Blackstone has announced that its private equity funds will acquire Shermco for about $1.6 billion. Shermco is a leading company that provides comprehensive electrical equipment services throughout the entire life cycle. It is being sold by private investment firm Gryphon Investors.
Founded in 1974, Shermco is one of the largest electrical testing organizations accredited by the InterNational Electrical Testing Association (NETA). The company offers services like maintenance, repair, testing, commissioning, and design for electrical systems. Shermco has over 600 NETA technicians and 200 engineers working in 40 service centers across the U.S. and Canada. Its services are vital for data centers, utilities, and various commercial and industrial markets. Shermco helps customers enhance the safety, reliability, and efficiency of their critical electrical infrastructure, while minimizing downtime and outages.
This acquisition is part of Blackstone Energy Transition Partners’ recent investments in electrification and the energy transition. Other recent investments include Enverus, Lancium, Power Grid Components, Potomac Energy Center, Sediver, Trystar, Westwood, and more. Both Blackstone Energy Transition Partners and Blackstone’s private equity strategy for individual investors will invest in Shermco as part of this deal.
Advisors: Stifel and JPMorgan acted as financial advisors, and Vinson & Elkins acted as a legal advisor to Blackstone. Harris Williams served as a financial advisor, and Kirkland & Ellis served as a legal advisor to Gryphon Investors and Shermco.
KEY QUOTES:
“Shermco’s maintenance, testing, and commissioning services are vital to maintaining the reliability and safety of mission-critical electrical infrastructure. We are excited to partner with Phil Petrocelli and his exceptional leadership team to build on Shermco’s strong momentum and expand its ability to serve customers nationwide as a trusted provider of essential electrical services.”
JP Munfa and Michael Staub, Senior Managing Directors at Blackstone
“As a leading energy investor focused on investment opportunities related to increasing electrification and the energy transition, we proactively seek out companies with strong, entrepreneurial management and work with them to fully capitalize on growth opportunities, building scale and competitive advantage. Shermco is well positioned to benefit from continued growth in the installed base of technically complex electrical equipment both on the grid and behind the meter and is the twelfth investment commitment from our most recent energy transition fund since the initiation of its investment period in June last year.”
David Foley, Global Head of Blackstone Energy Transition Partners
“Partnering with Blackstone marks an exciting next step in our growth trajectory. Together with its scale, resources and deep expertise across the energy industry, we’re excited to continue serving our customers’ critical power-system needs and expand our footprint and capabilities for our talented technicians and engineers – all while maintaining Shermco’s unwavering commitment to safety, service and excellence.”
“With Gryphon’s support and operational expertise, Shermco has become a highly valued partner for its blue-chip customer base. We look forward to pursuing organic initiatives and making additional add-on acquisitions in partnership with Blackstone.”
Phil Petrocelli, CEO of Shermco
“We are proud of the exceptional business building and financial performance achieved by Shermco management, including two-fold revenue growth under Gryphon’s ownership. We are pleased that Blackstone recognized the strength of Shermco’s platform and believe the firm will be an excellent partner for Shermco management in its next phase of growth.”
Alex Earls, Partner and Co-Head of the Business Services Group at Gryphon
