climate controls

Pegasus Capital Advisors has completed the sale of Climatec, a provider of building automation and energy management services, to Robert Bosch North America Corporation (RBNA).  Pegasus acquired Climatec in April 2012.

Climatec, founded in 1975, is a provider of building automation, energy efficiency, security and life-safety services to the education, health care, office, hospitality, industrial, federal, state and local government sectors.  Climatec has approximately 670 employees and is headquartered in Phoenix with additional offices in Arizona, California, Nevada and Texas (www.climatec.com).

During the course of Pegasus’ ownership, Climatec completed and integrated two add-on acquisitions and also organically entered new markets.  Since Pegasus’ acquisition, Climatec’s top line revenues have increased by more than 50% and the employee base grew from 390 to 670.  “Pegasus identified building automation and energy services as an attractive sector that fit within our investment focus on resource scarcity and sustainability,” said Craig Cogut, Founder of Pegasus. “We are pleased with the outcome of this transaction and believe Climatec is well-positioned for continued expansion.”

Pegasus invests in middle market companies across a range of industries. The firm partners with management teams of growth companies, with a focus on those that benefit from the business implications of global resource scarcity. Sectors where this trend is most pronounced are food, water, energy, health & wellness and security. Pegasus currently manages approximately $2 billion in assets.  The firm was founded in 1996 and has offices in New York and Cos Cob, CT (www.pcalp.com).

“We were fortunate to have had the opportunity to partner with Climatec’s world class management team and to have achieved significant growth while working together to execute on our strategic plan,” said Eric Gribetz, Co-Managing Partner of Pegasus. “We wish Climatec well in its next chapter with Bosch.”

“Pegasus has been a great strategic partner and supporter to us at Climatec,” said Terry Keenen, President of Climatec. “Working with Pegasus and leveraging its resources has enabled us to better position Climatec for the future.”

Robert Bosch North America is a regional holding company of the Bosch Group, a global supplier of technology and services to the mobility, industrial technology, consumer goods, and building technology sectors. The company is based in the Detroit suburb of Farmington Hills (www.boschusa.com). The company’s parent, Robert Bosch GmbH, is headquartered in Stuttgart, Germany (www.bosch.com).

William Blair & Company was the advisor to Pegasus and Climatec on the transaction and Kirkland & Ellis provided legal counsel.

Bruckmann, Rosser, Sherrill & Co. (BRS) has sold its portfolio company Airxcel, a manufacturer of climate control products, to One Rock Capital Partners.  BRS acquired Airxcel in August 2005.

“BRS has been an excellent partner. For almost a decade, we have worked together to dramatically increase Airxcel’s profitability and improve its growth prospects and competitive position,” said Airxcel CEO Mel Adams.

Airxcel manufactures air-conditioners, heat-pumps, cooking appliances, furnaces, powered vents and water heaters. The company’s products are sold into various end-markets including recreation vehicles, school classrooms, multi-family living, industrial and commercial applications and telecommunication enclosures. Brand names include Coleman-Mach, Suburban, Maxxair and Marvair.  Airxcel has approximately 750 employees at three manufacturing locations in Kansas, Georgia and Tennessee and is headquartered in Wichita (www.airxcel.com).

“We are delighted with the outcome of our investment and we are proud of the profitable growth and market expansion achieved by Airxcel during our ownership,” said Nicholas Sheppard, a Managing Director of BRS.  “Through its dedication to superior products, customer service and manufacturing excellence, Airxcel established a leading position in the industry. Mel Adams and his entire team have done an exceptional job and we are confident Airxcel will continue to thrive in the years ahead.”

Bruckmann, Rosser, Sherrill & Co. invests in middle market consumer goods and services businesses and has $1.4 billion of committed capital under management.  Sectors of specific interest include consumer product, food and beverage, specialty retail, restaurants and specialty distribution.  Since 1996, BRS has purchased over 40 portfolio companies for aggregate consideration of more than $6.4 billion. In addition, BRS portfolio companies have completed approximately $1.9 billion of add-on acquisitions. The firm is based in New York (www.brs.com).

Airxcel’s management team, led by Mel Adams (CEO), Jeff Rutherford (COO) and Debi Jones (CFO), invested in the transaction alongside One Rock and will continue in their current roles.  “We look forward to building further upon the strong foundation for growth that Mel Adams and the rest of the Airxcel management team have constructed over the past several years,” said Tony Lee, Managing Partner of One Rock.

One Rock makes control investments of $10 million to $60 million in companies with potential for growth and operational improvement using an approach that utilizes the firm’s Operating Partners to identify, acquire and enhance businesses in select industries.  Sectors of interest include the chemicals and process industries; specialty manufacturing and healthcare products; business and environmental services; and automotive retail. One Rock also has a strategic relationship with Mitsubishi Corporation – the firm’s largest investor – which can provide strategic resources to One Rock and its portfolio companies.  One Rock was formed in 2010 by Tony Lee and Scott Spielvogel, both formerly Managing Directors at Ripplewood Holdings.  The firm is based in New York (www.onerockcapital.com).

“Going forward, the entire One Rock team is excited to be able to provide very relevant operating expertise in the specific categories of products that Airxcel manufactures,” said One Rock Managing Partner Scott Spielvogel.  “We expect this expertise to be a true value-added resource to help fuel Airxcel’s growth and enhanced profitability in the future.”

Senior financing for the transaction was led by GE Antares Capital and Citizens Financial Group. Mezzanine financing for the transaction was provided by Freedom 3 Capital (www.freedom3capital.com), Babson Capital Management (www.babsoncapital.com) and Yukon Partners (www.yukonpartners.com).

Airxcel and BRS were advised in the transaction by Piper Jaffray and Kirkland & Ellis.  Hogan Lovells acted as legal advisor to One Rock.

© 2014 PEPD • Private Equity’s Leading News Magazine • 11-19-14