One Equity sells Resolute Holdings; makes 2.1x on deal

One Equity Partners said March 8 that it closed the sale of Resolute Industrial Holdings LLC. Financial terms weren’t announced. Resolute Industrial, of Indianapolis, provides York-brand chilling products, compressor remanufacturing, refrigerant storage, and other heating, ventilation, air conditioning and refrigeration equipment services. The Resolute sale produced an IRR of 28 percent for One Equity, which made 2.1x its money on the transaction, a source said. One Equity declined comment. UPDATE: The buyer was AE Industrial Partners LP.

PRESS RELEASE

One Equity Partners Completes Sale of Resolute Industrial Holdings

Carve-out and transformational combination strategy

creates market leader and delivers successful exit

NEW YORK – MARCH 8, 2019 – One Equity Partners (“OEP“), a leading middle market private equity firm, today announced that it has completed the sale of Resolute Industrial Holdings, LLC, (“Resolute” or “the Company”), a leading independent provider of York-brand chilling products, compressor remanufacturing, refrigerant storage, and other heating, ventilation, air conditioning and refrigeration (“HVAC&R”) equipment services. The sale marks the first exit from the firm’s $1.65 Billion Fund VI, which was also the first fund raised with outside capital after OEP spun out of J.P. Morgan. Financial terms of the private transaction were not disclosed.

Headquartered in Indianapolis, IN, Resolute and its 18 branch offices serve a wide range of businesses across the industrial manufacturing, aviation, energy, power, healthcare, education, and telecommunications sectors.

Since OEP acquired Resolute from Johnson Controls through a corporate carveout transaction in 2015, the Company has experienced significant growth driven by OEP’s partnership with Resolute’s management team. In August 2017, the Company acquired Tioga HVAC Rentals, a Detroit supplier of heating and small-tonnage cooling equipment, compounding its growth through a complimentary transaction that doubled Resolute’s size, provided access to an expanded customer base, and added heating rental products to smooth out the Company’s seasonality.

“Resolute has been a fantastic investment for us. Working with CEO Mike McGraw and his team, OEP transformed Resolute into the largest independent provider of temporary HVAC&R solutions in North America,” said Andrew Oliver, Managing Director, OEP.

During OEP’s ownership, Resolute grew its sales force to deepen client relationships and accelerate cross-selling initiatives, opened new branch offices and added mechanical and general contractors in new geographic markets. Following the acquisition of Tioga, Resolute added additional small tonnage heating capacity to its business, and opened four depot locations for its equipment in Phoenix, Tampa, Atlanta, and Delaware.

“Resolute is a great example of our successful strategy of building market-leading businesses through transformative acquisitions that compound growth, generate significant value and produce market winners,” said JB Cherry, Senior Managing Director, OEP.

“We’d like to thank OEP for being a truly supportive, valuable partner in helping us to identify and act on strategic growth opportunities, and implement operational improvements that have enabled Resolute to differentiate itself as a truly unique, national leader in HVAC&R product rentals and support,” said Robert Russell, Chairman of Resolute.

“We are proud of our accomplishments under OEP’s ownership, including diversifying our customers while growing new relationships in attractive segments such as the independent contractor market,” said CEO McGraw. “We are well positioned for continued growth and we look forward to the next chapter of our journey.”

Sidley Austin LLP served as legal advisor and Robert W. Baird & Co. served as financial advisor to Resolute. Kirkland & Ellis LLP served as legal advisor and PricewaterhouseCoopers LLP served as financial advisor the buyer, AE Industrial Partners.