Blackstone, Goldman Sachs, Gryphon scoop up HVAC targets; plus PE firms bet on recycling

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Blackstone, Goldman Sachs, Gryphon scoop up HVAC targets; plus PE firms bet on recycling

Good morning dealmakers, it’s Obey Martin Manayiti with the US edition of the Wire from the New York newsroom.

One hotbed of deal activity I’ve tracked closely all year is HVAC services. Private equity firms of all sizes have been scooping up deals in this industry. Today, we’re featuring my analysis of about 80 deals to uncover trends powering this market. We’re opening today’s newsletter with what we learned from these deals.

And, in a deal announced this morning, Ember Infrastructure is investing in a company focused on metals recovery and recycling. This is a theme that many private equity investors are focusing on. I will highlight a couple of recent recycling-focused deals.

Heating and cooling

From the largest private equity players such as Blackstone to some lower mid-market players with just a few hundred million dollars of assets under management, the heating, ventilation and air conditioning market is opening investment opportunities to all.

I analyzed about 80 residential and commercial HVAC deals that we covered between 2022 and 2024 and learned that demographic shifts, warmer temperatures, an abundance of targets to implement roll-ups and supersized returns are among the factors attracting investors.

Upgrade to the premium version of the Wire to learn more about these trends, including examples of deals that realized above average returns.

Recycling

In a deal announced this morning, Ember Infrastructure is investing in Advanced Recycling Technologies (ART), to scale the company’s metals recovery and recycling platform.

ART designs, installs, owns, and operates distributed systems that are co-located with waste stream assets to recover and monetize incremental, high-value metals.

Premium subscribers to the Wire have access to more, including other PE backed recycling deals.

That’s it for me today. Let me also take this opportunity to wish you all a Happy Thanksgiving!

As always, I’d love to hear from you at obey.m@pei.group.

Craig McGlashan will bring you tomorrow’s Europe Wire, while John R Fischer will bring you the US edition.

Cheers,

Obey

Read the full Wire commentary on PE Hub ...

Also of note (may require subscriptions)

INVL Asset Management nears midpoint of increased €200m Sustainable Timberland and Farmland Fund II target. Managing partner Martynas Samulionis says some of the investors that became more cautious in the immediate aftermath of Russia’s 2022 invasion of Ukraine are slowly returning to Eastern European markets. (Agri Investor)

The former head of KKR’s Global Impact Fund in Europe, Stanislas de Joussineau, has joined forces with two impact VC investors to raise a growth equity fund. (New Private Markets)

In the latest edition of PEI Group's performance watch series, Private Equity International looks at how certain US upper mid-market vintages (2013-2015) have performed over the past decade.

Jeremy Smith, former co-head of Rede Partners’ impact team, has taken on a senior adviser position at Energy Impact Partners. Smith will continue to work with Rede while also advising his new firm, he tells New Private Markets.

They said it

“It is a relatively safe industry to participate in from a preservation of capital perspective, and if you can acquire strong local businesses and demonstrate the creation of enterprise value with strong leadership, there is tremendous upside.”

— Casey Schwartz, who co-leads Houlihan Lokey’s facility and residential services practice, regarding HVAC investments.