Gryphon Investors, a middle-market private equity firm announced that it has acquired Southern HVAC from MSouth Equity Partners, a private equity firm based in Atlanta with an office in Nashville.
Located in the Southeastern U.S., Midwestern U.S., and Texas, the Company is a leading provider of residential HVAC, plumbing, and electrical services across 15 brands. Southern HVAC's management team will remain with the Company and retain a meaningful equity stake. The financial terms of the transaction were not disclosed.
Operations and management
Southern HVAC represents Gryphon's second home services acquisition in the last 10 months. In December 2020, Gryphon acquired Right Time Heating & Air Conditioning ("Right Time"), the largest independent residential HVAC services provider in Canada.
Southern HVAC and Right Time will be owned by NAEHS (North American Essential Home Services) but will continue to operate independently, retaining their existing brand names and current management teams, while leveraging the combined scale and scope of the two businesses.
About Ian McKeen
Ian McKeen has become CEO of NAEHS and has over 25 years of experience in the home services industry
As part of the transaction, Ian McKeen has become CEO of NAEHS. Mr. McKeen, a dual U.S., and Canadian citizen has spent more than 25 years in the home services industry and previously served as President & COO of Service Experts, a provider of residential HVAC and plumbing services in the United States and Canada.
Mr. McKeen said, "The holding company structure will allow each company to share in best practices and benefit from scale advantages while maintaining the separate strategies and management teams that have driven their success to date.”
“I look forward to working with Southern HVAC CEO Bryan Benak and Right Time CEO Craig Goettler to continue building two of the best home services businesses in North America."
Collaborative opportunity
Mr. Benak added, "Residential HVAC, plumbing, and electrical services remains a highly fragmented industry, with demand growth being driven as consumers spend more time in their homes.”
“We aim to expand our position as the leading residential services provider across Texas, the Southeastern U.S., and the Midwestern U.S. with support from Gryphon, Ian, and Right Time."
Mr. Goettler noted, "We continue to enjoy our partnership with Gryphon and are excited about the opportunity to collaborate with the Southern HVAC management team."
Strategic decision
Acquisition of Southern HVAC represents a strategic fit for Gryphon's North American residential strategy"
Alex Earls, Gryphon Deal Partner, and Jeff Balagna, Gryphon Operating Partner, further added that "The acquisition of Southern HVAC represents an excellent strategic fit for Gryphon's North American residential services strategy and is highly complementary to Right Time, which has performed ahead of expectations since our investment this past December.”
“Common ownership of both of these companies by NAEHS should create significant value for stakeholders of both companies, and we are excited as part of this investment to support the organic and acquisition strategies of Southern HVAC and Right Time."
Value creation
Charles Stubbs, an MSouth Partner, said, "Bryan Benak and his team at Southern HVAC were critical to the value creation we experienced during our investment and in building one of the largest residential HVAC platforms in the South and Midwest through organic growth and a buy-and-build strategy. We were fortunate to partner with such an outstanding management team, and we look forward to watching their continued success."
DLA Piper was legal advisor to Southern HVAC and MSouth. Stephens Inc. and Moelis & Company acted as Gryphon's financial advisors, while Kirkland & Ellis served as legal advisors.
