Mergermarket: Platte River eyes utility services tailwinds with Tallman acquisition

Platte River Equity had been calling on Tallman Equipment for more than five years before acquiring the business last month, according to Peter Calamari, a Managing Director, and Mike Reilly, a Principal, at the Denver-based private equity firm. Tallman was on Platte River's radar because of the historic stability of the utility market and the favorable long-term tailwinds, Reilly said.

Platte River, which takes a thematic, business model-focused approach to investing, has significant experience with power, utility and distribution businesses. Calamari characterized Platte River as having "a core focus in industrials, with expertise in value-added distribution and critical services," noting that utility services have been a focus since the firm's inception in 2006. More recently, the sector has benefited from tailwinds including the need to upgrade the electrical power grid, the data center buildup and the re-shoring trend, Reilly noted.

In a press release announcing the deal, Reilly cited Tallman's customer relationships, field expertise and service-oriented culture as key attractions. Founded in 1952, Tallman was an ESOP company prior to Platte River's acquisition and generates over USD 100m of revenue. Tallman is the sixth investment from Platte River's Fund V, which closed in 2024, with no size disclosed. The acquisition also represents Platte River's 100th transaction overall. Calamari said the sponsor's prior three funds made eight investments each. The firm's typical end markets include automation, infrastructure, safety and power. Almost all investments are in family- or founder-owned businesses with a typical platform size of USD 5m to USD 30m of EBITDA. The sweet spot is USD 10m to USD 15m, Calamari said.

Platte River uses modest debt with a goal of doubling or tripling the scale of a business over a typical five-year holding period, he said. Its value creation playbook leans on acquisitions, as well as investments in salesforce expansion, inventory and other organic growth initiatives. Platte River almost always takes control stakes. In Tallman's case, the firm negotiated the transaction directly with the company. There was no auction process or sell-side advisor, Reilly said. Stephens served as financial advisor to Platte River, with Bartlit Beck providing legal counsel.

Acquisitions on tap

Tallman supplies tools, equipment and related services to utility line workers. Its customers include contractors, investor-owned utilities and electric cooperatives. It operates from a headquarters in Indiana and has additional locations in Illinois and Florida. Tallman has not been especially acquisitive historically, having completed a small acquisition roughly a decade ago, Reilly said. Going forward, however, Tallman "would love to make strategic acquisitions of the right companies in the power utility space," particularly distribution businesses, he added.

Calamari said targets could be located anywhere in the US. Size is flexible, but they would generally be smaller than Tallman. Tallman competes with large national distributors such a Wesco and Grainger, as well as smaller regional players, Reilly said. Tallman "sees itself as a high-touch expert that understands what crews in the field need," he added.

By Marlene Givant Star