HVACR News for Informed Owners
Inside This Issue:
• Featured HVACR Transactions
• Exit Strategy Killer: The Blind Spot
Service Champions Group Doubles Down in Phoenix Metro; Acquires Howard Air and Scottsdale Air Heating & Cooling
BREA, Calif., Oct. 20, 2021 /PRNewswire/ -- Service Champions Group, a thriving U.S. Plumbing, Heating and Air Conditioning services business continues to grow its southwestern U.S. presence, announcing today that it has agreed to acquire both Howard Air and Scottsdale Air Heating & Cooling, two premium HVAC companies in the Phoenix Metropolitan area. Howard Air in Phoenix is a second generation, family-owned business serving the Valley of the Sun for over forty years, originally founded in 1977, by William Howard. In 1993, William Howard turned the business over to his son Kevin Howard who continued to grow the organization for nearly three decades. Scottsdale Air has been a Paradise Valley institution since 1947. Current owner, Michael Cross, began as an apprentice in 1986 and quickly worked his way to the top, becoming the owner in 1989. Both companies specialize in HVAC repairs, maintenance and installation with in-house engineers and automated fabrication shops that can design, fabricate, and install everything from the most basic to the most sophisticated solutions. Service Champions is a portfolio company of Odyssey Investment Partners.
"The Phoenix area is very important to us, and we are thrilled to be able to acquire two businesses that expand Service Champions position as a leading provider to more homes in a thriving southwestern marketplace," said Leland Smith, Founder and CEO of Service Champions. "Howard Air and Scottsdale Air are fantastic businesses in an attractive and growing market. The entire Howard family has worked tirelessly to build a business that is as well-known for its extensive capabilities as it is for the outstanding customer service it provides. Scottsdale Air, led by Michael Cross, delivers a genuine, heartfelt, honest and exemplary customer experience. For more than 70 years this company has perfected its processes and systems and takes tremendous pride in the highest level of service, safety and professionalism. These are two companies that demonstrate integrity and a strong commitment to ethics in all that they do," Smith continued. "It is with great pride that we announce partnerships that enable us to continue to grow our footprint in the southwest and carry on with the tradition of excellence set forward by both companies."
Right Time Group of Companies Acquires FurnaceGuys Home Heating & Cooling
ST. CATHARINES, ON, Oct. 18, 2021 /PRNewswire/ -- Right Time Group of Companies ("Right Time" or the "Company") is pleased to announce the acquisition of furnaceguys Home Heating & Cooling. Founded in 2008, furnaceguys provides residential heating, cooling, air quality, and hot water services to homeowners in the city of Saskatoon, Saskatchewan, and surrounding areas. Management and employees of furnaceguys will join the Right Time team and will benefit from Right Time's management and training capabilities. Terms of the transaction were not disclosed. Right Time is majority-owned by Gryphon Investors, a leading middle-market private equity firm.
furnaceguys is the tenth acquisition completed by Right Time and Gryphon Investors, and the first Saskatchewan-based acquisition. The Company's CEO, Craig Goettler, said, "Right Time is impressed with the business that owners Dennis McKee and his wife Kathleen Brannen have built. We look forward to continuing to deliver the high level of customer service that the furnaceguys brand is known for. furnaceguys will continue to remain a local company, committed to the community and people of Saskatoon."
Dover Announces The Sale Of Unified Brands
DOWNERS GROVE, Ill., Oct. 11, 2021 /PRNewswire/ -- Dover (NYSE: DOV) today announced that it has entered into a definitive agreement to sell its Unified Brands business ("Unified Brands"), which is part of Dover's Refrigeration & Food Equipment segment, to Electrolux Professional AB (STO: EPRO B) for approximately $244 million, on a cash free and debt free basis, subject to customary post-closing adjustments. Unified Brands designs, manufactures and markets professional cooking equipment for commercial food service operators and is expected to generate approximately $135 million in sales in 2021.
Commenting on the transaction, Dover's President and Chief Executive Officer, Richard J. Tobin, said, "Unified Brands has been a part of the Dover family for over fifty years. As we look to the future, we believe that this transaction is a good outcome for both Dover and Unified Brands. It will allow Dover to concentrate our time and capital on growing our core business platforms, while Unified Brands will benefit from Electrolux Professional's focus on the commercial foodservice market and its complementary customer base, product lines and channel partners."
Alpena Plumbing & HVAC Company Acquired
ALPENA, Mich. - Oct. 15, 2021 - PRLog -- Established in 1959 by Walter and Theresa Weinkauf, Weinkauf Plumbing & Heating (https://weinkaufph.com/) is a second-generation family plumbing and HVAC contractor located in Alpena, Michigan. Prior to the sale, the business was owned and operated by siblings Rob Weinkauf, Karen Lankheet, Alan Weinkauf, and Steve Weinkauf.
The four co-owners of Weinkauf Plumbing & Heating were approaching retirement age and wanted to ensure a successful and careful transition for the business, its dedicated employees, and loyal customers. They engaged Calder Capital (https://www.caldergr.com/) in 2020 in order to find its successor.
Daikin Applied Acquires Dynamic Controls Inc. to Deliver More Integrated, Connected and Sustainable Buildings
MINNEAPOLIS, Oct. 11, 2021 /PRNewswire/ -- Daikin Applied today announced the acquisition of Dynamic Controls, Inc., a St. Louis-based building systems integrator supporting the facility management, engineering and construction communities with locations across the Midwest and Rocky Mountains regions.
The move brings a new set of capabilities to Daikin Applied, a division of Daikin Industries, Ltd., the world's largest heating, ventilation and air-conditioning (HVAC) manufacturer. Daikin Applied has a legacy of designing and delivering innovative HVAC solutions that not only provide unmatched comfort, but address larger societal needs like improving air quality and cutting carbon emissions. Its offerings include equipment, services and controls for commercial and industrial facilities.
Controlled Environment Systems acquires JAX Cool a division of JAX Refrigeration; Expands capabilities and extends geographic reach for special environment structures
MANSFIELD, Mass., Oct. 6, 2021 /PRNewswire/ -- Controlled Environment Systems, LLC (CES) a market leader in design and construction of special environments such as cold storage facilities and metrology, pharmaceutical and biotech cleanrooms, today announced its acquisition of JAX Cool (JAX), (a division of JAX Refrigeration Inc.) a company that provides thermal envelope solutions and focuses on low-temp construction. Along with the acquisition of Western Environmental Controls in April 2021, JAX is CES' second acquisition this year.
CES significantly enhances its capabilities with the acquisition of JAX's experienced sales team/ project management team, IMP installation expertise and implementation resources. "CES is known for its trustworthy, reliable, value-creating, client-focused controlled environment solutions," said Don Roussinos, President and CEO of CES. "JAX delivers high-quality installation and will be an excellent fit within the Structures division of CES. The additional resources that JAX provides will help us more efficiently execute projects for our existing customers, while we at CES deliver more robust construction, systems, and calibration resources, supporting JAX's customer base. This aligns with CES's organizational vision to deliver industry leading solutions world-wide."
Service 1st Financial and Intelligent Mobile Support Announce Partnership to Bring Home Comfort-as-a-Service to Residential HVAC & Plumbing Contractors
BETHESDA, Md., Oct. 5, 2021 /PRNewswire/ -- Service 1st Financial, LLC ("Service 1st"), a disruptive financial technology company serving the residential home services contracting industry, and Intelligent Mobile Support, Inc. ("IMS"), the industry's leading provider of software tools to grow contractors' businesses, announced today an integration partnership.
The partnership will provide current and future IMS customers, including those utilizing its Sales Builder Pro platform, integrated access to Service 1st's Premier Program™, a worry-free service for homeowners to replace and upgrade their heating, cooling, and plumbing systems for a low monthly payment, while eliminating the common pain points associated with owning, maintaining, and repairing such systems.
Canadian firm acquires Cumberland County HVAC company
A Hampden Township company has been acquired by a Canadian company.
Ainsworth Inc., a subsiduary of GDI Integrated Facility Services Inc. acquired Enginuity on Sept. 1. Enginuity, which also has an office in Maryland, also provides heating, cooling, piping, mechanical, designing, building and other services to industrial and commercial customers. Enginuity has more than 125 employees.
“We are very excited about joining forces with Ainsworth as it represents the next step in Enginuity’s strategic evolution and will support our future growth,” Jim Mooney, president of Enginuity, said in a statement on the company’s website. “Enginuity will become Ainsworth’s business partner servicing the Pennsylvania and Maryland markets.”
Exit Strategy Killer: The Blind Spot
By Jay Carter, Founder and CEO, MarketView
Blind spots put your exit strategy at risk. Discovering and addressing them early can save a transaction and protect your future.
Every business owner has them. They’re nearly unavoidable. But when a business owner is preparing to sell their business, blind spots can be deal killers.
A business blind spot can be anything that puts the business at risk, diminishes its value, makes it unappealing to buyers, or otherwise restricts the owner from achieving their goals, and the owner is totally unaware of them. And, business blind spots can be devastating, especially when they are identified in the middle of an exit transaction.
A recent survey of business owners and M&A specialists reports that in more than 70% of all business acquisitions, at least one unexpected issue arises. We have seen these surprises cost business owners from 15% to 45% of the sale price.
For business owners planning to exit their business within the next 10 years, early detection of blind spots is one of the most effective ways to prevent a failed or disappointing exit transaction.
Common Business Blind Spots
Here are five common blind spots that the MarketView team has identified as common and avoidable.
Unrealistic Valuation Expectations: Many business owners begin the exit process with unrealistic valuation expectations. That’s understandable. Our clients have spent years, or even generations, building a business they are proud of. And when it’s time for an exit, those owners want the maximum valuation they can achieve. However, we counsel our clients to be pragmatic and realistic. Understand the true market value of the business before attempting to sell it.
Customer Concentration: Successful small businesses often grow to become successful larger businesses with just one or two great customers, but owners commonly underestimate how heavy customer concentrations turn off potential buyers, which can ultimately deeply discount the value of the business.
Inadequate Financial Reporting: Too many small and mid-sized businesses rely on inadequate accounting and financial reporting practices. Buyers prefer financial statements prepared in accordance with Generally Accepted Accounting Principles (“GAAP”). When a company’s practices are inconsistent with buyers’ expectations, red flags fly.
Poor Internal Communication Among Partners: It is imperative that when multiple owners exist, they take the time and clarify their intentions and reach an agreement on their objectives for a sale.
Cold Feet: Business owners get cold feet all the time. It is their business and they have the right to change their minds, but doing so can have lasting repercussions.
These are just five of the Blind Spots we see every day. They can be devastating to an owner who isn’t prepared. Fortunately, each of these Blind Spots can be avoided. MarketView specializes in helping business owners find their Blind Spots, and eliminating them, before pursuing a sale.
This Issue of the Exit Insider is Sponsored by MarketView.