ORIX Capital buys HSW from Sterling Partners

ORIX Capital Partners LLC has acquired Hoffman Southwest Corp, a provider of water flow solutions. The seller was Sterling Partners. No financial terms were disclosed. Houlihan Lokey advised Sterling on the transaction.


February 06, 2017 11:00 AM Eastern Standard Time

NEW YORK–(BUSINESS WIRE)–ORIX Capital Partners LLC, a New York-based private equity firm and business unit of ORIX USA Corporation (“ORIX USA”), announced today that it has sponsored a private equity investment and has acquired Hoffman Southwest Corp. (“HSW”), a rapidly growing provider of water flow inspection, repair and cleaning services.

A former portfolio company of the private equity firm Sterling Partners, HSW provides underground pipe inspection, trenchless pipe repair, excavation and cleaning services for municipal and utility customers under the Pro-Pipe brand, and plumbing, drain cleaning, trenchless pipe repair and water restoration services for commercial and residential customers as the largest franchisee of the Roto-Rooter® brand.

The company’s existing executive management team, including CEO Mark Burel and CFO Bruce Lux, will continue to lead daily operations and provide strategic direction alongside ORIX Capital Partners.

“We look forward to working with ORIX Capital Partners, as they provide a depth of capital and resources needed to achieve our vision for continued future growth,” Burel said. “Together with a global powerhouse like ORIX, we have the ability to focus on organic growth initiatives, geographic expansion and strategic acquisitions.”

Through an opportunistic, value-oriented, “buy-and-build” investment philosophy, ORIX Capital Partners—formerly known as IX Capital Partners—is able to respond quickly to attractive opportunities and work effectively with management and co-owners to tackle challenges and enhance business prospects.

“Our country’s aging infrastructure will drive enormous demand for underground infrastructure risk mitigation as municipalities and utilities work to ensure our pipes are functioning safely and properly for the public,” said Terry Suzuki, President and CEO at ORIX Capital Partners. “We will seek strategic add-ons which will complement HSW’s historically strong organic growth and support Burel’s team in building a long-standing legacy, known for customer-focused service, safety, technology and industry leading insights and initiatives.”

The transaction closed on Jan. 31, 2017.

ORIX Capital Partners
ORIX Capital Partners makes direct control private equity investments that support growth and performance among established middle-market companies throughout North America. The team’s expertise spans industries including industrials, infrastructure services, transportation, business services, energy and consumer products. ORIX Capital Partners is a business unit of ORIX USA, a Dallas-based financial services firm that has been providing innovative capital solutions that clients need to propel their business to the next level since 1981. With more than 700 employees spanning nearly 20 offices across the U.S. and Brazil, ORIX USA and its family of companies hold $6 billion of assets and manage an additional $29 billion, approximately. Its parent company, ORIX Corporation, is a Tokyo-based, publicly owned international financial services company with operations in 37 countries and regions worldwide. ORIX Corporation is listed on the Tokyo (8591) and New York Stock Exchanges (IX). For more information on ORIX USA, visit www.orix.com.
Hoffman Southwest Corp.

Hoffman Southwest Corp. (“HSW”) is a leading provider of water flow solutions services. Its Professional Pipe Services (Pro-Pipe) division is a leader in underground pipeline condition assessment and repair, providing state-of-the-art closed circuit television (CCTV) inspection services, including video inspection, underground mapping, cleaning and rehabilitating sewage pipelines for municipalities, contractors, engineers, government agencies, facility owners, homeowners and natural gas providers in the western United States. For more information, visit http://www.pro-pipe.com.
HSW is also the largest franchisee of Roto-Rooter®, the largest provider of plumbing and drain cleaning services in North America. Today, HSW operates 12 Roto-Rooter® branches in California, Arizona, Utah, Oregon and Texas. For more information about Roto-Rooter®, visit http://www.myrotorooter.com/.

Sterling Partners
Sterling Partners is a private equity firm with a distinct point of view on how to build great companies. Founded in 1983, with over $4 billion of assets under management, Sterling is guided by its stated purpose: INSPIRED GROWTH®, which describes Sterling’s approach to investing in differentiated businesses and growing them in inspired ways. Sterling focuses on investing growth capital in middle-market companies in the healthcare services and business services industries. Sterling provides valuable support to the management teams of the companies in which the firm invests through a deep and dedicated team of professionals, including a strong network of outside directors and advisors. The people at Sterling believe in ideas and ideals, in people and in partnerships that drive long-term success. For more information, visit: www.sterlingpartners.com.