Ridgemont Equity Partners has acquired Munch’s Supply, a distributor of heating, ventilation and air conditioning (HVAC) equipment, parts and supplies, from Rotunda Capital.
Munch’s Supply distributes heating and cooling supplies to dealers and contractors and has more than 10,000 SKUs from more than 100 HVAC equipment, parts and supplies manufacturers, including Trane, American Standard, Rheem and Mitsubishi.
The company, founded in 1956 by Willard Munch and led today by CEO Bob Munch (the founder’s grandson), has 27 branch locations in nine states and is headquartered southwest of Chicago in New Lenox, IL (www.munchsupply.com).
“Specialty distribution has been a cornerstone of Ridgemont’s Business and Industrial Services practice, and we have been focused on identifying opportunities within the HVAC 
sector for many years,” said Jack Purcell and Tim Dillon, both partners at Ridgemont, in a joint statement. “Munch’s is the only private equity-backed top 50 HVACR distribution platform in the country, which makes the company uniquely positioned to continue its growth trajectory through increased M&A and other initiatives that will enhance its presence in its existing markets and aid in the development of new markets.”
Rotunda Capital acquired a majority stake in Munch’s in March 2015. During Rotunda’s investment term, Munch’s tripled in revenues, completed four add-on acquisitions, and expanded from seven locations in one state to 27 locations in nine states.
“On the first day of our investment in Munch’s, we set a goal with the Munch’s leadership team to become the acquirer of choice in the HVAC distribution industry,” said Corey Whisner, a partner at Rotunda Capital. “With four acquisitions under their belt, I believe the Munch’s team has achieved that goal and is poised for future growth.” Just last month, Munch’s acquired Colorado-based Comfort Air, a distributor of Rheem furnaces; air conditioners; tankless, solar and standard water heaters; and geothermal systems to HVAC contractors in Colorado and 13 Wyoming counties.
“Rotunda was a true partner to Munch’s, providing valuable strategic insight while investing in people and resources to help us achieve our goals,” said Bob Munch, CEO of Munch’s Supply. “We are a significantly larger, stronger, and better organization because of our partnership with Rotunda.”
Rotunda Capital invests in businesses with enterprise values of $15 million to $100 million. Sectors of interest include logistics, value-added distribution, specialty finance, and business services. The firm was founded in 2009 and is headquartered in Bethesda, MD with an office in Evanston, IL (www.rotundacapital.com).
“We are pleased to announce our new partnership with Ridgemont and believe their experience building best-in-class national distributors is critical to successfully executing our future vision,” added Mr. Munch. “Further investment in our business will enable our leadership team to continue to expand our geographic footprint, deepen our parts and supplies offering and improve our technical capabilities to better serve our customers and supplier partners.”
Ridgemont focuses on middle market buyout and growth equity investments of $50 million to $250 million. The firm invests in the following sectors: business and industrial services, energy, healthcare, and technology and telecommunications. In December 2018, the firm held an oversubscribed final closing of Ridgemont Equity Partners III LP with $1.65 billion in commitments. Ridgemont is headquartered in Charlotte with an additional office in Dallas (www.ridgemontep.com).
Lincoln International (www.lincolninternational.com) was the financial advisor to Munch’s Supply. Baird (www.baird.com) and Livingstone (www.livingstonepartners.com) were the financial advisors to Ridgemont.
Financing for the transaction was led by incumbent lenders PNC Erieview Capital, Kayne Anderson Private Credit and JPMorgan, with additional support provided by AEA Private Debt, PineBridge Private Credit and Stellus Capital Management.
© 2019 Private Equity Professional | April 12, 2019
