Investment company targets US HVAC distributors

USA: A newly-formed, Miami-based investment firm is looking to invest in founder-owned US HVAC parts and equipment distribution businesses. 

Advantage Distribution Holdings (ADH) is the first platform formed by Tigertail Capital Partners (TCP), an investment company led by Alex Gatof, Andrew Och and Zach Katz, who collectively have over 25 years of experience in private and public market investing in addition to software and data engineering.

The new company says it will be focused on making control investments in businesses with enterprise values up to $100m and partnering with existing management to “accelerate growth” and create long-term value for shareholders. 

“Distributors, with their irreplicable logistics networks and hyper-localised fulfilment capabilities, are the lifeblood of the US supply chain and poised to benefit from numerous structural and secular tailwinds,” observed co-founder Alex Gatof.

“To capitalise on this, we are committed to building a best-in-class distribution platform, having identified HVAC as the perfect industry in which to do so,” he told the Cooling Post.

“We are actively seeking partners to grow alongside, and target owners who are looking to continue running their businesses. We offer significant upside through a ‘second bite of the apple’ approach as part of a larger platform, and ADH is committed to providing the capital, resources and relationships needed to accelerate growth.”

Colleague Zach Katz added: “At TCP, we have an intimate understanding of the unique opportunities and challenges faced by founder and family-owned businesses.” 

Andrew Och observed that industry dynamics had created a “barbell-shaped” competitive landscape between regional distributors and major platforms. “We believe there is a compelling opportunity to build into the middle, leveraging scale and technology to enhance our value proposition to both our suppliers and customers.”

The three founders boast prior experience with global investment firms such as HIG Capital, Coatue Management, and Citadel, investment banks including Goldman Sachs and Credit Suisse, and FinMkt, a FinTech software solution offering home improvement financing.

Further information here.