Blue Wolf Capital and Yellow Point acquire The State Group

Blue Wolf Capital Partners, LLC through Blue Wolf Capital Fund IV, L.P. has acquired a majority stake in The State Group Inc. and The State Group Industrial (USA) Limited. Yellow Point Equity Partners, joined the transaction as a minority investor.

Marc Dumont, CEO of The State Group, and his management team will continue to lead the business and have made a significant investment in the equity of the company.

Michael Ranson and Bennet Grill of Blue Wolf and Tyler Smyrski of Yellow Point will join Dumont on the company’s board of directors.

Founded in 1961, Mississauga, Ontario based State Group is a diversified, multi-trade contractor providing maintenance, repair and capital services to industrial clients across North America. The firm provides comprehensive electrical and mechanical trade services to clients spanning diverse end-markets, including power generation, automotive, oil and gas, communications, metals and transportation.

The State Group operates 18 offices throughout the United States and Canada. The State Group employs over 800 professionals and skilled tradespersons from over 150 locals across eleven crafts who perform nearly 2,000 jobs each year repairing, maintaining and constructing enterprise-vital infrastructure with a relentless focus on safety and quality execution. In 2017, The State Group received the Silver Star Zero Injury Safety Award from the National Maintenance Agreements Policy Committee after performing 981,146 work hours injury-free.

Mr. Ranson, Partner at Blue Wolf, said, “Few companies have developed the track record and earned the trust required to provide the suite of mission-critical services that The State Group offers. The Company has a well-earned reputation as a best-in-class provider of electrical and mechanical services supported by a stellar safety record and excellent, long-term relationships with both customers and organized labor. We are excited to invest alongside Marc and management to build upon the Company’s success.”

Mr. Dumont said, “We welcome this investment from Blue Wolf and Yellow Point. Their capital resources and operational expertise will allow us to take advantage of the significant opportunities we are seeing in the end markets of our customer base. We also believe our companies have a strong cultural fit – Blue Wolf and Yellow Point share our values of dedication to safety, quality and strong relationships with our customers and employees.”

Mr. Ranson added, “Given our long history of investing in manufacturing assets, Blue Wolf is uniquely positioned to understand the perspective of companies that procure maintenance and repair services from multi-trade contractors. The State Group has distinguished itself by developing the capability to maintain on-site residences, provide in-house supervision and function as the internal maintenance organization across its blue-chip client base.”

Blue Wolf’s acquisition of The State Group is the second investment out of Blue Wolf Capital Fund IV, L.P., which closed in September 2017 at $541 million. This transaction marks Blue Wolf’s first investment in the infrastructure and engineering & construction services sector.

Cowen acted as the exclusive financial advisor to The State Group for this transaction and Houlihan Lokey acted as the exclusive financial advisor to Blue Wolf.

photo credit: The State Group

Ted Liu

Ted Liu, M.Sc. (Mining, Queen's), MBA (Finance, Toronto), is the Editor of Private Capital Journal, CanadaMetals.ca, TechWire.ca, and the former Editor of Canadian Private Equity. Ted has been passionately tracking Canadian private capital industry since 1992, having most recently served as Research Director for The Canadian Venture Capital and Private Equity Association (CVCA).

Ted is the architect of CVCA infobase, and is the architect of CPE Media's Financings.ca, Canada's most sophisticated and advanced all private capital and public market financing database.