Kian Capital Partners, a lower-middle-market-focused private investment firm, closes a single-asset continuation fund to reinvest in SPATCO Energy Solutions, expanding Kian’s assets under management to just over $1 billion. The transaction provides liquidity to existing investors seeking to monetize performance to date while providing Apogem and other new continuation fund investors the opportunity to invest.
SPATCO is a leading fueling infrastructure services provider in the Southeast, Mid-Atlantic and Southwest, offering forward-thinking, turnkey solutions for America’s petroleum and EV-charging infrastructure operators. SPATCO was founded in 1935 and serves full-service convenience stores, fueling centers, electric vehicle charging locations, local and state municipalities and commercial fleet operators with a broad portfolio of services.
Kian originally invested in SPATCO in 2015 with the firm’s inaugural fund, Kian Mezzanine Partners I, L.P., providing subordinated debt and minority equity to support smaller add-on acquisitions. In September 2020, Kian acquired a controlling interest in SPATCO via an investment from Kian Mezzanine Partners II, L.P. After completing the recapitalization, John Force was promoted to CEO after working for SPATCO for over 20 years. Under his leadership, the platform has evolved into one of the nation’s leading fueling infrastructure solutions providers, with a people-centric and customer-focused foundation and a skilled field technician base regarded widely for its capabilities, fast response times and leading first-time fix rates. Since 2020, EBITDA has quadrupled as a result of eight strategic add-on acquisitions and several new branch openings. SPATCO has 33 offices spanning 16 states and approximately 1,000 team members as of June 30th, 2024.
“The completion of this continuation vehicle is a significant milestone not only for the future of SPATCO but also for our firm, as we now have over $1 billion in capital under management,” said Kian Co-Founder and Managing Partner Kevin McCarthy. “We are humbled and excited to extend our firm’s relationship with Apogem and welcome new investor relationships with blue-chip firms, including Siguler Guff and RCP Advisors. We believe there is significant opportunity for continued growth and look forward to continuing to partner with John Force and the incredible team at SPATCO.”
“As we enter this next chapter, we plan to continue executing on the robust growth plan we have developed, including rapidly expanding SPATCO’s team of technicians and continuing to pursue M&A in a highly fragmented and growing fueling infrastructure market,” said Kian Partner Jordan Lee. “We are confident that there is a long runway ahead of SPATCO, and our shared vision for the future of the platform will further solidify SPATCO as the industry’s service partner of choice.”
“With this additional investment, we are excited to build on our track record of success by adding density in existing markets and planting flags in new territories, as well as expand our scope of services for our customers,” continued SPATCO CEO John Force, who will retain ownership in the business alongside the rest of SPATCO’s leadership team. “Additionally, SPATCO will continue to expand and support its customers in the buildout and maintenance of the nation’s EV infrastructure, which is absolutely essential as technology continues to propel innovation in the energy infrastructure and equipment services sector.”
“We are thrilled to partner with the team at Kian to drive the platform's continued growth and expansion. Kian has done an outstanding job executing its M&A and organic growth strategy thus far, as SPACTO has grown to become a high-performing business and a leader within their market,” added Apogem Capital Managing Director Mike Zeleniuch.
Campbell Lutyens acted as exclusive financial advisor to Kian and SPATCO. DLA Piper and Robinson Bradshaw acted as Kian’s legal advisors. Bass Berry Simms served as legal counsel for Apogem Capital.
In conjunction with the closing of the continuation fund, SPATCO completed a refinancing of its debt facilities raising over $200 million of new debt capital to support the company’s growth. Barings and NXT Capital provided new senior financing, and New Canaan Funding and Wells Fargo Strategic Capital provided mezzanine financing.