Cortec Group, a New York-based PE firm, has bought a majority interest in Franklin Energy Services through its Cortec Group Fund IV. The deal was struck in partnership with Franklin management. Franklin was founded in 1994, and works on energy efficiency programs for utilities and government agencies. The details of the deal were not disclosed.
Cortec Group (“Cortec”), a New York based private equity firm which invests in middle-market manufacturing, distribution, healthcare and proprietary services businesses, announced that on October 7, 2010 its affiliate, Cortec Group Fund IV, L.P. (“Cortec Fund IV”), in partnership with management, acquired a majority interest in Franklin Energy Services, LLC (“Franklin” or the “Company”). Terms of the transaction were not disclosed.
Franklin is one of the leading energy efficiency (“EE”) program management companies in the United States, with a significant presence in the Midwest. The Company designs and implements customized ratepayer-funded EE programs that enable electric and natural gas utilities to (i) comply with legislative and regulatory mandates to reduce energy consumption, (ii) avoid the cost of adding generating capacity by managing demand growth, and (iii) promote “green” environmental conservation measures. Founded in 1994, Franklin now has more than 200 employees operating out of 17 offices.
Scott Schafler, President of Cortec, stated “Franklin is a top performing company operating in an exciting, high-growth segment of the economy. We were attracted to Franklin because of its track record of consistently delivering superior client results. With demand for EE programs expected to grow into the future, Franklin is well positioned to help its clients comply with legislative and regulatory mandates to reduce energy consumption.” Jon Stein, a Senior Managing Director at Cortec, added “Franklin has a first-rate management team of veteran professionals, and we are excited to become their partners. As a result of this transaction, management was able to increase its ownership stake in the company alongside Cortec.” The Franklin acquisition represents Cortec Fund IV’s seventh platform investment.
Franklin’s founder and Chief Executive Officer, Paul Schueller, added “Our business will benefit from Cortec’s resources as we face the opportunities and challenges that come with growth. The Cortec team took the time to understand our business and delivered on all their promises. We look forward to building Franklin Energy with our existing management team and Cortec’s full support.”
About Franklin Energy Services, LLC
Since 1994 Franklin has designed and implemented large-scale EE programs for utilities and government agencies. These programs target end-users in the commercial, industrial, agricultural and multi-family residential markets to reduce their consumption of electricity and natural gas. Based in Port Washington, WI, Franklin has been named one of the top workplaces in Wisconsin. For more information about Franklin, please see: www.franklinenergy.com.
About Cortec Group
Cortec acquires high value-added, middle-market specialty manufacturing, service, healthcare and distribution businesses with leadership positions in their market niches. Cortec Fund IV has more than $410 million of committed capital to acquire platform companies with enterprise values of $30 million to $250 million and smaller follow-on acquisitions. Additional information about Cortec can be found at www.cortecgroup.com.