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Monday, Sep 26, 2022

2021 OC 50: Building Industry Giants

Some businesses grow organically, others via acquisitions.

The companies helmed by these four CEO did both: they’ve become the largest businesses of their types through strong day-to-day operations, as well as a shrewd eye for consolidation in otherwise fragmented industries.

Allied Universal
Santa Ana
Author: No Off Season,
The Constant Pursuit of More

Private Equity Backer: Warbug Pincus

BIO: Took a security services company that generated $12M in 1996 to $18B. Last month’s acquisition of London-based G4S PLC created the world’s seventh-largest private employer—with more than 800,000 employees. See page 1 for more.

QUOTABLE: “The plan is to grow to $25B in annual sales by 2026. We’re not slowing down.”

CoolSys Inc.
Author: The Private Equity Playbook

Private Equity Backer: Ares Management Corp.

BIO: Runs country’s largest service of air conditioning and heating systems; major clients include Costco, Starbucks, and the country’s largest grocery chains. Annual sales approaching $1 billion. Since Coffey became CEO in 2016, Coolsys has made more than a dozen buys.

NOTABLE: CoolSys and its operating businesses cover every stage of mission-critical systems from engineering and design, to installation, service and maintenance, and energy optimization. Has more than 3,000 employees nationwide, serving the daily needs of more than 45,000 customer locations across North America.

QUOTABLE: Works with Newport Beach-based Harvey & Co. to help find suitable acquisition candidates. “With more than 4,500 potential acquisition targets in the USA for CoolSys, we rely on Harvey & Co. to ‘shake the trees’ and help our internal deal team focus their activity on targets (that are) pre-qualified.”

CEO, President
Montrose Environmental Group Inc.
Private Equity Backer: Oaktree

BIO: Runs fast-growing environmental-focused firm that has about 4,500 clients that range from governments to gas companies to utilities. Provides services such as treating contaminated water, permitting work for large infrastructure projects, finding ways to reduce the carbon intensity of operations and converting waste to renewable energy. Went public in 2020 at $15 a share; company’s stock now tops $50, with a nearly $1.3B valuation.

NOTABLE: Formed in 2012, Montrose has made more than 50 acquisitions over its history.

QUOTABLE: At time of IPO, Manthripragada said Montrose will continue to look “smartly” for acquisitions involving new technologies or expansion into new geographies. “It’s a $1.2 trillion industry and there’s no brand that dominates it.”

Founder, CEO
Xponential Fitness LLC

Private Equity Backer: Snapdragon Capital Partners

BIO: Built a buff boutique fitness growth machine. Counts portfolio of nine cycling, rowing, stretching and other increasingly popular exercise brands, including Club Pilates, CycleBar, StretchLab, Row House. Xponential has grown to more than 1,750 locations in four years, with 2020 systemwide sales topping $435M through a combination of franchising and acquisitions.

NOTABLE: Murmurs of a possible IPO this year, expected to value company around $1.3B.

QUOTABLE: Rapid expansion of fitness brands it buys is “what Xponential does well and that’s what we’ve been able to prove is we can take these brands and scale them across the U.S.”


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