Morgan Stanley Sells HVAC Business Sila Services to Goldman Sachs
Morgan Stanley’s private equity arm is selling its heating, ventilation and air conditioning (HVAC) business Sila Services, about three years after it invested in the company to take advantage of the growing interest in the sector.
Financial Terms Not Disclosed
Pennsylvania-based Sila will be sold to the private equity unit of Goldman Sachs Alternatives, Morgan Stanley said on Monday (Nov 11), but did not disclose the financial terms of the deal.
Sila Services Valuation
Reuters had reported in September that a transaction could value Sila, which provides residential HVAC, plumbing and electrical services, at about US$1.5 billion, including debt.
HVAC Sector Attracting Private Equity Firms
HVAC companies have emerged as a lucrative target for private equity firms due to their stable cash flows and the essential nature of services they provide.
The firms have been benefiting from busier construction activity due to lower borrowing costs and stringent environment regulations that drive demand for eco-friendly HVAC services.
Dealmaking in the sector rose 6.9 per cent year over year as of late last month, according to a report by M&A advisor Capstone Partners.
Deal Structure and Management
Sila’s management team will retain a minority stake in the company and will continue to lead the business, Morgan Stanley said.
William Blair was the lead adviser to Sila, with co-advisory support from Robert W Baird.
Morgan Stanley’s Investment Portfolio
Morgan Stanley invested in Sila in 2021. Its other investments in the industry include outdoor home care and maintenance provider Fairway Services and residential roofing company Allstar Services.
Conclusion
Morgan Stanley’s sale of Sila Services to Goldman Sachs Alternatives is the latest example of the growing interest in the HVAC sector among private equity firms. The deal is expected to be valued at around US$1.5 billion, including debt, making it a significant transaction in the industry.
FAQs
Q: Who is buying Sila Services?
A: Goldman Sachs Alternatives is buying Sila Services.
Q: How much will the deal value Sila Services?
A: The deal is expected to value Sila Services at around US$1.5 billion, including debt.
Q: Will Sila Services management team retain a stake in the company?
A: Yes, Sila’s management team will retain a minority stake in the company and will continue to lead the business.
