Riata Capital Group is diversifying into the home services sector and plans to invest up to $200 million in the next three to five years, starting with its latest investment in a subscription-based pest control service, Greenix Pest Control.
Riata, which makes equity investments between $25 million to $150 million, began reviewing the proprietary deal early last quarter.
“We had a relationship with an adviser who reached out to us with some background,” said Barron Fletcher, managing partner at Riata, referring to the sell-side adviser. “What ensued is us expressing interest to discuss a recap with the management team.”
Funding for the deal came from a set of large institutional investors that have previously partnered with the firm. No buyside adviser was involved.
Greenix, an environmentally focused pest solution company, was earlier seeking to refinance the business. Founded about a decade ago in Columbus, Ohio, the company services 13 locations nationwide, according to its website.
Jeff Fronterhouse, also a managing partner at Riata, described the business as recession resistant. “It’s not a discretionary service,” he said.
The Dallas private equity group has plans to go deeper into the residential services segment. The firm has been largely focused on business services, consumer and healthcare.
Other home focused businesses sponsored by Riata include Home Organizers, a closet manufacturer, and Shelter Distribution, a roofing products distributor. The firm has cashed out of these investments.
More recently, the firm acquired Hispanic-focused shoe retailer WSS.
Looking ahead, for Greenix, the focus will be on organic growth. “At this stage, we are not looking at add-ons,” Fletcher said.
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