utility services

CD&R Closes PowerTeam Buy

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Clayton, Dubilier & Rice (CD&R) has closed its buy of PowerTeam Services, a provider of maintenance and construction services to the utility industries, from Kelso & Company.

PowerTeam provides services to maintain, repair, upgrade, and install natural gas and electric distribution and transmission systems. The company’s customers include regulated utilities located in the southeastern and midwestern sections of the US. Approximately two-thirds of the company’s revenue is related to natural gas systems, and more than 70% of revenue is derived from distribution infrastructure. PowerTeam, headquartered in Cary, NC, has approximately 4,200 employees and 42 locations in 21 states with main operating offices located in Alabama, Georgia, Indiana, North Carolina, Texas, and Wisconsin (www.powerteamservices.com).

At closing of the transaction, Brian Palmer was named the new CEO of PowerTeam replacing Roxanne Bowman who has been the company’s CEO since 2013. Mr. Palmer joins the company after serving at General Electric for more than 30 years, most recently as the president and CEO of the Measurement & Controls division of GE Oil & Gas, a provider of asset performance, control, and protection services to energy and industrial infrastructure companies. During his tenure with this division, Mr. Palmer acquired and integrated 11 companies to create a global leader in the market with more than $4.5 billion in annual revenues.

“The growth opportunities in front of PowerTeam are very compelling,” said Mr. Palmer. “I am excited to join the 4,200 PowerTeam associates who work tirelessly every day to safely deliver top-notch service to our customers.”

“Brian is well-equipped, strategically and operationally, to drive accelerated growth and geographic expansion in PowerTeam’s business,” said John Krenicki, Chairman of PowerTeam, CD&R Operating Partner, and former Vice Chairman of General Electric and President and CEO of GE Energy. “We also thank Roxanne for her leadership and hard work to position the company for its next phase of growth.”

CD&R invests in European and US-based businesses.  Since founding in 1978, the firm has invested $26 billion in 81 companies across a range of industries with a total transaction value of approximately $100 billion. CD&R was founded in 1978 and is based in New York and London (www.cdr-inc.com).

Kelso & Company, which originally invested in PowerTeam in December 2012, is one of the oldest and most established firms specializing in private equity investing. Since 1980, Kelso has made investments in over 120 companies in a range of industry sectors. The firm is currently investing out of its ninth fund, Kelso Investment Associates IX, which closed in 2016 with $2.6 billion of capital. Kelso was founded in 1971 and is based in New York (www.kelso.com).

Middle-market investment bank Harris Williams (www.harriswilliams.com) was the financial advisor to PowerTeam and Kirkland & Ellis (www.kirkland.com) provided legal services to CD&R on this transaction.

© 2018 Private Equity Professional | October 2, 2018

CIVC Sells Peak to ORIX

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CIVC Partners has sold Peak Utility Services Group to ORIX Capital Partners. CIVC acquired Peak (previously Track Utilities) in June 2014.

Peak is a provider of utility services to the natural gas, telecom, and electric utility markets in the Pacific Northwest and Intermountain West regions of the United States. The company provides a suite of services for the recurring repair, replacement, maintenance, and installation of natural gas, aerial and underground telecom, and overhead and underground electric infrastructure.

Peak currently operates through three subsidiaries: Track Utilities, based in Meridian, ID, is a provider of electric and telecommunications infrastructure services; Sitewise Corporation, based in Wheat Ridge, CO, is a provider of maintenance and construction services for natural gas utility owners (Sitewise was acquired by Peak in April 2016); and Kelly Cable, based in Albuquerque, NM, provides aerial and underground construction services to telecom and electric utility owners in New Mexico (Kelly was acquired by Peak in July 2017). Collectively, the company has 22 locations and nearly 1,000 employees with a headquarters in Meridian, ID (www.peakusg.com).

During CIVC’s ownership term, Peak’s headcount increased from just over 200 employees in 2014 to nearly 1,000 at the time of the sale and EBITDA more than tripled in under four years. “The Peak management team has done an exceptional job creating a leading utility services platform with a strong track record of success,” said John Compall, a partner at CIVC. “It has been a pleasure working with them and we are excited to follow the continued growth of the platform.”

CIVC invests from $15 million to $85 million in companies that have at least $5 million of EBITDA.  Sectors of interest include business services and financial services. Since 1989, CIVC has invested $1.5 billion in 61 platform companies and is currently investing through its fifth fund, CIVC Partners Fund V LP, which closed at its hard cap of $400 million in May 2017. CIVC is headquartered in Chicago (www.civc.com).

“The CIVC team was instrumental in our ability to scale the Peak platform to where it is today,” said Lee Wilkerson, Senior Corporate Advisor and former CEO of Peak. “We relied heavily on their deep knowledge of the utility services industry.”

ORIX Capital Partners, the buyer of Peak, invests from $75 million to $200 million of equity per transaction in North America based middle-market companies that are active in the business services, infrastructure services and industrials sectors. New York-based ORIX Capital Partners is a business unit of ORIX USA, a Dallas-based financial services firm. Its parent company, ORIX Corporation, is a Tokyo-based, publicly owned financial services company with operations in 38 countries and regions worldwide (www.orixcapitalpartners.com).

Harris Williams & Co. (www.harriswilliams.com) was the financial adviser to Peak and Kirkland & Ellis (www.kirkland.com) provided legal services.

© 2018 Private Equity Professional | June 29, 2018

Partners Group Buys USIC from LGP

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Partners Group has agreed to acquire United States Infrastructure Corporation (USIC), a provider of underground utility locating services, from Leonard Green & Partners which acquired USIC in June 2013 from OMERS Private Equity.

USIC specializes in locating pipes and cables for utility customers across the US and Canada. The company employs more than 7,500 technicians and performs over 70 million utility locating services annually ahead of excavation or maintenance works. USIC currently serves around 1,000 customers in all major utility segments, including cable, telecommunications, electricity, gas, water and sewage. The company, led by CEO Rob Tullman, was founded in 2008 and is based in Indianapolis (www.usicinc.com).

Partners Group intends to grow USIC by building operations through investments in technology and data management, expanding service offerings in adjacent markets, and growing the company both organically and through add-on acquisitions.

“In the current investment environment, we are looking for stable businesses with resilient cash flows and strong growth prospects,” said David Layton, Partner and Head of Private Equity at Partners Group. “With its market-leading position, blue chip customer base, and exceptional management team, USIC encompasses all of these traits and has in fact been on our radar for several years due to its impressive track record of growth. We are therefore delighted to partner with Rob Tullman and the rest of the management team in this investment.”

Partners Group is a global investment management firm with over $66 billion of assets under management in private equity, private real estate, private infrastructure and private debt. The firm is headquartered in Zug, Switzerland, and has over 950 employees across 19 offices around the globe (www.partnersgroup.com).

“USIC is a great fit with our investment strategy,” said Juri Jenkner, Partner and Head of Private Infrastructure at Partners Group. “The company provides an essential service to US utilities, and has stable cash flows underpinned by a highly creditworthy customer base.”

Leonard Green, the seller of USIC, invests in middle-market companies in the retail, distribution, healthcare, aerospace/defense, and consumer/business services sectors. The firm will invest in a variety of situations including traditional buyouts, going-private transactions, recapitalizations, growth capital investments, corporate carve-outs, and public equity and debt. Leonard Green was founded in 1989 and is headquartered in Los Angeles (www.leonardgreen.com).

“We are proud to have been associated with the USIC team over several years of outstanding growth and we are tremendously grateful for the amazing job that CEO Rob Tullman and the rest of the USIC team have done,” said Tim Flynn, Partner at Leonard Green. “We look forward to seeing continued success for the entire USIC family supported by Partners Group, one of the leading firms in our business.”

Deutsche Bank and Harris Williams were the financial advisors to USIC, and KPMG was the financial advisor to Partners Group.

© 2017 Private Equity Professional | August 25, 2017

Kohlberg Acquires Osmose Utilities Services

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Osmose Utilities Services, a provider of engineering services to power utilities and telecommunications companies, has been acquired by Kohlberg and Company from Oaktree Capital Management. Oaktree first invested in Osmose in May 2012.

Under Kohlberg ownership, Osmose’s entire executive team will remain intact with the exception of outgoing President and CEO, Larry Larson, who announced his retirement earlier this year after a 35-year career with Osmose.  Ron Childress, the former Chief Operating Officer and a 29-year veteran of Osmose, has assumed the role of President and CEO.  “We are thrilled to team up with Kohlberg and look forward to the next phase of the company’s growth and development,” said Mr. Childress.

Osmose Utilities Services is a provider of structural integrity management services to power utilities and telecommunications providers across the transmission and distribution infrastructure grid.  Services include inspection, maintenance, life extension and rehabilitation.  Osmose also provides corrosion mitigation and engineered repairs for steel structures, and structural load analysis. The company was founded in 1934 and is headquartered in Atlanta with additional offices in Buffalo and Syracuse (www.osmose.com).

“We are delighted to have the opportunity to invest in the people of Osmose. We are impressed with Osmose’s track record of industry leadership and market innovation, and we look forward to partnering with Ron and his team in building on the success the company has achieved to date,” said Benjamin Mao, a Partner of Kohlberg.

Kohlberg & Company invests in companies in the industrial manufacturing; consumer products; business services; healthcare services; and financial services sectors. The firm concentrates on companies with EBITDAs between $20 million and $100 million where it can invest between $50 million and $200 million of equity. Kohlberg & Company is currently investing its seventh private equity fund, Kohlberg Investors VII. The firm was founded in 1987 and is based in Mt. Kisco, NY (www.kohlberg.com).

Committed debt financing for this transaction has been provided by Goldman, Sachs & Co. and RBC Capital Markets.  Harris Williams & Co. served as financial advisor and Kirkland & Ellis acted as legal counsel to Osmose. RBC Capital Markets served as financial advisor and Ropes & Gray was the legal counsel to Kohlberg in connection with the transaction.

© 2015 PEPD • Private Equity’s Leading News Magazine • 8-25-15

First Reserve Acquires Utilities Services Associates

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First Reserve has agreed to acquire Utility Services Associates (USA).  The executive management team will remain in place and will retain an equity interest in the company.

Utility Services Associates (USA) consists of C.W. Wright Construction Company, Booth & Associates, and Coastal Power & Electric. USA has over 60 years of experience in the electrical utility services industry and provides a range of maintenance, repair, rebuild and construction services for power transmission and distribution infrastructure across the Mid-Atlantic and Eastern regions of the United States.  USA also provides design, engineering and storm-related restoration services.  The company is based in Chester, VA (www.usaesop.com).

Upon closing of the transaction, Michael Lennon will join the USA management team. Prior to joining USA, Mr. Lennon was the President, CEO & Co-founder of InfrastruX Group where he grew the company to become a leader in the utility transmission and distribution services industry. While there, he executed a growth strategy which included 17 acquisitions.  “I am extremely excited about the prospect of working alongside the teams at USA and First Reserve to help USA take the next step in its development to become a national leader of utility industry solutions,” said Mr. Lennon.

According to First Reserve, USA is exposed to positive, long-term macro trends in the electric transmission and distribution services industry, where growth in electricity demand has outpaced expansion of the electrical grid’s capacity.  Aging infrastructure and historical under spending has also created a need for increased investment in the electrical grid.  As utilities continue to seek to outsource maintenance, repair and construction services to third-party providers in order to focus on their core operating activities, First Reserve believes Utility Services Associates is well-positioned to capitalize on these trends.

“First Reserve’s investment is an important milestone for our company.  As an employee-owned company since 1999, we’ve grown to become a leading provider of transmission and distribution services in the Mid-Atlantic and Eastern regions,” said Jay Spruill, CEO of USA.  “We believe that the business model and operating expertise that we’ve successfully developed combined with the strategic vision and additional growth capital from First Reserve and Michael Lennon’s experience building similar businesses in the past position us well for continued success in the space.”

First Reserve is a private equity firm with a focus on the energy industry.  The firm was founded in 1983 and has offices in Houston, TX; Greenwich, CT and London, UK (www.firstreserve.com).

“We are delighted to partner with the management team of USA and believe this platform is well-positioned for continued growth, both in terms of geography and service type,” said Jeff Quake, Managing Director of First Reserve.

© 2013 PEPD • Private Equity’s Leading News Magazine • 9-6-13

OMERS Exits United States Infrastructure

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OMERS Private Equity has agreed to sell United States Infrastructure Corporation, a provider of outsourced utility locating services, to Leonard Green & Partners. Committed debt financing has been provided by Deutsche Bank, General Electric Capital Corporation and RBC Capital Markets. The transaction is expected to close in the third quarter of 2013.

United States Infrastructure Corporation (USIC) is a provider of outsourced utility locating services with operations in 31 states and a small presence in Canada. USIC services over 42 million utility locates annually. The company is based in Indianapolis (www.usicinc.com).

OMERS Private Equity (OPE) acquired USIC in 2010, and supported the company’s acquisition of Consolidated Utility Services in 2011 and two smaller tuck-under acquisitions. Through these acquisitions and a recovery in construction activity in key US markets, USIC’s revenue has grown over 65% during OPE’s ownership.

“We are extremely proud of our affiliation with Mike Stayton, CEO of USIC, and his talented management team as we have worked together to create a true industry leader. OPE’s investment in USIC is a great example of our approach to working with strong management teams through a period of transformative growth to build industry leading platforms to generate strong returns. This is an excellent validation of the success of our direct investment program,” said Michael Graham, Senior Managing Director and Country Head US, for OPE.

“This transaction marks an exciting new chapter for the company. USIC has grown significantly in the past three years, and is now poised to take advantage of new growth opportunities with USIC’s outstanding customers. We appreciate the support and partnership OMERS Private Equity offered throughout the life of their investment and look forward to continuing to grow USIC with our new partner, Leonard Green,” said Mike Stayton, CEO of USIC.

OMERS Private Equity manages the private equity activities of OMERS, one of Canada’s largest pension funds. The group’s investment strategy includes the active ownership of businesses in North America and Europe. Sectors of interest include manufacturing, financial and business services, industrial and consumer products, transportation, and technology. Investment sizes range from $100 million to $500 million. The firm is located in Toronto with offices in New York and London and has $6 billion of investments under management (www.omerspe.com).

“USIC is the leader in the utility locating industry with strong brand equity, a proven business model and significant opportunities for growth,” said Timothy Flynn, Partner at Leonard Green. “We are excited to partner with USIC’s talented management team and look forward to supporting the next phase of the company’s growth.”

Leonard Green & Partners’ invests in middle-market companies with market-leading franchises and defensible competitive positions, attractive growth prospects and proven management teams. The firm’s investments are in the form of traditional buyouts, going-private transactions, recapitalizations, growth capital investments, corporate carve-outs and selective public equity and debt positions. Sectors of interest include retail, distribution, healthcare, aerospace/defense and consumer/business services. Leonard Green & Partners was founded in 1989 and has $15 billion of capital under management. The firm is located in Los Angeles (www.leonardgreen.com).

Harris Williams & Co. and Barclays Capital served as financial advisors to USIC. Deutsche Bank and RBC Capital Markets acted as financial advisors to Leonard Green in connection with the transaction.

© 2013 PEPD • Private Equity’s Leading News Magazine • 6-25-13