Blackstone (BX.US) increases investment in electrification: acquires electrical equipment service provider Shermco for US$1.6 billion

The Zhitong Finance App learned that Blackstone (BX.US) said it has reached an agreement to acquire electrical equipment service provider Shermco. This is its latest layout in the increasingly important electrification process. According to the statement, Blackstone Energy Transition Investments (the company's private equity business focused on the energy sector) is acquiring Shermco from Gryphon Investors. The deal brought the valuation of Iver, Texas-based Shermco to $1.6 billion (including debt).

Founded in 1974, Shermco has more than 600 technicians and 200 engineers distributed across the US and Canada to provide customers with electrical system maintenance, repair, and testing services. Its services span a wide range of fields, from semiconductors and data centers to the automotive and food and beverage industries.

According to a statement issued at the time, San Francisco-based Gryphon acquired a majority stake in Shermco from Oaktree Capital Management in 2018 for an undisclosed amount.

The deal is the latest in a series of deals carried out by the Blackstone Energy Transition Fund. The fund is led by David Foley, senior managing director of Blackstone Group. The fund announced the acquisition of Enverus for more than $6 billion this month, one of its biggest deals to date, and has also reached other agreements including Potomac Energy Center, Sediver, Westwood Professional Services, and Trystar.

In February of this year, Blackstone Energy Transition Fund IV announced the completion of the final fundraising, with a maximum funding limit of US$5.6 billion. This is roughly one-third larger than the Blackstone Energy Transition Fund III. The fund revealed to investors that its internal rate of return is around 25%.

“We have a broad understanding of the definition of an 'energy transition' and how to achieve it,” Foley said in an interview. He also pointed out that this strategy makes the company's investment portfolio more resilient. “We're not going to bet everything on one area,” Foley said.