Local PE Firm Kian Capital Makes Platform Investment in Team Air Distributing, a Leading HVAC Wholesale Distributor

Staff Report

Friday, June 2nd, 2023

Kian Capital Partners, a lower-middle-market focused private investment firm, announced today that in partnership with management, it completed the acquisition of Team Air Distributing (“Team Air”), a leading wholesale distributor providing OEM-branded HVAC equipment, parts and supplies to residential and commercial contractors. Team Air looks to leverage Kian’s demonstrated track record and operational expertise within the wholesale distribution space to accelerate growth via a hyper-specialized buy-and-build strategy focused on geographic and product line expansion. Financial terms of the transaction were not disclosed.
Founded in 1990, Team Air is a privately-owned, leading HVAC wholesale distributor headquartered in Nashville, Tennessee. The company’s management team has combined industry experience of more than 100 years and has a strong history of delivering best-in-class customer service, creating loyal partnerships, utilizing technological advancements and distributing the best products available in the industry. Product lines include American Standard Residential and Commercial HVAC, Ameristar Heating and Air Conditioning, and Mitsubishi HVAC. Team Air also offers parts, supplies and accessories sourced from 120 vendors. American Standard (a division of Trane Technologies) is a core product line of the company and one of the most recognized brands in the industry, renowned for manufacturing the most reliable and advanced products and poised to take advantage of the upcoming regulatory changes.
“At Team Air, we’ve always been committed to being the best partner possible to each and every customer,” said Jeff Wallace, President and CEO of Team Air. “When the search began to find the best possible partner for Team Air, it was of vital importance to find one with the same values, commitment to excellence and willingness to help us achieve our goals to expand into new geographies and take advantage of opportunities as quickly as possible. From the moment we met the team at Kian, it was obvious that they believed in backing the business as well as the people who make it happen every day. They are 100% focused on supporting my vision for growth, and I am confident that they can provide the resources, support, expertise and relationships to help us build an acquisition program coupled with our vision for organic growth that will make Team Air the #1 distributor in the Southeast.”   
Wallace will continue to lead the company as President and CEO and will maintain a significant equity stake alongside Kian. Other investment partners supporting the transaction include Barings, Everside Capital Partners, LNC Partners and MSouth Capital.
“This transaction is a significant step forward for Kian, representing the first platform investment out of our recently announced third fund and a continued focus on value-added distribution as a focus sector of the firm,” said Kevin McCarthy, Co-Founder and Partner at Kian. “Team Air is an ideal fit within Kian’s strategy of applying our team’s operational expertise in partnership with outstanding management teams to scale high-performance companies that will define their industries. We are excited about the tremendous tailwinds within what is a highly-fragmented market and the opportunity to work with Jeff and his team to accelerate technology investments and continue growing alongside Team Air’s innovative suppliers. Having built a strong culture of success, this extremely talented and motivated team is eager to take the business to the next level.”
Jordan Lee, Principal of Kian, added, “As Team Air has developed into a leading regional distributor of HVAC products in the Southeast, it has become one of the most reliable and trusted names in the business. We have closely followed the company's exciting expansion and we are pleased to partner with Jeff and the entire management team to build on this strong momentum and pursue new opportunities for growth. We are firm believers in the importance of and need for innovation within the HVAC sector and believe that Team Air is well-positioned at the forefront of emerging technology shifts to accelerate the transition to cleaner HVAC solutions.”
The trend of consolidation within the broader HVAC ecosystem is continuing to accelerate. The industry is highly-fragmented with over 5,000 independently owned distributors and 25,000 contractors. Exceptional growth rates, modernization of HVAC systems and environmental regulations combined with a large number of first-generation businesses looking at succession planning are playing significant roles in the current consolidation trend. Of utmost importance is the need for capital within the HVAC space to continue to innovate and address environmental concerns.
Team Air is actively seeking partnerships with like-minded founders with businesses that supply wholesale residential and commercial equipment, parts and supplies including HVAC, plumbing and electrical. Business owners interested in learning more should contact David Duke, Partner, Business Development at Kian, at [email protected].
Sherrard Roe Voigt & Harbison acted as legal advisor and PNFP Capital Markets, Inc. as financial advisor to Team Air. Robinson, Bradshaw & Hinson, P.A. acted as legal advisor and Fifth Third Securities served as financial advisor to Kian.