provides environmental solutions to blue-chip industrial businesses in the energy, industrial and chemical sectors. Infrastructure service provider Quanta Services acquired the company.
Oaktree, Cornerstone Exit Avenga to KKCG. KKCG, a European investment firm, has completed its acquisition of end-to-end software engineering and consulting platform Avenga from its previous owners, Oaktree Capital Management and Cornerstone Investment Management. Avenga, based in Germany, will become a subsidiary of KKCG, complementing its software development company Qinshift.
Insights
Use of Rollover Equity on the Rise: Study. A new report from law firm Goodwin released this week reveals a steady rise in use of rollover equity in middle-market private equity transactions. Data reveals that the inclusion of rollover equity in acquisition agreements for transactions between $25 million and $500 million increased from 46% in 2020 to 57% in 2023.
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.
