Novacap Industries V, managed by Canadian private equity firm Novacap, and a continuation fund have acquired a majority interest in The Master Group, a Boucherville, Quebec-based HVAC/R products distributor. The asset was acquired from Novacap Industries III and other shareholders, with C$1.1 billion raised for Master’s growth. The continuation fund was led by Goldman Sachs’ Vintage Funds. Other investors included Fonds de Solidarité FTQ, Fondaction, Portfolio Advisors, Lexington Partners, Blackstone Strategic Partners, Whitehorse Liquidity Partners and iA Financial Group.
Novacap Industries Completes its First Continuation Vehicle
MONTREAL, Dec. 16, 2021 /CNW Telbec/ – Novacap, a leading North American private equity firm, announced today that its Industries team has completed its first private equity continuation vehicle and the second for Novacap. Novacap Industries V and the continuation vehicle acquired a majority interest in The Master Group (Master) from Novacap Industries III and other shareholders. Following this transaction, the total capital raised to support the growth of Master Group stands at CDN$1.1 billion.
The continuation vehicle, whose lead limited partner is the Vintage Funds within Goldman Sachs Asset Management, includes participation from several additional key institutional investors including, Fonds de Solidarité FTQ, Fondaction, Portfolio Advisors, Lexington Partners, Blackstone Strategic Partners, Whitehorse Liquidity Partners and iA Financial Group, among others.
This announcement follows Master’s acquisition of U.S.-based Value-Added HVAC Distributors (VAD) and its three subsidiaries, Virginia Air Distributors, Allied HVAC Distributors and South Carolina Air Distributors last week. The move marks the company’s expansion into the US market, after a successful expansion in Canada, from coast to coast.
“Building great companies takes time, resources and strong partnerships. The continuation vehicle is a testament to our unwavering commitment to providing Master with the resources and firepower necessary to succeed in its next phase of growth,” said Jacques Foisy, Chairman of the Board & Managing Partner at Novacap. “Over the years, we have nurtured deep relationships with the entrepreneurs and their companies. The continuation vehicles allow us to expand our strategic ambitions and build scale in a disciplined manner. We look forward to creating sustainable value with Master as they realize the full scope of their ambition.”
Founded in 1952, Master is a Canadian leader in the heating, ventilation, air conditioning and refrigeration industry. Following Novacap’s investment in Master in 2014, the company has quadrupled its revenues, totaling more than $1 billion per annum, and has significantly expanded its operations in Canada, and more recently in the United States.
The company today has 1,250 team members, operates 68 branches and five distribution centers across Canada and the United States. It is known for its deep technical expertise, customer-centric approach, and extensive inventory from over 1,400 suppliers.
“Master is committed to playing a leading role in the consolidation of the highly fragmented North American HVAC/R market. Today, in partnership with Novacap, the company is executing on its strategic plan to double the business over the next five years by increasing its presence in Canada and the United States through steady organic growth and acquisitions,” said Louis St-Laurent, CEO at Master. “We are proud of Master Group’s culture: our business approach sets us apart from our peers and positions us as the preferred partner for entrepreneurs looking to grow with a dedicated team of experts at their side.”
“We have worked hand in hand with Master over the past seven years, transforming the company from a regional leader to the largest HVAC/R distributor in Canada,” said Jean-Francois Routhier, Senior partner at Novacap and Chairman of the Board of Master Group. “This renewed partnership paves the way for our second phase of growth as we aim to become the largest independent distributor of HVAC/R products in North America. We are extremely proud of our accomplishments with Master Group and couldn’t be more excited about the prospects for the team and the company.”
“We were pleased to work with a high-quality group of institutional investors to help facilitate a strategic transaction that provides additional time and capital for Master’s continued growth. We are delighted that this is the second opportunity that we have partnered with Novacap on a transaction like this,” said Thom Spoto, Managing Director at Goldman Sachs Vintage Funds.
Credit Suisse Securities (USA) LLC acted as exclusive advisor and placement agent for the continuation vehicle. Davies, Ward, Phillips & Vineberg LLP, and Fasken Martineau DuMoulin LLP acted as legal counsel.
About The Master Group
A leader in the heating, ventilation, air conditioning, and refrigeration sector, The Master Group celebrates its 70th anniversary in March 2022. Named one of Canada’s best-managed companies since 2010, Master is the largest HVAC-R distributor in Canada and now a meaningful player in the United States. The company now employs 1,250 dynamic and devoted individuals who serve the industry from 68 branches and 5 distribution centers across Canada and the Northeast of the United States. For more information, visit www.master.ca
Founded in 1981, Novacap is a leading North American private equity firm with over C$8B of AUM that has invested in more than 100 platform companies and completed more than 150 add-on acquisitions. Applying its sector-focused approach since 2007 in Industries, TMT, Financial Services, and Digital Infrastructure, Novacap’s deep domain expertise can accelerate company growth and create long-term value. With experienced, dedicated investment and operations teams as well as substantial capital, Novacap has the resources and knowledge that help build world-class businesses. Novacap has offices in Brossard, Québec and Toronto, Ontario. For more information, please visit www.novacap.ca.