Dealmakers are always searching for industries where they see more to create additional value. It seems like private equity firms are looking to HVAC services as a source of consistency and future growth.
Halmos Capital Partners and Trivest Partners have partnered with Thermal Concepts, a provider of maintenance, repair and installation services for commercial HVAC and building control systems across South Florida. Private equity interest in the industry is tied to its consistent and predictable revenue streams and the non-discretionary nature of HVAC repair services.
Halmos’ Daniel Adan explained, “The commercial HVAC industry is an attractive industry due to the required maintenance of systems to maintain integrity and longevity of the investment made in the original system. This creates predictable revenue for those companies best suited to service these HVAC systems. Additionally, even the best-maintained system has a useful life, and when required, the replacement of these HVAC systems is non-discretionary. If an air-conditioning system is not functioning in a school or hospital or hotel it becomes a critical need for the customer.”
Adan further explains that investors are recognizing the demand for critical services industries. He notes that competition among private equity firms investing in HVAC exists as a product of the importance of the value service industry firms provide to their clients.
Firms like Halmos and Trivest now look to expand upon their initial investments through M&A.