Snow Phipps Sells Kele to Stephens

The Stephens Group has acquired Kele, a distributor of products used in commercial building automation systems, from Snow Phipps Group.

Kele supplies control products including sensors, transmitters, switches, gauges and relays that are used in commercial and industrial buildings to detect and transmit information such as room temperature and humidity to building HVAC controllers.

Kele has more than 125,000 SKUs sourced from more than 300 suppliers, and also provides assembly, tagging and kitting, calibration and programming services. The company, led by CEO Richard Campbell, was founded in 1983 and is headquartered in Memphis.

“We are very excited to partner with The Stephens Group,” said Mr. Campbell. “Their unique combination of high caliber private equity capabilities paired with a flexible, permanent capital source makes them the right partner for our team as we look to continue executing on our strategy. Their team knows our industry and business model well and we look forward to tapping into their resources to help accelerate our growth both organically and via acquisitions.”

“We’ve been searching for the ideal platform to capitalize on long-term systemic trends toward automation in all areas and Kele is a well-recognized and critical supply partner to the fragmented building automation industry,” said Clay Hunter, a managing director at The Stephens Group. “We have tracked the business for over a decade and the opportunity arose to partner with this team as a result of this highly targeted approach.”

Snow Phipps acquired Kele in October 2015 from CHS Capital. During its ownership term, Snow Phipps completed three add-on acquisitions including the buys of Control Consultants, a Boston-based HVAC systems and controls distributor, in September 2017; MIControls, a Seattle-based automation controls distributor, in June 2018; and Temperature Control Systems, a Dallas-based distributor of HVAC controls and automation controls, in June 2019.

“Snow Phipps has been an incredible partner to Kele over the last several years,” said Mr. Campbell. “They have provided significant financial and operational assistance and support to help fuel our growth trajectory and vision, and we have greatly enjoyed our time working together.”

New York City-based Snow Phipps makes control investments in companies primarily located in North America with enterprise values ranging from $100 million to $500 million that require equity investments ranging from $50 million to $150 million. Sectors of interest include industrials, services, and consumer. The firm was co-founded by Ian Snow and Ogden Phipps in April 2005.

“We have greatly appreciated our partnership with Kele and thank the entire Kele team for their efforts during our ownership,” said John Pless, a partner at Snow Phipps.  “We are pleased with the growth we achieved, both organically and through add-on acquisitions, and wish the company all the best under its new ownership.”

Little Rock, Arkansas-based The Stephens Group is a family-office that makes both minority and control investments in public and privately held companies. Sectors of interest include industrial and commercial products and services, specialty distribution, technology infrastructure and tech-enabled services, B2B food and beverage, and consumer products.

“Kele is perfectly situated at the intersection of specialty distribution and engineered industrial products, two of the industry sectors we know best,” added Mr. Hunter. “CEO Richard Campbell and his team are top-notch and have built an impressive platform. We are looking forward to working together to execute on our shared vision to extend the leadership of this value-added, truly specialty distribution business.”

Houlihan Lokey was the financial advisor to Snow Phipps on this transaction.

© 2020 Private Equity Professional | February 26, 2020

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