Information on the Target

Infrastructure Services Group LLC (ISG) is a prominent provider of specialized water and wastewater infrastructure services in the New England and mid-Atlantic regions. Established by Juniper Capital Management in 2018, ISG was formed through the merger of Green Mountain Pipeline Services and Mr. Rehab Sewer System Rehabilitation. In a strategic expansion in 2021, ISG acquired Inland Waters, further solidifying its market position as one of the leading cured-in-place-pipe lining providers.

ISG offers a variety of services including pipeline and manhole inspection and cleaning, as well as maintenance and rehabilitation for both municipal and industrial clients. Utilizing trenchless technology solutions, ISG minimizes disruption to surrounding communities while effectively repairing essential infrastructure.

Industry Overview in the U.S.

The water and wastewater services industry in the United States is a vital sector, playing a crucial role in maintaining public health and environmental standards. With aging infrastructure, the demand for renewal and rehabilitation services is on the rise. This ongoing need is bolstered by municipal and industrial investments aimed at modernizing systems and improving efficiency.

Recent legislative measures have also emphasized infrastructure development, providing funding and incentive programs that support the growth of companies within this industry. As a result, businesses offering specialized services, like those provided by ISG, are poised for substantial growth in an increasingly competitive market.

Additionally, the integration of advanced technologies, such as smart water management and data analytics, is transforming the industry landscape. These innovations not only enhance operational efficiencies but also improve service delivery, aligning with the goals of municipalities and corporations seeking long-term sustainability.

Essentially, the North American market remains attractive for water and wastewater service providers, driven by favorable demographics, increasing environmental regulations, and the necessity for technological advancement.

The Rationale Behind the Deal

The sale of ISG to Azuria, a portfolio company of New Mountain Capital, underscores the strategic positioning and growth potential of ISG within the water and wastewater services industry. Juniper Capital Management recognized the value of ISG as it expanded its service offerings and operational capabilities, successfully navigating a competitive landscape.

This transaction allows Juniper to realize the fruits of their investments in ISG’s management team and operational systems while enabling ISG to continue its growth trajectory under New Mountain Capital’s guidance and resources.

Information about the Investor

Juniper Capital Management is a Dallas-based private equity firm that concentrates on smaller-scale manufacturing, industrial, business services, and residential services companies. They primarily invest in businesses with EBITDA under $8 million, a market segment often overlooked by larger institutional investors. Juniper strives to enhance value by applying its extensive operating experience to help businesses achieve their growth objectives.

Guided by a commitment to preserve the legacies of family- or founder-owned businesses, Juniper partners with management teams to implement replicable processes and data-driven systems that prepare these companies for scalable growth. The firm’s hands-on approach has built a reputation for fostering sustained success within the organizations it invests in.

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The sale of ISG presents a strong investment opportunity for New Mountain Capital, given the robust demand for water and wastewater infrastructure services. ISG’s established market presence and innovative service offerings position it well for future growth, making it a compelling addition to Azuria’s portfolio.

From Juniper's perspective, this transaction demonstrates a successful exit strategy, which reflects their proficiency in identifying and cultivating high-potential businesses. Juniper’s investments in ISG’s management and technology have fundamentally enhanced the company’s market standing, indicating a well-executed strategy that has delivered valuable returns.

Looking ahead, the continued emphasis on infrastructure maintenance and modern technology adoption in the water and wastewater sector strengthens the outlook for ISG. New Mountain Capital's resources and expertise can further amplify ISG’s growth potential, solidifying its role as a market leader.

Overall, the investment in ISG appears to be a prudent decision for both Juniper Capital Management and New Mountain Capital, highlighting the long-term value and growth trajectories present in the water and wastewater infrastructure domain.

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