Many private equity firms are spending their dealmaking time building platforms up they have created. In many cases, they are in sectors that are not so obvious, such as fire and safety. This is where AE Industrial Partners has been spending time. AEI vice president Brian Hess breaks down why.
“The industry is characterized by a large OEM installed base with a sizeable aftermarket of recurring services,” Hess tells Mergers & Acquisitions. “These services are provided by a highly fragmented group of family and founder-owned operators who can benefit from shared back-end resources. The sector is also highly regulated, driven by stringent fire codes that differ across states and cities, creating higher barriers to entry. The sector’s characteristics present an attractive opportunity to consolidate key players in the market and create a leading national provider of fire and life safety services.”
AEI has a fire and safety platform called Altus Fire and Life Safety that was formed in May 2021 and owns six brands including: Cross-Fire & Security Co., Alarm & Suppression, NISCO, Adcock, Croker and FSI. AEI acquired FSI earlier this week. Hess says Altus has a large presence in the Northeast and Mid-Atlantic, but it is looking to expand in the Southeast and Midwest.
AEI is also looking for deals across its core sectors which consists of defense and government services, aerospace, industrials and power and utility services.
– Demitri Diakantonis
