Blackstone Acquires Shermco for $1.6 Billion

Blackstone, the world’s largest alternative asset manager with more than $1 trillion in assets under management (AUM), said that private equity funds affiliated with the company have agreed to acquire Shermco, a leading provider of full life-cycle electrical equipment services, from Gryphon Investors, a leading middle-market private investment firm, for $1.6 billion.

Founded in 1974, Shermco is one of the largest electrical testing organisations accredited by the Inter-National Electrical Testing Association (NETA), providing comprehensive electrical system maintenance, repair, testing, commissioning and design services, with more than 600 NETA technicians and 200 engineers across 40 service centres in the US and Canada.

Shermco provides critical services for data centres, utilities and diversified commercial and industrial end-markets, partnering with customers to enhance the safety, reliability and efficiency of their critical electrical infrastructure, while minimising downtime and outages.

JP Munfa and Michael Staub, Senior Managing Directors at Blackstone, said that Shermco’s maintenance, testing, and commissioning services are vital to maintaining the reliability and safety of mission-critical electrical infrastructure.

“We are excited to partner with Phil Shermco’s CEO Petrocelli and his exceptional leadership team to build on Shermco’s strong momentum and expand its ability to serve customers nationwide as a trusted provider of essential electrical services,” they said.

David Foley, Global Head of Blackstone Energy Transition Partners, said that as a leading energy investor focused on investment opportunities related to increasing electrification and the energy transition, they were proactively seeking out companies with strong, entrepreneurial management and work with them to fully capitalise on growth opportunities, building scale and competitive advantage.

Shermco is well positioned to benefit from continued growth in the installed base of technically complex electrical equipment both on the grid and behind the meter and is the 12^th investment commitment from Blackstone’s most recent energy transition fund since the initiation of its investment period in June last year, they said.

Exciting Next Step

Phil Petrocelli said that partnering with Blackstone marks an exciting next step in their growth trajectory.

“Together with its scale, resources and deep expertise across the energy industry, we are excited to continue serving our customers’ critical power-system needs and expand our footprint and capabilities for our talented technicians and engineers – all while maintaining Shermco’s unwavering commitment to safety, service and excellence,” he added.

Shermco represents the latest in a number of recent transactions Blackstone Energy Transition Partners has announced behind its high-conviction investment themes in electrification and the ongoing energy transition, including Enverus, Lancium, Power Grid Components, Potomac Energy Center, Sediver, Trystar, Westwood, and others.

Blackstone Energy Transition Partners and Blackstone’s private equity strategy for individual investors are each expected to invest in Shermco as part of this transaction.