As a way of meeting the growing need for energy efficient heating and cooling solutions, South African corporate and investment bank Rand Merchant Bank (RMB) Corvest has partnered with UK investment firm Bay Tree Private Equity and alternative investment funds manager and adviser Westbrooke Alternative Asset Management, to acquire component supplier Hawco.

Hawco, based in the UK, supplies components for heating, ventilation, air-conditioning and refrigeration (HVACR) systems, as well as for vending machinery and industrial HVACR clients. The company also supplies commercial refrigeration and air-conditioning systems.

Hawco’s footprint is expanding in Europe, the Middle East and the US, says RMB Corvest executive Geoff Wilmot, adding that “Africa will be on the agenda in the medium term”.

“Two good examples of Hawco’s expertise in energy efficient heating and cooling solutions are the increased prevalence of refrigerated delivery vehicles – both internal combustion engine vehicles and electric vehicles – and the trend towards heat pump technology for residential and commercial heating applications.”

Together with Hawco’s traditional customers, RMB Corvest believes there are tailwinds for the sector and is hopeful that its acquisition of Hawco can positively contribute towards the continued growth of the latter’s presence in the HVACR market.

For RMB Corvest, joining forces with Westbrooke provides it with a partner that has on-the-ground operations in the UK, thereby enabling the team to be closer to the underlying investment and investment partner, Bay Tree.

Westbrooke provided a significant equity co-investment for the transaction in support of Bay Tree Private Equity as the lead partner.

RMB Corvest’s partnership with Westbrooke is deliberate, as it has previous experience in this sector that, together with expertise, are key value-added components to the transaction. Westbrooke will be actively involved in supporting Bay Tree in strategy and capital allocation, in addition to any future merger or acquisition activity.

“RMB Corvest has demonstrated its skill and expertise locally and offshore, in strategically growing companies,” says Wilmot.

He adds that the company’s previous experience in the UK market means it is well positioned to support Hawco’s aspirations regarding expanding its UK and European footprint in the HVACR sector while realising significant return on investment for RMB Corvest.

“This is an incredibly exciting time and a huge opportunity for the business,” says Hawco MD Martin Butler.

Combining capital and expertise from RMB Corvest, Westbrooke and Bay Tree, Hawco, with its established skills and expertise, will build on the value-added services it offers, as well as the success of its international sales.

Going forward, Wilmot says RMB Corvest will continue to look for further appropriate investment opportunities, especially in the engineering sector.

RMB Corvest encourages organisations to identify the most suitable private equity partner before undertaking any shareholder decision: “You will need to make sure you find the right team to be a strategic asset for the business,” he adds.

The company has funding readily available and continues to identify other investment-ready assets to bolster its growing portfolio.

“We will carry on investing in firms that offer long-term capital growth and income while pursuing returns, steadily,” he concludes.