Frontenac, the Chicago-based private equity firm, announced on November 3 the recapitalization of Hayes Commercial, a Chicago provider of commercial and industrial mechanical services, in partnership with its management team. Frontenac acquired the business from TJM Capital Partners, a Chicago-based private investment firm. Financial terms were not disclosed.
The asset.
Hayes maintains, repairs, and installs HVAC, plumbing, boiler, and building control systems for commercial and industrial customers across the Midwest. It sells both directly to end users and facility owners and through general contractors, and it does the work with an in-house union workforce. Frontenac’s release puts it plainly: 108 Chicago winters’ worth of boilers, chillers, and late-night service calls.
That mix matters. Work for owners and facility managers tends to be recurring maintenance and repair on installed equipment. GC-driven work is more project-based. A contractor that does both, and also handles the building controls layer, can follow a building from installation through decades of service. In a cold-climate market like Chicago, boiler and heating work is non-discretionary.
The buyer.
Frontenac invests in lower middle market buyouts in the consumer, industrial, and services sectors. It works through an executive-centric model it calls CEO1ST, pairing companies with experienced operators. The firm says it identified and sourced Hayes as part of a thesis-driven search in facility maintenance services. Managing Partner Ron Kuehl pointed to “an attractive and resilient end market and meaningful opportunities for continued growth.”
CEO1ST Partner John Barrett, a longtime facility and building services executive, joins the Hayes board. He is partnering with Eric Reisner, who has more than 35 years of experience leading commercial and industrial field service, HVAC, and building controls businesses. President Mark Tibbetts, Executive Vice President Tim Johnson, and Executive Chairman Bart McCartin stay in their roles.
A platform, not a tuck-in.
This is a second sponsor ownership for Hayes. TJM held it first, and Frontenac is buying it as a platform. Frontenac uses the word “platform” itself, and it is adding operators with field-service and controls backgrounds to the board. That combination usually means acquisitions are coming. A 108-year-old union contractor with an established Chicago customer base gives a sponsor a base to add other Midwest mechanical, controls, and service businesses, and to push the revenue mix toward recurring maintenance agreements.
Union labor is part of the story too. Frontenac and McCartin both mention the workforce and the union partners. In Chicago and much of the industrial Midwest, many commercial and institutional jobs require union labor. A union platform gives a buyer a natural path to acquire other union shops, which non-union consolidators have a harder time integrating.
What it means.
If you own a commercial or industrial mechanical contractor in the Midwest, union or open shop, a well-funded local buyer has just set up shop with a stated facility maintenance thesis. Platforms like this pay most for service and maintenance revenue, controls capability, long-tenured technicians, and customer relationships with facility owners, not only GCs. Know how much of your revenue is recurring service versus bid project work. That split will drive the valuation conversation.
Own a commercial mechanical contractor in the Midwest?
Schryver & Co. advises trades owners with roughly $5 million to $100 million of revenue and $1 million to $5 million or more of EBITDA, depending on the vertical. If a platform has reached out, or you want a clear read on what your HVAC, plumbing, or controls business would be worth to a buyer building in your market, reach Will at will@schryverco.com.
Talk with Will →