The Situation
Fidelity BSG is executing an aggressive growth strategy aimed at expanding both its technical capabilities (building automation & controls, as well as service-focused mechanical contracting capabilities) and its geographic footprint into strategic, high-growth markets (South and Gulf regions). Ascend acts as an outsourced buy-side partner, originating and in some cases helping to close transactions on behalf of the Fidelity BSG management team and their private equity partner, Onex Partners. Prior to Onex Partners’ acquisition of Fidelity BSG in November 2021, our team worked with private equity partner Oaktree Capital Management. Services range from managing the entire lifecycle of the processes to origination and relationship development only:
- Preliminary financial modeling and business diligence for initial target evaluation
- High-touch, tailored target management to facilitate negotiation and structuring
- Due diligence coordination of third-party advisors
Industry
- Business Services
Client Type
- PE-backed Strategic
Services Provided
- Buy-Side Transactions
The Strategy
Our team worked with Fidelity BSG and Oaktree (private equity partner at the start of our engagement) to understand their unique acquisition model and develop a set of corresponding criteria used to establish a universe of targets within high-priority regions with the desired capabilities. As different markets and ownership structures can create varying situations for target companies, we tailor outreach tactics to successfully engage companies based on the scenario—whether it is networking through their advisors, industry peer-group members, or mutual connections. We often reevaluate the strategy as we did when Onex Partners acquired Fidelity BSG in November 2021.
The Execution
A substantial component of this engagement involves remaining disciplined in evaluating targets to fit the criteria, which means frequently disqualifying targets and passing up on opportunities that are not a fit. Fidelity BSG and Onex Partners’ unique partnership model (vs. acquiring companies and replacing management) means we not only have to meet the operating criteria, but also ensure the selling shareholders/leadership are aligned from a culture and aptitude standpoint. Our rigorous screening process on the front end helps us remain tremendously efficient in bringing desired parties to close vs. submitting many IOIs/LOIs just to disqualify them at a later date and/or running into avoidable disagreements.
The Results
Since October 2020, our team either originated or helped close eight transactions addressing the specific goals set forth by Fidelity BSG and their private equity partners. All were either proprietary deals (the targets did not run sell-side processes) or preempted from a proprietary relationship— Cii Service (December 2022), HVAC Control Technology (November 2022), CT/HX (September 2022), South Florida Controls (November 2021), AIR Technologies (October 2021), Metro Mechanical (July 2021), Systems Contractors (February 2021), and Smart Building Technologies (October 2020).
The Ascend Advantage
Our team’s ability to embed ourselves within Fidelity BSG’s growth efforts has been vital in developing a refined sense of what companies/capabilities to look for and understanding how to engage the targets. We take a bespoke approach designed to identify clients’ specific priorities, concisely determine their top deal points, and engage targets in a strategic way that speaks to those priorities and points. Furthermore, the close relationships we’ve developed and maintained with owners and founders in the HVAC/mechanical industry provide a valuable network to gain insight into high-priority targets and minimize lengthy and competitive sell-side processes during a highly active market.Next Up
