Gryphon Investors buys majority stake in Southern HVAC

Written on: October 5, 2021 by ICM

Private equity firm Gryphon Investors has acquired Southern HVAC, Maitland, FL, from MSouth Equity Partners for an undisclosed sum, encompassing a majority investment.
Southern HVAC provides residential HVAC, plumbing and electrical services across 15 brands in the Southeastern U.S., Midwestern U.S. and Texas. Southern HVAC’s management team will remain with the company and retain a meaningful equity stake.
Southern HVAC is Gryphon’s second home services acquisition in the last year. In December 2020, Gryphon acquired Right Time Heating & Air Conditioning, a large independent residential HVAC services provider in Canada.
Southern HVAC will team with sister company Right Time under a common holding company called NAEHS (North American Essential Home Services), but will continue to operate independently, retaining their existing brand names and current management teams, while leveraging the combined scale and scope of the two businesses.
As part of the transaction, Ian McKeen has become CEO of NAEHS. Mr. McKeen, a dual U.S. and Canadian citizen, has spent more than 25 years in the home services industry and previously served as President & COO of Service Experts, a leading provider of residential HVAC and plumbing services in the United States and Canada.
Mr. McKeen said, “The holding company structure will allow each company to share in best practices and benefit from scale advantages, while maintaining the separate strategies and management teams that have driven their success to date. I look forward to working with Southern HVAC CEO Bryan Benak and Right Time CEO Craig Goettler to continue building two of the best home services businesses in North America.”
Mr. Benak added, “Residential HVAC, plumbing and electrical services remains a highly fragmented industry, with demand growth being driven as consumers spend more time in their homes. We aim to expand our position as the leading residential services provider across Texas, the Southeastern U.S., and Midwestern U.S. with support from Gryphon, Ian and Right Time.”
Mr. Goettler noted, “We continue to enjoy our partnership with Gryphon and are excited about the opportunity to collaborate with the Southern HVAC management team.”
Alex Earls, Gryphon Deal Partner, and Jeff Balagna, Gryphon Operating Partner, further added that “The acquisition of Southern HVAC represents an excellent strategic fit for Gryphon’s North American residential services strategy and is highly complementary to Right Time, which has performed ahead of expectations since our investment this past December. Common ownership of both of these companies by NAEHS should create significant value for stakeholders of both companies, and we are excited as part of this investment to support the organic and acquisition strategies of Southern HVAC and Right Time.”
DLA Piper was legal advisor to Southern HVAC and MSouth. Stephens Inc. and Moelis & Company acted as Gryphon’s financial advisors, while Kirkland & Ellis served as legal advisor.