Kingsway announces acquisition of Roundhouse for $22.4M

Kingsway Financial (KFS) Services announced the acquisition of Roundhouse Electric & Equipment for a purchase price of $22.4M, plus transaction expenses and a working capital adjustment. Roundhouse provides mission-critical services, including field maintenance and testing as well as in-shop motor repair, primarily to midstream natural gas pipeline operators and utilities across the Permian Basin. The company’s operations are characterized by strong customer retention, excellent response times, and meaningful integration into client workflows. Roundhouse has more than 200 active customers, and approximately 90% of revenues are either recurring or reoccurring. The company’s unaudited revenue has more than doubled over the last two years, with unaudited adjusted EBITDA growing ahead of revenue over the same period. Lingsway believes Roundhouse has considerable further growth potential in the years ahead, underpinned by the twin structural growth drivers of increased natural gas pipeline flows in the Permian Basin and the shift from legacy gas-powered motors to more-efficient electrical motors. Kingsway intends to support Roundhouse with strategic investments in people, systems, and regional expansion to meet accelerating customer demand and enhance service delivery. The transaction closed on July 1, and was funded with $10.4M in cash on hand and $11M from a senior credit facility. As part of the transaction, the selling shareholders are maintaining an economic interest in the go-forward entity, reflecting their continued belief in the company’s long-term prospects and their alignment with Kingsway’s growth vision. Miles Mamon, Kingsway’s Operator-in-Residence who sourced and led the transaction for Kingsway, will assume the CEO role at Roundhouse.