Gen Cap America Acquires TFM Services
Prior to starting his own company, Russell Thrash had gained significant experience in the grocery business, where he developed a strong understanding of the need retail stores have for reliable and high-quality floor care, cleaning and other facility services. Russell eventually relied on that knowledge to establish TFM Services in 1987 in Wichita, Kansas. While TFM initially targeted grocery and retail stores as potential clients and was heavily focused on floor care, it has evolved significantly over the past 30 years. Today, the company is a leading regional, full-service building and facilities services company with a reputation built on attentiveness to quality.
Russell was introduced to Mariner Capital Advisors in the mid-2010s when he was seeking information about business succession planning. While he was not ready to sell TFM at the time, he wanted to learn more about what he should be doing to prepare his company for sale leading up to retirement. One piece of advice that Todd Middleton, managing director with Mariner Capital Advisors, gave Russell was that he should work on finding an individual or building a team of people to gradually take over his daily responsibilities within the business so it could run smoothly without him. Over the next five years, Russell hired and mentored Patrick Phillips, a former employee who returned to TFM to help professionalize the business, oversee operations and manage customer relationships. Upon returning to TFM, Patrick transitioned into the role of Vice President and was awarded equity in the company.
Over the next few years, TFM continued to grow, and Russell shifted his responsibilities to Patrick and another key member of his team. By 2019, Russell decided he was ready to step away from TFM completely and contacted Mariner Capital Advisors to discuss a formal engagement. While Russell was seeking to retire after the sale, he also wanted to find a buyer who could carry on his legacy by providing the management team with the support needed to further capitalize on TFM’s growth opportunities.
Ultimately Russell formally engaged Mariner Capital Advisors to advise him through the sale process. Mariner Capital Advisors initiated a marketing strategy focused on large facility services companies that had been actively pursuing acquisition opportunities, as well as private equity investors with existing investments or general interest in the facility services industry.
In the middle of the marketing process, the world came to a grinding halt as COVID-19 spread across the globe, prompting widespread economic shutdowns. M&A activity as a whole slowed significantly for about a month. However, after several weeks, Mariner Capital Advisors started noticing that private equity investors were still aggressively seeking to acquire companies that were faring well despite the economic environment. During this period, TFM had performed quite well, because a significant portion of their client base was comprised of grocery stores thanks to Russell’s background. Fortunately many of these client businesses remained open and therefore required additional cleaning and sanitation services. After putting the process on hold for several weeks, Mariner Capital Advisors continued its process and quickly received significant interest from private equity investors.
Mariner Capital Advisors took advantage of the renewed interest in TFM by running a competitive process in which we quickly received six formal acquisition offers. To help Russell assess each offer, Mariner Capital Advisors performed a comparative transaction analysis to help him understand how the structure of each offer would impact after-tax proceeds. By creating a competitive process, Mariner Capital Advisors was able to drive a premium valuation with a very favorable structure for Russell.
Gen Cap America, a Nashville-based private equity firm acquired TFM in July of 2020. Mariner Capital Advisors acted as the exclusive financial advisor to TFM in the transaction. Gen Cap America, which had an investment in the facilities management space at the time, was prepared and willing to provide resources needed to help TFM expand geographically and modernize the business.
About TFM Services
TFM is a Wichita, Kansas-based facilities services and maintenance company founded by Russell Thrash in 1987. Since its founding, TFM Services has become a regional industry leader and now serves customers across a variety of industries in Kansas, Missouri, Nebraska and Oklahoma. TFM offers a wide range of services, including floor care, janitorial, concrete restoration, power washing, window washing, aerial cleaning and landscaping. Patrick Phillips, who joined TFM in 2005 before assuming the role of vice president, will serve as president of TFM post-transaction.
About Gen Cap America
Gen Cap America is a private investment firm based out of Nashville, Tennessee, that focused on middle-market and lower-middle market companies. Gen Cap America was founded in 1988, and specializes in acquisitions and recapitalizations of companies with quality management teams. Gen Cap America focuses on investments in Manufacturing, distribution and basic service industries.
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