Palladin invests in Southeast Mechanical to form HVAC platform

Written on: July 14, 2022 by ICM

Palladin Consumer Retail Partners, LLC has made a majority investment in Southeast Mechanical (SEM Holdings, LLC). Existing shareholders, including Colmont Group and management, will retain an ownership position in Southeast Mechanical and continue to assist Palladin in growth and acquisitions.

Terms of the investment, which were not disclosed, will provides capital and support for growth and acquisitions, according to a press release.

Southeast Mechanical currently consists of four primary HVAC operating companies in North Carolina:

  • Triangle Contractors,
  • Warren-Hay Mechanical Contractors (including Sheet Metal Duct Suppliers),
  • Airmakers Heating & Cooling and
  • Logan Heating & Air Conditioning.

Southeast Mechanical operates in and is focused on expanding in the southeast U.S. market through organic growth and acquisitions. Southeast Mechanical has more than 300 professionals and currently serves over 11,000 residential and commercial customers.

“The Palladin team brings a wealth of experience growing service businesses,” said Hugh Elks, President of Southeast Mechanical. “Their expertise and support will provide not only capital, but operational support that will be instrumental in helping Southeast Mechanical become a major regional and national HVAC platform. We look forward to working with Palladin during this next phase of growth.”

“We are excited to partner with Hugh, Keith Bagby, CFO, the entire Southeast Mechanical team, as well as Colmont Group, in the growth of this platform,” said Mark Schwartz, CEO of Palladin. “The companies within Southeast Mechanical are well-respected in the industry and in their region. They have built a strong reputation for quality and service, and we are confident that, with additional capital and operating assistance, we can work together to significantly expand Southeast Mechanical’s reach.”

“We have spent a long time researching the HVAC sector and identified Southeast Mechanical as the perfect anchor acquisition,” added Anders Petersen, Managing Director of Palladin. “The expertise of the Southeast Mechanical team, their commitment to employees and customer service, and the geographic area of the country in which the Company currently operates provide an excellent partnership and platform for expansion.”

Goldman Sachs provided debt financing for the transaction, as well as an unfunded acquisition line and revolving credit facility to support future growth.

Advisors to Palladin included Morgan Lewis & Bockius, LLP and Everett, Gaskins Hancock LLP for legal services, Crowe, LLP for accounting, Krauter & Company for insurance and benefits, and Retail Technology Group for information systems. The company was represented by Johnston, Allison & Hord, PA for legal services, and Miller McNeish & Beedlove for accounting.