When Trivest Partners was introduced to Dauenhauer, a family-run plumbing business in Louisville, the firm loved the eternal nature of burst pipes and clogged drains.
“This isn’t a security monitoring business where you might have a contract that pays you every month, but we said, ‘That doesn’t matter.’ [TurnPoint is] just super busy all the time, it’s not seasonal and it never stops. You can’t defer it; if you have plumbing, you’ve got to fix it,” says Forest Wester, a partner at Trivest who co-led the deal with Kristin Archer, vice president.
Putting this vision to work, Trivest formed TurnPoint Services through its investment in Dauenhaur – transforming the single-market and single-service business into a company that large buyers and PE-backed strategics were vying for four years later. Fueled by an aggressive M&A playbook, TurnPoint’s staff jumped from 160 to 2,000-plus, all the while establishing a presence in 13 markets and adding HVAC and electrical services to its suite of offerings.
“We went into a sector that was not exactly out of favor but not highly sought after by any stretch – that allowed us to be an early mover,” Wester says.
Four years after buying the single-location operator for $30 million, Trivest in November 2020 sold TurnPoint to OMERS Private Equity for an enterprise value of approximately $1 billion, according to an LP with knowledge of the transaction. The Coral Gables, Florida, firm generated a gross IRR of more than 136 percent and MOIC of more than 35x upon exit – the largest MOIC in Trivest’s 40-year history, the LP source says.
Thanks to strong organic growth out of the gate and a low initial debt balance, Trivest after its investment made 18 add-on acquisitions, funded exclusively with debt, increasing EBITDA by 10x without needing to write an incremental equity check, according to the source.
Trivest intended to build a regional or national platform, but had to improvise: “We lacked the people and we lacked the technology,” Wester says. “The scariest thing is two-fold: you know that integration is a risk, and the only way to overcome that is with a really excellent team, and we had to build the team. You pick the wrong person and it’s challenging.”
Trivest assembled a management team that included Kurt Bratton, a former executive of BrightView Landscapes; and CFO Dan Godbey, formerly of PwC and ICAP. They then saw to the next hurdle: investing in tech to modernize a largely paper-based business with no field management system.
Ready to put its acquisition engine to work, another key Trivest tool came into play. While many PE firms give the top four or five C-suite members within a big company a stock opportunity, Trivest makes it a point to give employees a stake.
“The biggest obstacle to growth in home-services is turnover; if you have turnover at the GM level and the leadership level, that’s going to exacerbate the turnover at the technician level,” Wester says. “Across our 94 shareholders, we didn’t lose a single person. They stayed with us through the four years, which is what we were trying to do. It is a great retention tool.”
Of the company’s 94 management shareholders, 60 earned proceeds in excess of $100,000, the LP source says.
Having a track record of closing on terms was also crucial, Wester says, particularly given Trivest’s singular focus is backing entrepreneurs and family-owned companies. “That’s one of the reasons founders pick us – they know they are going to get to the finish line.”
Trivest through its investment closed 18 of the 18 deals on the same terms of the initial letter of intent. In fact, as time went on, the add-ons accelerated, with TurnPoint closing 12 acquisitions in the final 12 months of Trivest’s ownership.
At the time of Trivest’s investment, consolidation had been happening in large markets. Starting out in Louisville, the firm opted to do something different – replicating the Dauenhauer strategy in other tier-two markets like Kansas City, Greenville and Columbia, South Carolina. “We were really intentional about driving an M&A pipeline so that the next buyer would be able to see the momentum was going to continue,” Wester says.
There was no shortage of interest. After launching a targeted process, Trivest signed a purchase agreement within 24 hours of its initial bid date, Wester recalls. “We didn’t sleep that night. The reality is that our outcome comes down to being all about people. Without Kurt and the team, Trivest would not have been able to deliver this result.”
Correction: This report has been updated with the correct spelling of Kristin Archer and Dan Godbey’s prior executive experience.
The winning numbers
Amount returned on the $11m investment, according to an LP
MOIC: the largest in Trivest’s 40-year history
Number of employees eligible to become shareholders
Increase in EBITDA growth from initial acquisition