Going Up? L Squared Sells Elevated to APi Group

Going Up? L Squared Sells Elevated to APi Group

The $570 million cash purchase price values Elevated at 12.9x 2024's forecasted EBITDA

Elevated Facility Services Group is a provider of contractually based and non-discretionary services including maintenance, repair, and modernization for all major brands of elevators, escalators, and related equipment.

SOURCE: Getty Images

L Squared Capital Partners has agreed to sell Elevated Facility Services to publicly traded APi Group for approximately $570 million in cash.

Elevated Facility Services Group (Elevated) is a provider of contractually based and non-discretionary services including maintenance, repair, and modernization for all major brands of elevators, escalators, and related equipment. Elevated was founded in 2004 and is headquartered in Tampa, Florida. L Squared formed Elevated in July 2021 to consolidate its investments in Oracle Elevator, Premier Elevator, and EMR Elevator.

L Squared acquired Oracle, a provider of elevator maintenance, repair, and modernization services, in May 2017 from Incline Equity Partners. At the time of its acquisition by L Squared, Tampa-headquartered Oracle operated 22 branch locations across 13 states and was one of the larger, independent, and non-union providers of elevator maintenance, repair, and modernization services. Today, Oracle operates in 58 markets across 22 states and is led by CEO Matt Biskaduros.

Source: Elevated Facility Services

During L Squared’s seven-year ownership term, Elevated experience strong organic growth and it completed 15 add-on acquisitions included the buys of Georgia-based Premier Elevator in November 2020, and Texas-based EMR Elevator in May 2021. As a result, Elevated’s net revenue grew from approximately $60 million in 2017 to a projected $220 million in 2024.

According to APi, Elevated is forecasted – based on a 20% Adjusted EBITDA margin – to have approximately $44 million of Adjusted EBITDA in 2024. Using the $570 million purchase price this equates to a 12.9x enterprise valuation multiple. A shareholder presentation of APi’s buy of Elevated can be accessed by following this LINK.

“I am grateful to the L Squared team for the substantial support and strategic resources they have provided over the years as we built Elevated into one of the largest and most respected independent elevator and escalator service providers in the country,” said Mr. Biskaduros. “We are excited to begin our next chapter of growth with APi, who is well positioned to provide us with the additional resources and scale necessary to accelerate our momentum and drive future success.”

APi Group (NYSE: APG) is a provider of safety and specialty services to commercial, industrial, distribution, manufacturing, education, healthcare, telecom, utilities, high tech, entertainment, government, and infrastructure markets. Headquartered near Minneapolis in New Brighton, Minnesota, APi went public in February 2021 and has approximately 29,000 employees and more than $6.9 billion in annual revenue.

APi’s safety services include design, installation, inspection, and maintenance of fire protection; heating, ventilation, and air conditioning; and entry systems. The company’s specialty services segment provides various infrastructure and specialized industrial plant services, including maintenance and repair of underground electric, gas, water, sewer, and telecommunications infrastructure.

The buy of Elevated complements APi’s existing capabilities in life safety, fire protection and security sectors and will provide APi with a platform from which to expand in the fragmented elevator and escalator services space.

Source: Elevated Facility Services

“We have long viewed the elevator and escalator service market as very attractive due to highly recurring nature of the business, driven by non-discretionary, statutorily driven demand,” said Russ Becker, APi’s president and chief executive officer. “We believe Elevated is the perfect opportunity for APi to expand into this adjacent and attractive market, creating a platform from which to execute our bolt-on M&A strategy. I believe our strength in operating a branch-led operating model makes APi the perfect owner for Elevated and businesses like it.”

“We are grateful for our highly successful partnership with Matt Biskaduros and the entire Elevated leadership team,” said Sean Barrette, a partner at L Squared. “Matt and the leadership team positioned Elevated for robust growth during our ownership period by providing a superior value proposition to customers and a leading culture that attracted top talent to join the team. We believe that APi and Elevated’s cultures align well and that APi will be an ideal long-term home for the Elevated team.”

Newport Beach, California-based L Squared invests from $50 million to $125 million of equity in North America-based companies that have revenues of $20 million to $125 million and EBITDA of $5 million to $30 million. Sectors of interest include tech-enabled services and software, education technology, and industrial technology and services.

L Squared is led by Robert Healy, Jeff Farrero, Sean Barrette, Randall Hunt and Adam Kimura, all of whom worked together at Chicago Growth Partners prior to founding L Squared in July 2014. In November 2023, L Squared held the final closing of its fourth fund with $840 million of capital. The firm’s earlier fund closed in September 2020 with $505 million of capital.

Piper Sandler & Co. was the financial advisor to both L Squared and Elevated on this transaction which is expected to close by the end of the second quarter.

© 2024 Private Equity Professional | April 19, 2024

To search in site, type your keyword and hit enter