Target Information

NASHVILLE, TN – September 18, 2025 – LFM Capital, a private equity firm specializing in investments in lower middle market manufacturing and industrial services companies, has announced a strategic partnership with ZTZ Services International, LLC ("ZTZ Services" or "ZTZ") to establish a new platform aimed at enhancing electric grid reliability solutions across North America. This investment also includes CP Energy Holdings ("CPEH"), a dedicated private investment firm focused on the energy and industrial sectors, which has joined LFM as a minority investor. The acquisition marks the eleventh platform company in LFM’s third fund.

Founded in 1997, ZTZ Services is recognized for providing online transformer monitoring solutions that continuously evaluate the health of high-voltage transformers in power generation plants, transmission, and distribution substations. The company offers an extensive range of advanced solutions, including online transformer monitoring, dissolved-gas analysis (DGA), diagnostics, analytics tools, as well as remote support and turnkey installation services. Headquartered in North Miami, Florida, ZTZ has built a solid reputation for quality and reliability.

Industry Overview

The electric grid sector in the United States is facing unprecedented challenges as infrastructure ages and energy demands increase. As utilities strive to modernize their systems to accommodate renewable energy sources, the importance of reliability and maintenance becomes paramount. Industry experts predict significant growth in the demand for innovative solutions that ensure the grid can handle environmental fluctuations while maintaining consistent service.

With a growing emphasis on regulatory compliance and safety, the demand for advanced monitoring technologies like those provided by ZTZ is expected to surge. Utilities and industrial customers alike are increasingly prioritizing maintenance strategies that reduce unplanned outages and avoid catastrophic failures. This trend is being accelerated by the need to enhance the lifespan of assets and improve overall service reliability.

Moreover, the current workforce is aging, further complicating the maintenance of critical infrastructure. As operators look to adopt more innovative tools and automated systems, the integration of sophisticated diagnostic technologies becomes crucial to mitigate risks associated with human error and system failures.

As regulations around energy efficiency tighten, investment in reliable monitoring solutions is no longer optional; it has become essential for companies aiming to ensure compliance while enhancing operational efficiency.

Rationale Behind the Deal

The partnership between LFM Capital, ZTZ Services, and CPEH is driven by the urgent need for enhancing the reliability of electric grid systems amid a backdrop of aging infrastructure and rising energy demands. With ZTZ’s innovative technology, the joint platform aims to establish a robust foundation that leverages advanced monitoring solutions and maintenance practices to serve the burgeoning North American market.

LFM's expertise in lower middle market investments complements ZTZ's established capabilities in transformer monitoring, creating a synergistic relationship that is poised to capture significant market share in the utility sector. By combining resources and knowledge, the new platform could deliver critical services that improve grid reliability and meet the evolving compliance demands faced by utilities.

Investor Information

LFM Capital is a Nashville-based private equity firm known for its strategic investments in lower middle market manufacturing and industrial services sectors. Led by a team of seasoned executives and investment professionals, LFM focuses on companies with a minimum of $3 million in EBITDA and enterprise values ranging between $15 million to $125 million. The firm's mission is to foster operational excellence and facilitate targeted growth, making them an ideal partner for ventures like the one with ZTZ.

CP Energy Holdings, founded in 2024, is committed to investing in energy and industrial businesses that promote decarbonization and reliability. With a proven track record in building and exiting market-leading businesses, CPEH brings valuable market expertise to the partnership, ensuring that the combined platform can effectively address pressing industry challenges.

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From an investment perspective, the partnership between LFM Capital, ZTZ Services, and CPEH appears promising due to the growing necessity for reliable electric grid solutions. The firm's positioning within a rapidly evolving industry indicates strong potential for growth, as technology adoption continues to increase among utilities grappling with aging infrastructure.

The emphasis on innovative monitoring solutions directly correlates with industry trends highlighting the need for enhanced operational efficiency and compliance. ZTZ’s established reputation and technical capabilities strengthen the combined platform’s competitive edge, providing a unique offering in a market with substantial demand for reliability solutions.

Given the sustained push toward modernization in the energy sector, investors can be optimistic about the long-term viability of this partnership. The strategic collaboration leverages complementary strengths and addresses current pain points within the industry, presenting a compelling investment opportunity.

Ultimately, as energy demands rise and regulations tighten, the new platform is positioned to play a critical role in ensuring grid reliability, which is paramount for both utility providers and consumers alike. Thus, investing in this venture could yield significant returns as its solutions become increasingly vital for maintaining electrical infrastructure stability.

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