KCM CAPITAL COMPLETES EXIT OF THE INDUSTRIAL SERVICE GROUP
Sale Represents Successful Outcome of KCM’s Buy-And-Build Strategy in the Critical-to-Process Rotating Equipment Service Market
December 19, 2022
Chicago-based private investment firm KCM Capital Partners LLC (“KCM”), an investor in lower middle-market business services, value-added distribution, and specialty industrial companies, announced today that it has completed its exit of Industrial Service Group Holdings, LLC (“ISG”, the “Industrial Service Group” or the “Company”) in a sale to TJC, L.P., a New York based middle-market private equity firm. KCM’s equity partners on the investment were PNC Mezzanine Capital and Five Points Capital. Terms of the transaction were not disclosed.
Formed by KCM in 2019 alongside industry veteran Jim Richard, the Industrial Service Group made six strategic acquisitions of highly complementary businesses providing non-discretionary industrial services and products in critical-to-process, rotating equipment applications such as valves, pumps, motors, compressors and gears. With one of the largest groups of specialized technicians in the industry, and a broad line card of products, the Company services a large and diversified group of customers and end markets across a wide geography.
During KCM’s ownership, the Company completed a series of transformational growth and operational initiatives, including significant investments in the Company's management team, sales and marketing efforts, product lines, and internal operating systems, resulting in an organic EBITDA CAGR of nearly 30%.
Jim Richard, Chief Executive Officer of the Industrial Service Group, added "The KCM team has been an ideal partner to ISG. Their experience working with founders and their ability to identify and execute on both organic and acquisitive initiatives enabled us to accelerate the growth of the Company and create value for all stakeholders. We are thankful for KCM’s support and guidance and look forward to the next chapter of growth.”
In reference to KCM's investment, Jon Gilbert, Co-Founder and Partner of KCM, said, "The success of KCM’s buy-and-build strategy with ISG highlights our deep bench of relationships with best-in-class executives like Jim Richard and demonstrates our ability to identify proprietary opportunities, establish meaningful partnerships with founders and management teams, and execute on strategic and acquisitive growth initiatives. We wish Jim and the entire ISG team the best success in their next phase of growth."
Stephens Inc. and Katten Muchin Rosenman LLP advised KCM and the Company on the transaction.
About the Industrial Service Group:
The Industrial Service Group is a family of companies providing critical-to-process rotating equipment service, repair and distribution for multiple industries. As industrial plants and facilities continue to age, the outsourcing of repair, replacement and service of critical equipment is expanding. The Industrial Service Group is quickly emerging as the fastest growing industrial service company focused on recurring, outsourced routine MRO services. From our account managers, operations leaders and highly specialized and qualified technicians, we provide inspection, condition assessment, maintenance and repair services that result in greater safety, reliability, and operational efficiency for your most critical assets. We maintain key OEM relationships and well stocked inventory levels to ensure quick turnaround. For more information, please visit https://www.isgservice.com.
About KCM Capital Partners:
KCM Capital Partners is a Chicago-based private investment firm focused on investing in founder-owned lower middle-market business services, value-added distribution and specialty industrial companies throughout North America. Founded in 2017, KCM follows a simple philosophy – Keeping Continuity Matters – which is emblematic of our belief in the importance of a healthy culture and collaborative, trustworthy partnerships. With this strategy in mind, we look to support founders and management teams of niche market leaders with creative solutions and strategic guidance to effect transformational growth. For more information, please visit www.kcmcap.com.
Contact:
Jon Gilbert
Partner
(312) 902-5247
jgilbert@kcmcap.com