Partners Group, a global private markets firm, announced on Monday that its two US HVAC portfolio companies have experienced significant revenue growth since their acquisition in 2021, driven by extreme weather and other market tailwinds. DiversiTech, a manufacturer and distributor of HVAC parts and supplies, has seen revenues rise by 60%, while PremiStar, a commercial HVAC services provider, has doubled its revenues over the same period.
The companies have also delivered strong EBITDA growth, with DiversiTech achieving a 14% compound annual growth rate (CAGR) and PremiStar a 22% CAGR. This financial performance reflects the robust demand for HVAC systems and maintenance services across the United States.
The increasing frequency of extreme weather events, particularly heat waves, has heightened the importance of efficient HVAC systems for both residential and commercial properties. As temperatures soar, the need for cooling solutions becomes critical, driving demand for parts, supplies, and maintenance services. Additionally, the aging installed base of HVAC units and the push for more energy-efficient systems are contributing to sustained growth in the sector.
Partners Group acquired DiversiTech and PremiStar through its direct private equity program in 2021. Since then, the firm has leveraged its operational expertise to implement transformational value creation plans at both companies. These initiatives include investments in operations, supply chains, and technology, as well as strategic add-on acquisitions to expand their capabilities and market reach.
Wolf Scheider, Head of Private Equity at Partners Group, commented on the growth, stating, "Across our HVAC portfolio, we are seeing organic, disciplined growth. As heat waves become a defining challenge of how we live and work, demand for HVAC parts and maintenance is rising. Our portfolio companies are essential to helping communities and enterprises adapt to these conditions, with meaningful growth runway ahead as value creation initiatives mature."
The implications of this growth extend beyond the companies themselves, affecting the broader HVAC industry and the economy. The increased demand for HVAC services supports job creation in manufacturing, distribution, and installation. Moreover, the emphasis on energy efficiency aligns with broader environmental goals, as modern HVAC systems reduce energy consumption and greenhouse gas emissions.
For consumers and businesses, the reliability of HVAC systems is becoming increasingly critical, especially in regions prone to extreme heat. The expansion of DiversiTech and PremiStar ensures that parts and services are more readily available, helping to mitigate the impact of heat waves on public health and productivity.
Partners Group's success with these investments highlights the attractiveness of the HVAC sector as a resilient and growing market. The firm's ability to identify and capitalize on such trends demonstrates its expertise in private equity and its commitment to building market leaders. As the effects of climate change intensify, the importance of HVAC systems will only continue to grow, positioning Partners Group's portfolio companies for sustained long-term success.
