Private equity plays in growing European HVAC market; Exponent closes €750m CV for H&MV Engineering; Nvidia plans partnerships with host of PE firms

Morning all, Craig McGlashan here with the Europe Wire from the London newsroom.

There’s another hot week ahead for much of western Europe – making this a good time to look at how private equity is backing the increased interest in air conditioning on the continent.

Next, we’ve got a deal in the world of energy, as Exponent closes an approximately €750 million single-asset continuation vehicle to extend its investment in H&MV Engineering.

To finish, we’ve got another tie-up between private equity and a company at the heart of the artificial intelligence industry. Nvidia has plans to establish independent compute financing platforms with Apollo, BlackRock, Blackstone, Brookfield, Goldman Sachs and KKR to build out AI infrastructure, with a view to mobilizing over $500 billion of third-party capital.

Core interest

With parts of western Europe set for their fifth heatwave of the summer this week, the low penetration of air conditioning in much of the region has become a matter of political debate in several countries.

Air conditioning is used in just 3 percent of UK homes, according to the National Energy System Operator, for instance. By 2050, NESO projects household adoption to grow to between 10 percent and 40 percent.

(My solution is to spend a few days home in a comparatively cool Scotland. It’ll be the first time I – and possibly anyone – has gone to Scotland for the weather…)

The HVAC sector has long attracted private equity interest in the US – check out Obey Martin Manayiti’s deep dive on the subject and some recent On the Block stories from Michael Schoeck here and here for more – and that playbook is being rolled out in a warming Europe.

Lincoln International managing director and co-head of industrials, Europe, Guillaume Suizdak told PE Hub’s Nina Lindholm before the summer that HVAC will be one of the most critical industries the investment bank will cover in the next couple of years.

While there is much attention on AC right now, ventilation is also a “core interest” to private equity and strategics, according to Suizdak. “It doesn’t require a lot of capex, and meets many other key investment criteria, including long-term demand because of climate change,” he added.

The climate change issue is particularly acute in Europe – the world’s fastest warming continent, according to several international bodies.

Recent deals include Astorg-backed IPCOM announcing its intention in June to acquire a majority stake in Le Froid Pecomark, a French distributor of refrigeration, heat pump and ventilation equipment.

Founded in 1949, Le Froid Pecomark has built a presence across France serving professionals in refrigeration, air conditioning and ventilation, including installers, contractors and OEMs.

The acquisition forms part of IPCOM’s ambition to become a leading European distributor in the sector, which the group identifies as a key strategic pillar of its long-term growth plans.

The HVAC play goes beyond homes.

OpenGate Capital in July signed a definitive agreement to acquire Merak, the global rail HVAC business of Knorr-Bremse, a listed German industrial company.

Headquartered in Getafe, Spain, Merak provides HVAC systems for rail vehicles, spanning original equipment, aftermarket services, spare parts, system modernization and overhaul. The company operates facilities in Spain, Austria, Australia, the US, China and India and serves rolling stock manufacturers worldwide.

Onex Partners in April closed a $1.6 billion multi-asset continuation vehicle, which includes investments in Fidelity Building Services Group, PowerSchool and Sedgwick.

Fidelity is a provider of HVAC, building automation, emergency power, and energy services for commercial, industrial, mission critical and institutional markets.

Baird Capital in February made a strategic investment in Rapid Energy, a specialist provider of rapid-response and mission-critical temperature-control hire services.

The company supports organizations during planned shutdowns, unexpected HVAC failures, and periods of peak demand, helping maintain operational continuity with reliable heating, cooling and climate-control systems. Rapid Energy operates across sectors including healthcare, heat networks, government facilities, manufacturing, construction and essential services.

Storing up

If Europe does embark on a mass air conditioning roll-out, it’ll put more pressure on the electricity grid – at the same time as the growth in energy-hungry data centers requires ever more electricity.

Exponent has decided there’s more opportunity in a company that operates in that sector.

The firm has closed an approximately €750 million single-asset continuation vehicle to extend its investment in H&MV Engineering.

The transaction values H&MV at €1.4 billion, representing a near twelvefold increase since Exponent’s investment in 2022 and almost doubling its valuation since welcoming minority investors LGT Capital Partners and direct equity funds managed by Hamilton Lane in 2024.

Exponent’s SACV, alongside Exponent Fund V, is acquiring H&MV from Exponent Fund IV and minority investors. The continuation vehicle was oversubscribed and is backed by a consortium of existing and new institutional investors, led by Apollo S3, Pantheon and SQ Capital.

Based in Limerick in Ireland, H&MV designs, builds and energizes high-voltage infrastructure for data centers, battery energy storage and electricity networks. It works with hyperscale technology companies, co-location providers, utilities and renewable energy developers. Since Exponent’s investment in 2022, H&MV has transformed into a global business generating more than €1 billion of revenue.

Partnering up

Speaking of data centers, a company at the very heart of that industry – Nvidia – has just announced strategic partnerships with a series of investors.

The company has plans to establish independent compute financing platforms with Apollo, BlackRock, Blackstone, Brookfield, Goldman Sachs and KKR to build out AI infrastructure, with a view to mobilizing over $500 billion of third-party capital.

The partnerships aim to establish the first compute financing platforms of their kind at global scale to enable the AI infrastructure buildout across Nvidia’s ecosystem, including leading frontier AI labs, enterprises and AI clouds, according to a press statement. Under these strategic partnerships, Nvidia will work with its partners to create dedicated pools of capital at significant scale at attractive rates for Nvidia customers.

The move is just the latest tie-up between the world of private equity and artificial intelligence. Check out Rafael Canton’s recent article on the trend, featuring the likes of Blackstone, Clearlake Capital, EQT, Hellman & Friedman, Thoma Bravo, TPG and Vista on the PE side, and Anthropic, Databricks, Google and OpenAI on the AI side.

Rafael interviewed Rodney Zemmel, global head of the Blackstone operating team; Matt Eisen, partner at H&F; Bert Janssens, co-head of private capital Europe and North America at EQT; and Peter McGoohan, partner at TPG, for the article.

That’s all from me today. Obey Martin Manayiti will bring you the US Wire later today and I’ll be back with you from Europe tomorrow.

Cheers,

Craig