The first half of the week brought a flurry of private equity activity in the commercial services sector. A sample:
GFL Environmental, a portfolio company of Hawthorn Equity Partners, purchased waste collection business Rizzo Environmental Services from Kinderhook Industries
DFW Capital Partners completed a strategic investment in Lighting Retrofit International, a provider of services for energy- and water-efficiency projects and an existing portfolio company of Arborview Capital
Incline Equity Partners acquired Jan-Pro, a commercial cleaning franchise, from Webster Capital
On the whole, the investments are part of a year when interest in the commercial services space has experienced a minor decline in the US, even when accounting for the overall lag in private equity activity. Investors have completed 560 deals in the space through the first nine-plus months of the year, according to the PitchBook Platform, on pace for about 735 deals before the calendar flips. That would represent the median for deal flow in the sector during the past five years but would still trail significantly the 932 commercial services transactions completed last year—a 21% decrease, compared to what is on pace for an 18.6% drop in overall PE activity this year.
The quantity of deals in the industry may be on the downtick, but at the upper end of the spectrum, the size of those deals is only increasing. The $6.9 billion deal struck by Apollo Global Management to acquire security company ADT earlier this year is the largest sale in the space of the past five years. Another transaction from 2016—the $3.55 billion acquisition of the Thomson Reuters intellectual property & science division by Onex and Baring Private Equity Asia—also ranks among the six largest since the start of 2012.
As for the investors sealing deals in the past couple days? For the most part, they're interlopers in the commercial services space. Only one, Kinderhook Industries, is among the 100 busiest investors in the sector in the US since the start of 2012, according to the PitchBook Platform. Leading the way on that list? Concentric Equity Partners, with 66 deals in the space in the past five years.