Target Information

Burton Plumbing Services, LLC ("Burton"), a portfolio company of ShoreView, has successfully acquired Holland Heating & Air Conditioning, Inc. and Mr. Holland’s Electric, Inc. (collectively known as "Mr. Holland’s"). This acquisition marks the third add-on for Burton in 2021, reflecting its strategic growth initiatives.

Mr. Holland’s specializes in providing residential HVAC, electrical, and duct cleaning services within the Milwaukee, WI metropolitan area. The addition of Mr. Holland’s enhances Burton’s service offerings and operational capabilities in an important market.

Industry Overview in the Target's Country

The HVAC and plumbing industry plays a vital role in maintaining comfort and safety in residential and commercial spaces across the United States. As energy efficiency regulations strengthen and the demand for sustainable solutions grows, HVAC companies are increasingly adapting to these changes to meet customer expectations.

In the Midwest, particularly in states like Wisconsin, there is a rising need for reliable HVAC services due to varying seasonal climates. Consequently, companies that provide comprehensive services, such as installation, maintenance, and emergency repair, are positioned favorably in the market.

Moreover, the ongoing trend towards home automation and energy-efficient products is pressuring HVAC businesses to innovate continuously. The integration of smart technology in HVAC systems is not just a competitive advantage but also a requirement to stay relevant in this industry.

Given the projected growth in construction and renovations post-pandemic, the demand for HVAC services is expected to remain robust, offering lucrative opportunities for companies that can effectively scale their operations.

The Rationale Behind the Deal

The acquisition of Mr. Holland’s aligns with Burton’s strategy to expand its geographic reach and enhance its service capabilities. By integrating Mr. Holland’s established operations in the Milwaukee area, Burton can leverage new customer relationships while scaling its workforce significantly.

This strategic move not only broadens Burton's market presence but also allows the company to benefit from economies of scale, optimizing its service fleet and technician availability across multiple states, which include Colorado, Nebraska, Iowa, and Wisconsin.

Investor Information

ShoreView, based in Minneapolis and founded in 2002, is a private equity firm that has successfully raised over $1.3 billion across four funds. The firm focuses on partnering with family- and entrepreneur-owned companies, embracing a variety of sectors such as engineered products, healthcare, and niche consumer goods.

ShoreView is known for its diverse transactional strategies, including acquisitions and recapitalizations in businesses generating revenues between $20 million and $300 million. This broad strategy enables ShoreView to nurture its portfolio companies for sustained growth and profitability.

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Investing in Burton through the acquisition of Mr. Holland’s appears to be a sound strategic move considering the current growth trajectory of the HVAC industry. The expanding service territory and operational scale will likely result in increased revenue potential for Burton.

The demand for HVAC services, particularly in the context of rising energy efficiency standards and smart home technology, signifies a favorable outlook for businesses within this sector. Burton’s increase in service capacity is likely to meet this demand effectively.

Moreover, ShoreView's commitment to supporting Burton in its pursuit of further add-on acquisitions underscores a proactive approach to growth through consolidation. Targeting candidates that fit within their geographic strategy can lead to further operational efficiencies and customer base expansion.

Overall, provided that Burton continues to adapt to market trends and consumer preferences, this investment could yield significant returns and enhance its competitive position in the HVAC industry.

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