Target Company Overview

Trivest Partners LP, a premier private equity firm dedicated to investing in founder-led and family-owned businesses, has successfully concluded the sale of Turnpoint Services Group to OMERS Private Equity. Based in Louisville, KY, Turnpoint offers an extensive array of plumbing, electrical, and HVAC installation and repair services. Established in 2016 following Trivest's initial investment in Dauenhauer Heating & Air, Turnpoint has seen extraordinary growth, completing 16 add-on acquisitions, increasing revenue nearly tenfold, and expanding its workforce from 160 to nearly 2,000 employees. The company currently operates in thirteen states across the Southeast and Midwest and is recognized as a Top-10 plumbing and HVAC service provider nationally.

Industry Overview in the United States

The residential services sector, particularly plumbing, HVAC, and electrical services, has emerged as a vital industry amidst evolving consumer demands and market conditions. In the U.S., the market has shown robust growth due to the increasing need for reliable home maintenance services and infrastructure upgrades. Moreover, the industry has been characterized by a fragmented landscape, presenting numerous opportunities for consolidation through strategic acquisitions.

The impact of the global pandemic highlighted the necessity for essential services, prompting heightened consumer reliance on home service providers. As homeowners prioritized maintenance and comfort, companies like Turnpoint thrived, positioning themselves as indispensable partners in enhancing home environments. With a focus on customer satisfaction and service excellence, businesses in this sector have been able to capture new market segments.

Considering the market dynamics, the United States' residential services industry is expected to continue its growth trajectory, driven by robust housing trends, increasing property values, and the aging housing stock requiring ongoing repairs and upgrades. The shift towards service-based economies further underscores the opportunities available for established and emerging players within this space.

Rationale Behind the Deal

The decision to sell Turnpoint to OMERS Private Equity aligns with Trivest's long-term investment strategy focused on creating value through consolidation and operational enhancements. Over the course of their four-year investment, Trivest's efforts to integrate and streamline Turnpoint's operations, along with a rebranding strategy that emphasized superior customer service, resulted in significant growth and a strong market position.

Trivest effectively utilized its “Path to 3x” value creation strategy, which involved optimizing management and ensuring financial stability through strategic acquisitions and enhanced organizational capabilities. This transaction not only reflects Trivest’s commitment to maximizing shareholder value but also provides Turnpoint with an opportunity to further capitalize on its growth potential under the stewardship of OMERS.

Investor Overview

OMERS, one of Canada’s largest defined benefit pension plans, founded in 1962, manages C$109 billion in net assets as of the end of 2019. Its private equity investment arm seeks to collaborate with management teams of industry-leading businesses, leveraging a substantial investment portfolio. This partnership with Turnpoint signifies OMERS' strategy to diversify its holdings and capitalize on the thriving residential services market.

OMERS' team of seasoned investment professionals, present in multiple international markets including London, New York, Singapore, and Toronto, is well-equipped to support the future growth of Turnpoint through enhanced capital and strategic guidance. This collaboration is poised to drive Turnpoint’s expansion and reinforce its position in the essential services sector.

View of Dealert

From an analytical perspective, the sale of Turnpoint Services Group appears to be a strategic and well-timed move for both Trivest and OMERS Private Equity. Trivest’s commitment to investing in foundational growth strategies has paid off, as evidenced by the impressive increase in Turnpoint's revenue and workforce over its ownership period. The successful integration of 16 acquisitions speaks volumes about the operational efficiency and scalability of Turnpoint’s business model, making it an attractive asset for acquisition.

For OMERS, this acquisition offers access to a robust and growing platform within the essential services market, characterized by high demand and repeat business. The sound operational foundation laid by Trivest indicates that Turnpoint has the potential for continued success, especially with the backing of OMERS' resources and industry expertise.

In conclusion, this transaction underscores the potential for growth in the residential services sector, particularly for companies that have demonstrated resilience during challenging market conditions. With the right leadership and strategy in place, Turnpoint is positioned to thrive and expand its reach, making this deal a beneficial endeavor for all parties involved.

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