Next Electric sold to IES Holdings

OwnersEdge divests one of four portfolio companies

Brookfield-based OwnersEdge Inc. has sold 80 percent ownership of Next Electric LLC to IES Holdings Inc.

Reardon

Waukesha-based Next Electric is one of OwnersEdge’s four portfolio companies. Founded in 2012, it is an electrical contractor that designs, installs and maintains electrical systems for clients in the commercial, industrial, health care, water treatment and education sectors. The company reported about $25 million in 2016 revenue. It has more than 100 employees.

OwnersEdge sold Next Electric so it could further diversify its portfolio outside the construction industry, said Lisa Reardon, chief executive officer and chairman of OwnersEdge.

Houston-based IES is a holding company that owns and manages a number of subsidiaries providing industrial services. Its commercial and industrial segment provides electrical and mechanical design, construction and maintenance to the commercial and industrial markets.

Next Electric is now a subsidiary of IES, in its commercial and industrial segment. It will retain its branding.

“The acquisition of NEXT reinforces our strategy to partner with strong management teams in attractive markets,” said Robert Lewey, president of IES. “NEXT was created in 2012 by Chris Surges and his management team and OwnersEdge, NEXT’s majority owner, and has since grown to become a leading electrical contractor in the Milwaukee region. IES’s long-term investment horizon and ownership culture allowed us to create a structure where Chris and his team will retain a meaningful ownership stake in NEXT and its future. We are pleased to welcome Chris and NEXT’s over 100 team members to IES and are excited to partner with them to continue to grow NEXT.”

OwnersEdge is a 100 percent employee stock ownership plan company. In the sale of Next Electric, its management team maintained a 20 percent ownership stake. A “substantial” part of the sale proceeds were paid out to Next Electric’s ESOP employees, who had the option to roll the funds over into another qualified retirement plan or take a payout, Reardon said.

The rest of the proceeds went to OwnersEdge, which plans to put them toward its next acquisition, she said. The company, which now has 275 employees at three portfolio companies, has reviewed more than 400 acquisition targets over the past 12 months.

“We continue to look for niche tech companies that their revenue streams are off-cycle with the other three affiliates,” Reardon said. “We’re very very active. Our ultimate goal is to have eight affiliate businesses.”

Schenck M&A represented Next Electric in this transaction, and is working with OwnersEdge to find other acquisition targets.

“We narrowed it down to a strong portfolio of suitors that fit our needs,” Reardon said. “We had tremendous interest in this organization because of the health and future success that this business brings to any buyer.”

She is in talks with several potential portfolio companies at the moment, and expects to announce OwnersEdge’s next acquisition in the first quarter of 2018.

Brookfield-based OwnersEdge Inc. has sold 80 percent ownership of Next Electric LLC to IES Holdings Inc.

Reardon

Waukesha-based Next Electric is one of OwnersEdge’s four portfolio companies. Founded in 2012, it is an electrical contractor that designs, installs and maintains electrical systems for clients in the commercial, industrial, health care, water treatment and education sectors. The company reported about $25 million in 2016 revenue. It has more than 100 employees.

OwnersEdge sold Next Electric so it could further diversify its portfolio outside the construction industry, said Lisa Reardon, chief executive officer and chairman of OwnersEdge.

Houston-based IES is a holding company that owns and manages a number of subsidiaries providing industrial services. Its commercial and industrial segment provides electrical and mechanical design, construction and maintenance to the commercial and industrial markets.

Next Electric is now a subsidiary of IES, in its commercial and industrial segment. It will retain its branding.

“The acquisition of NEXT reinforces our strategy to partner with strong management teams in attractive markets,” said Robert Lewey, president of IES. “NEXT was created in 2012 by Chris Surges and his management team and OwnersEdge, NEXT’s majority owner, and has since grown to become a leading electrical contractor in the Milwaukee region. IES’s long-term investment horizon and ownership culture allowed us to create a structure where Chris and his team will retain a meaningful ownership stake in NEXT and its future. We are pleased to welcome Chris and NEXT’s over 100 team members to IES and are excited to partner with them to continue to grow NEXT.”

OwnersEdge is a 100 percent employee stock ownership plan company. In the sale of Next Electric, its management team maintained a 20 percent ownership stake. A “substantial” part of the sale proceeds were paid out to Next Electric’s ESOP employees, who had the option to roll the funds over into another qualified retirement plan or take a payout, Reardon said.

The rest of the proceeds went to OwnersEdge, which plans to put them toward its next acquisition, she said. The company, which now has 275 employees at three portfolio companies, has reviewed more than 400 acquisition targets over the past 12 months.

“We continue to look for niche tech companies that their revenue streams are off-cycle with the other three affiliates,” Reardon said. “We’re very very active. Our ultimate goal is to have eight affiliate businesses.”

Schenck M&A represented Next Electric in this transaction, and is working with OwnersEdge to find other acquisition targets.

“We narrowed it down to a strong portfolio of suitors that fit our needs,” Reardon said. “We had tremendous interest in this organization because of the health and future success that this business brings to any buyer.”

She is in talks with several potential portfolio companies at the moment, and expects to announce OwnersEdge’s next acquisition in the first quarter of 2018.

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