Target Information

Sterling Investment Partners has officially acquired Verdantas, LLC, a prominent provider of integrated environmental science, engineering, and consulting services. The deal, announced on May 7, 2024, in Westport, Connecticut, comes as a proprietary transaction with Verdantas being sold by Round Table Capital Partners, a Miami-based lower middle market firm. Following the acquisition, management, employees, and RTC will retain significant equity interests in the company.

Headquartered in Tampa, Florida, Verdantas has established itself as a leader in the environmental sector, catering to diverse end markets including industrial, energy, government, water, transportation, real estate, and technology. The company is helmed by CEO Jesse Kropelnicki and a talented executive team, making significant strides in sustainable engineering and digital solutions since its inception in 2020. With a rapid expansion reflecting industry-leading growth, Verdantas has successfully acquired 18 companies, amassing a workforce of over 1,450 employees nationwide while promoting a people-centric culture that ensures impressive employee retention rates.

Industry Overview

The environmental consulting and engineering industry in the United States is experiencing notable growth driven by increasing government regulations and heightened public awareness regarding environmental sustainability. As industries transition towards sustainable practices, the demand for professional services that support environmental compliance and remediation efforts continues to rise.

In the state of Florida, the environmental services market has been bolstered by policy initiatives focusing on climate resiliency and resource conservation. This notably benefits companies like Verdantas that can provide integrated solutions, combining scientific expertise with advanced engineering to meet both regulatory standards and client needs.

Furthermore, the ongoing expansion in infrastructure spending at both federal and state levels is expected to further fuel growth in this industry. Companies within the environmental sector are positioned to play a crucial role in developing smart cities and sustainable infrastructure projects that align with modern ecological standards.

Overall, the industry is predicted to continue flourishing as organizations strive to minimize their environmental footprints and integrate sustainable practices into their operations. The emphasis on environmental, social, and governance (ESG) factors among investors will likely promote further investments in companies exceling in these areas.

Rationale Behind the Deal

The acquisition of Verdantas represents a strategic move for Sterling Investment Partners, aligning with their commitment to investing in businesses with strong competitive advantages and growth potential. Verdantas’ proven track record of success, underpinned by a robust operational framework, positions it for continued expansion within the thriving environmental consulting sector.

Furthermore, the partnership allows Sterling to leverage its extensive resources and operational expertise to support Verdantas in its next phase of growth. With access to Sterling’s network and strategic insights, Verdantas is poised to enhance its service offerings and expand its market reach.

Investor Information

Sterling Investment Partners is a distinguished private equity firm with over 30 years of experience in building and investing in successful middle-market companies. The firm focuses on value-added distribution and business services, targeting businesses with sustainable competitive advantages and significant opportunities for value creation.

Throughout its history, Sterling has completed in excess of 230 transactions, encompassing around $30 billion in aggregate value. With its dedicated team of experienced investment professionals, Sterling is well-equipped to guide Verdantas as it continues to innovate and grow in the environmental space.

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The acquisition of Verdantas by Sterling Investment Partners is a strategic and potentially lucrative investment that aligns with current market trends favoring environmental, social, and governance (ESG) initiatives. Verdantas' strong focus on a people-centric culture, coupled with its technological and engineering capabilities, ensures it meets the increasing demands of its industry effectively.

Furthermore, Verdantas' impressive growth trajectory, marked by substantial employee retention and continuous expansion, adds to its appeal as a sustainable investment opportunity. Sterling’s extensive experience adds value to the partnership, and its involvement is expected to enhance Verdantas' operational capabilities and market position.

Given the favorable industry outlook supported by governmental and societal trends toward sustainability, the deal presents numerous growth prospects. Thus, this acquisition could be seen as an astute investment that not only promises financial returns but also contributes positively to environmental concerns.

In conclusion, this deal represents a convergence of opportunity, expertise, and market alignment, suggesting that Sterling Investment Partners' investment in Verdantas is not only strategically sound but also timely given the prevailing market dynamics.

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