APi Group will invest $570 million to expand its elevator and escalator business.
The new Brighton-based company will acquire Elevated Facility Services Group, a Tampa, Fla.-based company with approximately 600 employees in 18 states.
Elevated is APi's largest acquisition since it paid $3.1 billion to buy Chubb's fire and security business.
Elevated generates annual revenues of approximately $220 million primarily through contracted maintenance and repair services. Its profit margins are higher than average for APi's other businesses, and this move is consistent with its long-term shareholder value goals.
Elevated also aligns with APi's core strategy of cross-selling services from inspection and monitoring services to repair and maintenance services across its portfolio.
APi provides life safety, security and professional services to the construction and construction-related industries through dozens of operating companies. The company has approximately 29,000 employees and had total revenue of $6.9 billion last year, an increase of 5.6% from the previous year.
The elevator and escalator services industry is highly fragmented, and APi believes it can leverage the addition of Elevated to further expand into a total market estimated to exceed $10 billion.
“We have long considered the elevator and escalator services market to be very attractive,” said APi Chief Executive Officer Russ Becker. “We believe Elevated is a great opportunity for APi to expand into this adjacent and attractive market and build a platform to execute our bolt-on M&A strategy.”
Elevated is owned by L-Squared Capital Partners, a Newport Beach, Calif.-based investment firm whose portfolio includes holdings in education, technology and services companies. El Squared first invested in the elevator and escalator services business in 2017 and has since added several smaller elevator and escalator companies.
“API is a well-known long-term business owner with a reputation for caring for and developing his team,” said Matt Biskaduros, CEO of Elevated. “Partnering with API provides the perfect platform to invest in and grow our business.”
The transaction still requires shareholder and regulatory approval and is expected to close in the second quarter of 2024.
