CVCA Awards

AWARD SPOTLIGHT: CAI Capital Partners Winner of 2022 PE Global Dealmaker Award for Feeney Utility Services Group

CVC Acentral P Eglobal Dealmaker

Brendan and Greg Feeney founded their company, Feeney Utility Services Group, in 1988 with a backhoe and a dump truck, and a single client in the underground utility space.

Today, the Boston-based company is a leading utility services provider in the northeastern U.S. that works on hundreds of projects a year, providing enhancement, replacement, and maintenance services to businesses of all sizes. 

The Feeney brothers, who immigrated to the U.S. from Ireland in 1983, spent the first couple of decades steadily building the business serving customers in the gas, electric, water, and telecommunications industries. Then, around 2011, the pair started thinking about bringing an equity partner on board to help scale the company further.

We were on a good growth path before then but were also looking for an injection of money to spend on capex,” Brendan Feeney says. We also wanted to take some money off the table.” 

The brothers hired Grant Thornton to begin the process of seeking out an equity partner. A few months later, after reviewing a few proposals, they were presented with an offer from CAI Capital Partners, a company focused on growing founder-owned businesses in the North American lower middle market. 

In 2012, Vancouver-based CAI acquired 60% of the business. The offer was a little less money than another proposal, but the Feeney’s liked the CAI’s hands-off approach and shared vision for the company. 

For the most part, they left us alone knowing that we have honesty, integrity, and good values. We were also growing,” Feeney says. The team at CAI also understood that we had a cyclical business – the first quarter is always a struggle because it’s the dead of winter – but knowing the other three quarters, it was go-time.”

And while there were lively discussions” on occasion with the investors, Feeney says the CAI team respected management’s experience and ability to operate the business.

CAI supported management on organic and acquisition growth strategies to build on and enhance its leading position within the utility services sector, according to CAI partner Curtis Johansson. 

He says CAI’s investment also helped Feeney build out the management team, implement an ERP system, and deploy technology in the field, all of which contributed to the business scaling rapidly and successfully. As a result, EBITDA grew from approximately US$9M when discussions with CAI began in 2011 to over US$70M in 2021

Johansson says the substantial increase was accomplished through organic growth initiatives, which included expanding into neighbouring states, and consistent investment in building capacity. In 2017, Feeney acquired DDS Companies, which provides utility, civil, engineering, and telecommunications services in upstate New York, Pennsylvania, West Virginia, and Ohio.

That materially diversified the company, giving the company a whole new operating region and proved that Feeney could do M&A as well,” Johansson says.

In 2021, the Feeney’s felt it might be a good time to sell the company. CAI was also ready to exit. 

We had a fairly good pool of potential partners,” Feeney says of the process.

In May last year, Feeney Utility Services announced it would be acquired by Artera Services, an Atlanta, GA-based provider of integrated infrastructure services to natural gas and electric industries across the U.S.

CAI realized a gross multiple of invested capital (MOIC) of 21.2x and an internal rate of return (IRR) of 45.3%.

The partnership with Feeney has been one of the most successful in CAI’s 32-year history,” CAI co-founder Peter Restler stated in a release announcing the deal, which was awarded the CVCA’s PE Global Dealmaker Award.

CAI truly has been a partner to Feeney these last nine years. They’ve done everything they said they would, and our business is better for having had them involved,” Brendan Feeney stated in the same release. He and his brother Greg also sold their stake in the business but have invested in Artera and remain top executives at the company they created. 

Feeney says the investors chose to be acquired by Artera, even though it wasn’t the highest bid, because it was the best fit for the company and its future.

It was important to us that we get the right partners who share our values,” Feeney says, adding that it was the same approach they took when partnering with CAI years earlier. 

Feeney says CAI may not be one of the biggest private equity firms, but they have a very personal touch.”

Adds Feeney: I think one of the reasons we’ve had a fair bit of success is because of the family culture we’ve created and maintained. The company provides a living for a lot of families whose fathers and mothers, sisters and brothers work here – and we take that to heart.”