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Goldman leads Novacap single-asset deal on heating and ventilation company

It is the second continuation fund deal carried out by the Montreal-based GP, which in October extended its runway with software company Syntax Systems Group.

Novacap, an industrials and TMT-focused private equity investor, has completed its second GP-led deal of the year.

The Montreal-headquartered firm moved heating and ventilation business The Master Group out of 2007-vintage Industries III into a continuation vehicle, according to a statement.

The C$1.1 billion ($850.7 million; €755.3 million) vehicle was anchored by Goldman Sachs Asset Management‘s Vintage funds, alongside other new investors including Fonds de Solidarité FTQ, Fondaction, Portfolio Advisors, Lexington Partners, Blackstone Strategic Partners, Whitehorse Liquidity Partners and iA Financial Group.

“Over the years, we have nurtured deep relationships with the entrepreneurs and their companies,” said Jacques Foisy, managing partner at Novacap, in the statement. “The continuation vehicles allow us to expand our strategic ambitions and build scale in a disciplined manner.”

The 2018-vintage Novacap Industries V also acquired part of the business. A number of shareholders in addition to Fund III also sold their stakes, the statement said. It is not clear whether existing limited partners had the option to roll into the continuation vehicle.

Credit Suisse advised on the process.

Novacap first invested in Master in 2014. Since then the company has quadrupled its revenues, according to the statement. Earlier this year the business entered the US heating and ventilation market with the acquisition of Value-Added HVAC Distributors and three of its subsidiaries.

In May, affiliate title Buyouts reported that Novacap was running a single-asset secondaries process on software company Syntax Systems. The business was held by Novacap TMT IV and Novacap TMT V, 2014- and 2017-vintage funds.

Goldman Sachs also backed that deal, with Credit Suisse advising, according to a statement released on the deal’s close in October.

Novacap has three families of funds, respectively dedicated to TMT, industrials and financial services, according to PEI data. It has C$8 billion in assets under management across the three platforms.

GP-led secondaries deals represented about 60 percent of the $48 billion of secondaries transaction volumes in the first half of the year, according to investment bank Jefferies. Single-asset deals accounted for about 45 percent of that GP-led volume.