Gryphon Investors to Sell Shermco to Blackstone in $1.6 Billion Transaction

Rhea-AI Summary

Blackstone (NYSE: BX) has agreed to acquire Shermco from Gryphon Investors in a transaction valued at $1.6 billion. Shermco, headquartered in Irving, TX, is a leading electrical testing organization providing maintenance, repair, testing, and engineering services across 40 service centers in the U.S. and Canada.

The company employs over 600 NETA technicians and 200 engineers, serving data centers, utilities, and various commercial and industrial markets. Under Gryphon's ownership since June 2018, Shermco achieved two-fold revenue growth and significant operating margin improvements through organic growth and strategic acquisitions.

Positive

• None.

Negative

• Blackstone faces integration challenges and execution risks
• High transaction value may impact return on investment expectations

Insights

Private Equity Analyst

Blackstone's $1.6B Shermco acquisition expands its infrastructure portfolio with a critical electrical services provider showing strong growth.

Blackstone's $1.6 billion acquisition of Shermco represents a strategic move into the critical electrical infrastructure services sector. This transaction showcases Blackstone's continued focus on essential infrastructure assets with stable cash flows and growth potential.

Shermco has demonstrated impressive performance under Gryphon's ownership since 2018, achieving two-fold revenue growth and margin improvements. The company serves high-value sectors including data centers and utilities - areas experiencing substantial growth due to digital transformation and energy grid modernization.

What makes Shermco particularly valuable is its specialized workforce of 600+ NETA technicians and 200 engineers across 40 service centers, providing mission-critical maintenance services that prevent costly downtime. The acquisition fits Blackstone's strategy of investing in businesses with recurring revenue models and essential services that remain in demand regardless of economic cycles.

The $1.6 billion valuation likely represents a significant return for Gryphon, which typically targets middle-market companies. This transaction continues Blackstone's pattern of acquiring specialized service providers that support critical infrastructure - a sector with increasing demand driven by aging infrastructure, reliability requirements, and the expansion of data centers supporting AI and cloud computing.

SAN FRANCISCO, Aug. 21, 2025 /PRNewswire/ -- Gryphon Investors ("Gryphon"), a leading middle-market private investment firm, announced today that it has entered into a definitive agreement to sell its portfolio company Shermco ("the Company"), a leading player in electrical testing, engineering, maintenance and repair, to private equity funds affiliated with Blackstone (NYSE: BX). The transaction is valued at approximately $1.6 billion.

Founded in 1974 and headquartered in Irving, TX, Shermco is one of the largest electrical testing organizations accredited by the InterNational Electrical Testing Association ("NETA"), providing comprehensive electrical system maintenance, repair, testing, commissioning, and engineering & design services, with more than 600 NETA technicians and 200 engineers across 40 service centers in the U.S. and Canada. Shermco provides critical services for data centers, utilities and other diversified commercial and industrial end-markets, partnering with customers to enhance the safety, reliability and efficiency of their critical electrical infrastructure, while minimizing downtime and outages.

Gryphon, which made its initial investment in Shermco in June 2018, partnered with CEO Phil Petrocelli and other members of Shermco management to achieve strong organic growth and operating margin improvement at Shermco, while also building through add-on acquisitions.

Alex Earls, Partner and Co-Head of the Business Services Group at Gryphon, said, "We are proud of the exceptional business building and financial performance achieved by Shermco management, including two-fold revenue growth under Gryphon's ownership. We are pleased that Blackstone recognized the strength of Shermco's platform and believe the firm will be an excellent partner for Shermco management in its next phase of growth."

Mr. Petrocelli commented, "With Gryphon's support and operational expertise, Shermco has become a highly valued partner for its blue-chip customer base. We look forward to pursuing organic initiatives and making additional add-on acquisitions in partnership with Blackstone."

Harris Williams served as lead financial advisor to Shermco and Kirkland & Ellis acted as legal advisor to Gryphon.

About Gryphon Investors

Gryphon Investors is a leading middle-market private investment firm focused on profitably growing, competitively advantaged companies in the Business Services, Consumer, Healthcare, Industrial Growth, Software, and Technology Solutions & Services sectors. With more than $10 billion of assets under management, Gryphon prioritizes investments in which it can form strong partnerships with founders, owners, and executives to accelerate the building of leading companies and generate enduring value through its integrated deal and operations business model. Gryphon's highly differentiated model integrates its well-proven Operations Resources Group, which is led by full-time, Gryphon senior operating executives with general management, human capital acquisition and development, treasury, finance, and accounting expertise. Gryphon's three core investment strategies include its Flagship, Heritage, and Junior Capital strategies, each with dedicated funds of capital. The Flagship and Heritage strategies target equity investments of $50 million to $500 million per portfolio company. The Junior Capital strategy targets investments of $10 million to $25 million in junior securities of credit facilities, arranged by leading middle-market lenders, in both Gryphon-controlled companies, as well as in other private equity-backed companies operating in Gryphon's targeted investment sectors.

About Shermco

Headquartered in Irving, TX, Shermco provides electrical testing, maintenance, commissioning and repair services to a wide range of utility, industrial, energy and other end markets. With more than 40 locations, Shermco serves a diversified blue-chip client base across North America. The Company is an active participant in NETA (the InterNational Electrical Testing Association), EASA (Electrical Apparatus Service Association), and ACP (American Clean Power Association). For more information, visit www.shermco.com.

Contact:
Lambert
Caroline Luz
203-570-6462
cluz@lambert.com
or
Jennifer Hurson
845-507-0571
jhurson@lambert.com

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SOURCE Gryphon Investors

FAQ

How much is Blackstone (BX) paying for Shermco acquisition?

Blackstone is acquiring Shermco in a transaction valued at $1.6 billion.

What is Shermco's market presence and workforce size?

Shermco operates 40 service centers across the U.S. and Canada, employing over 600 NETA technicians and 200 engineers.

How has Shermco performed under Gryphon Investors' ownership?

Under Gryphon's ownership since June 2018, Shermco achieved two-fold revenue growth and significant operating margin improvements through organic growth and acquisitions.

What services does Shermco provide and in which markets?

Shermco provides electrical testing, maintenance, repair, commissioning, and engineering services for data centers, utilities, and various commercial and industrial markets.

Who are the advisors in the Blackstone-Shermco transaction?

Harris Williams served as lead financial advisor, and Kirkland & Ellis acted as legal advisor to Gryphon.