Ara Partners Announces Sale of Priority Power to I Squared

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Jul 30, 2024, 09:45 ET

BOSTON and HOUSTON, July 30, 2024 /PRNewswire/ -- Ara Partners, a global private equity firm that is decarbonizing the industrial economy, today announced the sale of Priority Power Management, Inc. ("Priority Power"), to funds advised by I Squared Capital ("I Squared"). Under the terms of the agreement, I Squared's Global Infrastructure Fund III will acquire Priority Power from Ara Partners, Oaktree Capital Management, L.P. and other shareholders. Brandon Schwertner will continue as the Chief Executive Officer and remain an equity holder in the company following the completion of the transaction.

Priority Power was founded in 2001 and is one of the largest independent providers of turnkey energy management services for commercial and industrial customers with approximately 10,000 customer contracts, a 95% customer retention rate and customers across more than 40 U.S. states. Priority Power provides energy management services to help customers reduce their energy costs, improve energy efficiency, achieve reduced emissions and access secure, reliable energy. Ara Partners invested in Priority Power in 2019 and has worked closely with the company's management team to launch and expand key business lines (including the formation of the company's renewable development and energy curtailment service offerings as well as the growth of the remote asset management services business), refine the company's M&A strategy, advise on key hiring decisions and facilitate the company's initial debt financing.

"At Ara Partners, we look to bring technical, operational, and private equity investing expertise to maximize decarbonization results while advancing the development of businesses with high-value, sustainable long-term models," said Troy Thacker, Managing Partner at Ara Partners. "Priority Power is one of the leading forces enabling commercial and industrial customers across North America to optimize their energy usage and decarbonize. Through Ara's investment, and our close partnership with Priority Power's exceptional team, we are proud of the economic and environmental gains we have been able to realize. We are confident that Priority Power will continue contributing to a lower carbon economy."

Brandon Schwertner noted, "We have greatly valued Ara's partnership and the team's ability to support us in institutionalizing our business, participating in the development of our M&A strategy, and supporting the measurement of our decarbonization progress. I am confident that the strong foundation laid by Ara Partners will continue to drive our success as we embark on our next chapter with I Squared."

John Bick, Priority Power's Executive Chairman and Senior Advisor, added, "We were excited about Ara's investment given the firm's strategic perspective, strong commitment to decarbonization and ability to foster a culture of innovation. Through Ara's partnership, we have been able to offer our customers additional solutions and expand into new markets. I am extremely proud of what the team has accomplished alongside Ara's strategic support."

Ara's investment in Priority Power was made through Ara Fund I. The global private equity platform has completed 28 investments in that period across the industrial decarbonization space. The team is currently deploying Ara Fund III, a $2.8bn vehicle raised in 2023, and has been active in the U.S. and Europe in recent months with transactions including the acquisition of a majority stake in Vacuumschmelze ("VAC"), a leading global producer of advanced magnetic solutions, rare earth permanent magnets, and inductive components that are crucial for the decarbonization of our planet. Across its portfolio, Ara reduced emissions by an estimated 10.8m metric tonnes of CO2 equivalent and eliminated an estimated 424.4k metric tonnes of waste in 2023.

Jefferies LLC served as lead financial advisor and BMO Capital Markets served as a financial advisor to Priority Power in connection with the transaction. BofA Securities served as exclusive financial advisor to I Squared. Latham & Watkins LLP served as legal counsel to Priority Power and White & Case LLP served as legal counsel to I Squared.

About Ara Partners
Ara Partners is a global private equity and infrastructure investment firm focused on industrial decarbonization. Founded in 2017, Ara Partners seeks to build and scale companies with significant decarbonization impact across the industrial and manufacturing, chemicals and materials, energy efficiency and green fuels, and food and agriculture sectors. The company operates from offices in Houston, Boston, Washington, D.C., and Dublin. Ara Partners closed its third private equity fund in December 2023 with over $2.8 billion in capital commitments. As of March 31, 2024, Ara Partners had approximately $6.2 billion of assets under management. For more information about Ara Partners, please visit www.arapartners.com.

About Priority Power
Priority Power is one of the largest independent providers of turnkey energy management services for commercial and industrial customers in the U.S. The Company helps businesses procure energy that meets their cost and sustainability goals; monetize flexibility in their load to reduce their energy costs; and upgrade their facilities' energy infrastructure to make their operations less costly, more resilient and more sustainable. Founded in 2001 and headquartered in The Woodlands, Texas, Priority Power manages energy for more than 8,500 clients across the U.S. and has developed over $900 million of private transmission and distribution infrastructure for its customers. For more information on Priority Power, please visit www.prioritypower.com.

Media Contacts

For Ara:
Scott Bisang / Jack Kelleher
Collected Strategies
[email protected]

SOURCE Ara Partners