Midwest HVAC News
Rotunda Capital Acquires
HVAC Distributor Munch's Supply Co.
The investment, the terms of which weren't disclosed, will enable
the New Lenox, Ill., company to solidify its position in the Chicago
market and expand into new geographies, said Rotunda Capital Partner
Munch's Supply Chief Executive Robert Munch and the rest of the
Munch management team will remain in place at the company, a news
The company, which has seven branches in the Chicago area and
Northwest Indiana, distributes heating and cooling supplies to
dealers and contractors
Mr. Whisner said the family that owned the business was interested
in cashing out, while one family member wished to remain involved
with the company. The company hired advisory firm Livingstone
Partners to find a partner to invest in the business.
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Mr. Whisner said the
company fit squarely into Rotunda's distribution vertical,
adding that he had been looking at the HVAC space for many years
and that there wasn't a lot of private equity investment in the
sector, as many of the companies up for sale were family owned
and quickly snapped up by strategics. Mr. Whisner said his firm
tended to focus on investments in family- or founder-owned
businesses like Munch's Supply, especially those seeking for a
partner to help them with future growth.
As for Munch's Supply, Mr. Whisner cited the company's "superior
performance" and that it was a "business driven by replacement
demand, the ability to differentiate with service, outstanding
cash flow and is a distributor that is a key partner with their
[original equipment manufacturers]."
Mr. Whisner added that Rotunda saw Munch's Supply as a platform
investment, and the company would continue to grow in Chicago
while expanding "into other markets, primarily through
acquisitions, but also through greenfield expansion." He said
the surrounding Midwest region would be one location it would
peruse for expansion.
A Federal Trade Commission filing from November said Greenbriar
Equity Group was seeking approval to acquire Munch's Supply. Mr.
Whisner said Greenbriar wasn't a co-investor in this deal, but
declined to say if Greenbriar had bid on the company. A
spokesman for Greenbriar declined to comment.
Rotunda Capital, of Washington, D.C., typically invests in
companies with enterprise values of $15 million to $100 million.
Sectors of interest include value-added distribution, logistics,
specialty finance, business services and insurance services. The
firm invests the capital of its principals, as well as family
offices and high-net-worth individuals, on a deal-by-deal basis.