Information on the Target

Hastings Equity Partners is proud to announce that its portfolio company, MKD Electric, has successfully acquired two companies, JSET Automated Technologies and D&L Electric. JSET, backed by Hastings since late 2023, specializes in providing data center services, including building automation systems, installation and repairs, as well as electronic engineering services for data centers. Based in Columbus, Ohio, JSET has established itself as a vital partner for many blue-chip clients in the Midwest and Mid-Atlantic regions.

D&L Electric, founded in 2003 and headquartered in Covington, Georgia, is a prominent electrical contractor that focuses on design-build electrical work and maintenance for large industrial distribution, logistics, and manufacturing facilities throughout the Southeastern United States. Over the years, D&L has garnered a reputation for excellence in servicing complex electrical needs for large-scale operations.

Industry Overview in the Target’s Specific Country

The electrical services market in the Southeastern United States has been experiencing significant growth, driven by the increase in construction activities and the expansion of data centers. With the rise of digital transformation across various sectors, the demand for efficient and reliable electrical services has surged, allowing companies like MKD Electric to capture greater market shares.

A major trend in the industry includes the integration of advanced technologies in electrical services, such as automation and smart building systems. This shift not only enhances operational efficiency but also helps in addressing energy consumption and sustainability concerns, thereby meeting regulatory requirements and improving overall customer satisfaction.

Additionally, the growing emphasis on renewable energy sources is propelling the electrical services sector toward innovative solutions, such as energy-efficient installations and smart grid technologies. This evolution opens up immense opportunities for market players to diversify their service offerings and strengthen their competitive positioning.

Furthermore, the electrical contracting sector is witnessing a consolidation trend, where established firms like MKD Electric are acquiring specialized companies to enhance their capabilities and geographic reach. This strategic consolidation helps firms optimize resources, scale operations, and deliver comprehensive solutions to their clientele.

The Rationale Behind the Deal

The acquisitions of JSET and D&L Electric align seamlessly with MKD Electric's strategic vision of expanding both organically and through acquisitions. This approach enhances MKD's exposure to the burgeoning data center services market and allows for improved geographic penetration across the Southeastern U.S. The integration of these companies will enable MKD to offer a broader range of services to its customers, positioning it as a leader in the non-union electrical contracting space.

The addition of JSET’s advanced data center capabilities and D&L’s esteemed electrical contracting services provides MKD with a significant competitive advantage in meeting the evolving demands of the industry, enabling the company to serve a diverse clientele more effectively.

Information About the Investor

Hastings Equity Partners is a well-regarded investment firm known for partnering with founders of lower middle market businesses. With a focus on helping companies enhance their growth trajectory, Hastings invests in businesses poised for expansion. Their commitment to supporting strategic initiatives has made them a preferred capital partner in the market.

Hastings' backing of MKD Electric illustrates their dedication to investing in promising firms that align with industry trends. Through their support, MKD Electric stands to leverage new growth opportunities and become a formidable competitor in the electrical services landscape.

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In evaluating the recent acquisitions of JSET Automated Technologies and D&L Electric by MKD Electric, it is my expert opinion that this move is strategically sound and well-timed. The alignment of these acquisitions with MKD’s growth strategies ensures enhanced service offerings and increased market presence, thereby fostering long-term sustainability and profitability.

The integration of JSET and D&L provides MKD with access to advanced technologies and a solid foundation in key markets, particularly in data center services and industrial electrical contracting. This diversification will help mitigate risks associated with economic fluctuations and competitive pressures in the electrical services sector.

Moreover, as the market continues to evolve towards digitization and automation, MKD's enhanced capabilities will position the company favorably against competitors who may not have adapted to these changes as quickly. By investing in firms that are well-versed in these emerging trends, MKD is securing its foothold in a rapidly modernizing industry.

Overall, I believe this acquisition represents a strong growth opportunity and could greatly enhance MKD Electric's competitive positioning, making it a potentially lucrative investment for Hastings Equity Partners and a valuable player in the electrical contracting space.

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