Sun Sells Horizon to New Mountain

Sun Capital Partners has sold Horizon Group Holdings, a residential provider of plumbing, heating and air conditioning services, to New Mountain Capital.

Horizon provides a full range of residential services including heating and air conditioning repair, maintenance and tune-ups; plumbing and drain cleaning services; and trenchless sewer and water line inspection, repair and replacement. The company also sells and installs heating and cooling systems from a range of manufacturers including Lennox, Trane, Rheem, York, American Standard, and Carrier.

Horizon currently serves tens of thousands of homeowners in seven metropolitan areas throughout the eastern United States including Philadelphia, New York, Atlanta, Baltimore, Washington DC, Hartford, and Jacksonville. Horizon was founded in 1987 by CEO Dave Geiger and today has more than 900 service vehicles and 1,400 employees. The company is led by Mr. Geiger and President Charlie Haines and is headquartered near Wilmington in Newark, Delaware.

“New Mountain is the ideal partner for Horizon as we enter our next stage of growth,” said Mr. Geiger. “This is an exciting time in Horizon’s history, and we are confident that New Mountain’s proven track record of business building and supporting management teams with close strategic engagement is a real differentiator.” Mr. Geiger and other members of the company’s management team will remain invested in Horizon in partnership with New Mountain.

“We have long admired Dave’s leadership, entrepreneurship and success in growing the business over the years. We are excited to partner with Dave, Charlie, and the rest of their team,” said Mathew Lori, managing director at New Mountain Capital. “We look forward to providing additional resources to help the company realize its full potential across organic and acquisition-based strategic initiatives.”

Sun Capital acquired Horizon in March 2017 and during its ownership term, the company completed 10 add-on acquisitions that expanded its service territories into northern New Jersey, northern Virginia, Atlanta, and Florida. “Sun Capital has been an outstanding partner in Horizon’s growth,” said Mr. Geiger. “Their insight and support allowed our family of companies to expand with strength, adding ten brands and over 800 professionals to our team.”

In addition to the 10 add-on acquisitions, Sun and the Horizon management team completed several operating initiatives that bolstered Horizon’s service model, improving customer satisfaction and retention. “We also utilized a buy-and-build strategy, sharing uniform practices across multiple locally-operated businesses, leading to improved sales force efficiency and effectiveness, superior technician service, and a strong company culture,” said Steven Liff, a senior managing director at Sun Capital. “Today, Horizon is well-positioned to continue its growth.”

“After spending years analyzing the home services market, we identified Horizon as an industry-leading brand, operating model and team with a track record of high-quality customer service and strong, organic growth,” said Kyle Peterson, a director at New Mountain Capital. “We believe the partnership between New Mountain and Horizon will enable the company to further its leading position in the industry.”

New Mountain is an industry generalist and seeks to acquire just three or four companies each year, typically in the $100 million to $1 billion enterprise value range, and generally invests $100 million to $500 million per transaction. In September 2017, the firm held an oversubscribed hard cap close of its fifth private equity fund, New Mountain Partners V LP, with $6.1 billion of capital. New Mountain was founded in 1999 and is headquartered in New York.

Sun Capital invests in leveraged buyouts, equity, and debt in companies that can benefit from its in-house operating professionals and experience. The firm has invested in and managed more than 375 companies worldwide with combined sales in excess of $50 billion since its inception in 1995.

“Sun Capital excels in partnering with founder-operated companies and our past experience enabled a successful collaboration with Dave and his team to transform the company,” said Marc Leder, co-CEO of Sun Capital. “Horizon should be incredibly proud of the growth it has achieved as a result of these efforts.”

Sun Capital has offices in Boca Raton, Los Angeles and New York, and an affiliate office in London.

© 2019 Private Equity Professional | November 14, 2019

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