Temp-Con Incorporated | RECAPITALIZATION
Centerfield Capital Partners and Caymus Equity recapitalized Frontier’s client
Temp-Con Inc. is a provider of commercial HVAC and Refrigeration Systems services and installation, actually the leading HVACR firm in its market region. Temp-Con had tripled in sales and profits during its recent six-year period through the successful expansion of its management and sales team, along with the Company’s growing reputation in the market for quality and service.
The owners of Temp-Con – all active members of the Company’s management team – sought to achieve a couple of strategic and personal objectives through a strategic transaction: seeking to obtain a percentage of liquidity for their ownership stakes, but also to retain a portion of equity ownership in order to continue to manage Temp-Con, grow the business, and participate in the reward from that continued growth.
Because of the management team’s desire to retain equity and remain in their management positions, Frontier directed a recapitalization process among only financial buyers (as opposed to including strategic buyers). Through a competitive-marketing process, Temp-Con ultimately obtained multiple competitive offers and was able to form a win-win partnership with well-heeled financial partners with proven track records. The objectives of the owners and the management team were achieved by the all-cash offer obtained for the ownership position, and the management team also retained a meaningful percentage of its ownership, along with their management positions. Moreover, the multiple achieved in the sale reached the high-end of the range of the market’s expected valuations.