MSCP Back Again in Environmental Services Sector

MSCP Back Again in Environmental Services Sector

MSCP’s buy of Apex follows the July 2021 acquisition of Alliance Technical Group from Align Capital Partners

Apex specializes in assessing, preventing, and curing environmental issues related to water, ground, facilities, and air quality.

SOURCE: Getty Images

Morgan Stanley Capital Partners (MSCP) has acquired Apex Companies, a provider of environmental consulting and engineering services, from Sentinel Capital Partners which will maintain a minority interest in the company post-closing. Sentinel first invested in Apex in November 2018.

Apex specializes in assessing, preventing, and curing environmental issues related to water, ground, facilities, and air quality. The company’s public and private sector customers are active in a range of end markets including energy, industrial, manufacturing, real estate, retail, and telecom.

Source: Apex Companies

Apex’s environmental compliance and risk services team includes more than 700 geologists, hydrogeologists, engineers, air quality specialists, environmental scientists, information management experts, industrial hygienists, and field technicians. The company, led by CEO Dave Fabianski, was founded in 1988 and is headquartered near Washington DC in Rockville, Maryland.

MSCP is partnering on this transaction with Mr. Fabianski, who will continue as CEO, and other members of the company’s management team.

“Partnering with MSCP provides us with a tremendous opportunity to access additional capabilities and resources that we believe will help us further enhance our value proposition and service offering,” said Mr. Fabianski. “Together with MSCP, we will accelerate our strategic growth pursuits in water, environmental, infrastructure, and ESG, while expanding our investment in Apex’s people, culture, and digital strategies. The outlook in our industry has never been better, and we are excited to partner with the MSCP team for our next chapter of growth.”

MSCP’s acquisition of Apex is the firm’s second investment in an environmental services company following the July 2021 acquisition of Alliance Technical Group (ATG) from Align Capital Partners. Alabama-based ATG provides source testing, emissions monitoring, and analytical services to industrial facilities for permitting and compliance in accordance with air-quality mandates from local, state and federal regulatory bodies. The company services customers’ facilities on a repeated basis, with the frequency determined by regulations for each industry. In December 2022, ATG closed the add-on acquisition of GBMc & Associates, an Arkansas-based environmental consulting firm.

“Apex’s solutions serve clients and communities across a broad range of environmental and infrastructure needs and seek to ensure that corporations, government agencies, and municipalities achieve and maintain regulatory compliance. In addition to being a highly respected provider of environmental services, Apex is also a leader in the attractive and high-growth stormwater compliance industry,” said Eric Kanter, a managing director and head of industrials at MSCP. “We believe the company’s record of expansion, both organically and through accretive M&A, has generated substantial momentum for continued growth. We are excited to partner with Dave and the Apex leadership team to drive continued success in Apex’s core service offerings and to pursue strategic M&A that adds additional geographic presence, service capabilities, and customer diversity.”

MSCP is the middle-market-focused private equity business of Morgan Stanley Investment Management which in turn is part of Morgan Stanley, a financial services firm providing investment banking, securities, wealth management, and investment management services. MSCP invests in North American-based companies that are active in the business services, consumer, healthcare and industrial markets.

Carlyle and Churchill Asset Management were the administrative agents, bookrunners, and arrangers on the financing to back MSCP’s buy of Apex.

© 2023 Private Equity Professional | February 2, 2023

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