Situation Overview

PowerTown Construction, LLC, was an entrepreneur-owned provider of outsourced services to leading power and utility companies throughout the Southeast and along the Eastern Seaboard. Founded by CEO Steven Townsend in 2005, PowerTown specialized in a wide variety of distribution, transmission, telecommunication, and substation construction services. Headquartered in Seffner, Florida, with three operations centers to serve customers, PowerTown enjoys a stellar reputation in the industry for successful project execution.

Unique Challenges

As utility companies increase focus on core competencies and streamline workforces, PowerTown capitalized on the growing trend of outsourcing non-revenue generating functions and established a strong and profitable foothold in the market by providing critical services related to the installation of power lines, street lights and substations.

Townsend achieved much success with PowerTown’s core business model but wanted to expand the company with a more aggressive new business development strategy. In 2018, Townsend began looking for a financial partner to help solidify PowerTown’s corporate infrastructure so it could expand its geographic footprint and provide additional service offerings to its customers.

Results

Carl Marks Securities (Carl Marks) was engaged by PowerTown to perform a full range of merger & acquisition advisory services. The Carl Marks team prepared a confidential offering memorandum and distributed it to a targeted list of potential strategic buyers and financial investors. Carl Marks created a secure data room to facilitate the sharing of due diligence information, arranged management presentations, and moved negotiations forward with several potential buyers to obtain indications of interest.

Ultimately, this successful and efficient process resulted in the sale of PowerTown to Entregado, a portfolio company of AEA Investors who had deep understanding of the utilities industry and shared Townsend’s vision for the company. This successful transaction allowed Townsend to own equity directly in Entregado post-closing, further aligning the interests of Townsend and the buyer.

Insights

  • Selling a family/founder-owned business is often the most important financial transaction in an owner’s life. It is critical to have a financial advisor who truly understands the significance of this decision. Carl Marks Advisors knows firsthand the intricacies of owning, growing and selling our own operating businesses, and we work tirelessly to find the right deal with the right buyer at the right price.
  • In depth knowledge of the utilities sector and its specific emerging trends was required to find the right outcome for PowerTown and its owner. Because Carl Marks Advisors understood from the beginning that the company provided a valuable service that was no longer a core competency of most utilities, they were able to find the exact partner needed to provide the highest value for the company and to partner with the owner in executing a smooth plan.
  • It is important to partner with a financial advisor that offers a full spectrum of M&A solutions. Carl Marks Advisors’ investment banking team helps clients meet challenges across the full investment cycle, from identifying strategic opportunities, to unearthing financing options and extracting value through sale or a recapitalization.