Source Talks is a series where we discuss deal origination with PE and M&A pros, in collaboration with David M. Toll.
In this episode, we speak with Braden Eddy, Senior Vice President of Business Development at Hastings Equity Partners about the firm’s strategic focus within industrial service businesses. Braden also touches on the importance of consistency in building relationships and how different technological tools have augmented their deal sourcing efforts.
Braden, tell us about Hastings Equity Partners and the kinds of transactions that you do there.
At Hastings, we’re a private equity firm. We’ve been around for 20 years. We were founded in 2004 and we invest in industrial service businesses. We’ve had a pretty consistent focus since we started. Internally we define them as the businesses that develop, maintain, and support critical infrastructure. From a size perspective, we’re looking at platform investments that are between $5 million and $25 million of EBITDA. From a revenue standpoint, they’re going to be $20 million in revenue up to $200 million of revenue. Any strategic acquisition we make within a portfolio company will generally be about $1 million of EBITDA and above.
Braden, talk about what’s working today when it comes to finding transactions at Hastings Equity Partners.
We’ve got a process that we follow internally. We take a look at it every quarter and we adapt as needed. We use a lot of different technology and tools. We use Sutton Place Strategies to keep a pulse on the M&A market, help identify groups that may have experience in a space that we should be having a relationship with. We try to focus on what we need to be doing on a daily, weekly, and monthly basis to stay in front of the groups and businesses that we should be. And it’s been really great. It’s allowed us to quadruple our deal flow since 2021 and helped us to have a couple of record years. We closed nine deals last year and we’re on a good pace so far in 2024.
Bring everything home with a recent transaction that illustrates your approach to origination and tell us how you found it.
So, I’ll use two examples, two of our more recent platform investments. One is a business called GridSource, which is a maintenance service provider for communications infrastructure in the Southeast. And another business is called High Star Traffic, which is a Midwest-based traffic control provider. In both cases we got to know the owners’ years before we ever considered doing anything. We went out and visited them on a frequent basis, formed a relationship, and waited for the timing to be right for them. In both cases, seemingly out of the blue, they gave me a call and said, hey look, we’re ready to do something. Now those are two of our fastest-growing businesses that Hastings has ever seen in our 20 years.
Tell us a little bit about how you spend your time outside of work.
Nothing, earth shattering for you. I like to go on long runs, and I like to play golf. This is nothing too crazy for you.
