Blackstone increases investment in the electrification sector: acquires electrical equipment service provider Shermco for $1.6 billion
Blackstone acquired electrical equipment service provider Shermco for $1.6 billion, further strengthening its position in the electrification sector. This transaction values Shermco at $1.6 billion and involves electrical system maintenance, repair, and testing services. The Blackstone Energy Transition Investment Company, led by David Foley, has recently completed several transactions, including the acquisition of Enverus for over $6 billion. The fund's internal rate of return is approximately 25%
According to the Zhitong Finance APP, Blackstone (BX.US) has announced that it has reached an agreement to acquire electrical equipment service provider Shermco, marking its latest move in the increasingly important electrification process. The statement indicates that Blackstone's Energy Transition Investment Company (the firm's private equity business focused on the energy sector) is acquiring Shermco from Gryphon Investors. This transaction values Shermco, headquartered in Ivel, Texas, at $1.6 billion (including debt).
Founded in 1974, Shermco has over 600 technicians and 200 engineers located across the United States and Canada, providing electrical system maintenance, repair, and testing services to clients. Its services cover a wide range of sectors, from semiconductors and data centers to automotive and food and beverage industries.
According to a statement released at the time, Gryphon, based in San Francisco, acquired a majority stake in Shermco from Oaktree Capital Management in 2018 for an undisclosed amount.
This transaction is the latest in a series of deals made by Blackstone's Energy Transition Fund. The fund is led by David Foley, a senior managing director at Blackstone Group. This month, the fund announced the acquisition of Enverus for over $6 billion, one of its largest transactions to date, and has also reached agreements with other companies including Potomac Energy Center, Sediver, Westwood Professional Services, and Trystar.
In February of this year, Blackstone's Energy Transition Fund IV announced the completion of its final fundraising, with a cap of $5.6 billion. This size is approximately one-third larger than Blackstone's Energy Transition Fund III. The fund disclosed to investors that its internal rate of return is about 25%.
Foley stated in an interview, "We have a broad understanding of what 'energy transition' means and how to achieve it." He also noted that this strategy makes the company's portfolio more resilient. Foley remarked, "We are not going to place all our bets in one area."
