#USA #Platinum Equity #Hauppauge #Motors & Armatures #CSW Industrials

Motors & Armatures to Sell Parts Division

Motors & Armatures (MARS), a prominent entity under Platinum Equity’s portfolio, has recently announced the signing of a definitive agreement to divest its parts division to CSW Industrials, Inc. for an impressive $650 million in cash. This sale, expected to conclude by the end of 2025 pending regulatory approvals, marks a significant milestone for MARS. The agreement also includes an earn-out component that could yield an additional $20 million based on future revenue targets.

A Strategic Transformation

Since its acquisition in July 2024, Platinum Equity has orchestrated a major transformation at MARS, steering the company towards growth and revitalization. The parts division, known for its distribution of essential HVAC/R components such as motors and capacitors, will now become part of CSW’s diverse portfolio. Headquartered in Hauppauge, New York, MARS is recognized as a leading distributor in North America, focusing on the parts that keep heating and cooling systems functional.

Chris Windham, the CEO of MARS, will transition to lead the operations of Heat Controller, MARS’ equipment division that remains unaffected by this sale. Expressing optimism about the futures of both the parts division and the equipment segment, Windham shared, "We are proud of the progress we've made and are excited for the growth that lies ahead for Heat Controller."

This transaction is seen as an opportunity for both parties to thrive. MARS Parts will integrate into CSW, benefiting from enhanced resources and a broadened customer base. As outlined by Jacob Kotzubei, Co-President of Platinum Equity, the sale allows MARS to leverage the existing strengths of both companies for ongoing value creation in the HVAC sector.

Insights into MARS Operations

MARS Parts specialized in providing critical components essential for HVAC/R maintenance and replacement. While the parts division is being sold, MARS continues to operate its equipment distribution wing, known as Heat Controller. This division is recognized for its high-quality residential and commercial HVAC products, marketed under the Comfort-Aire and Century brands.

Following various strategic initiatives like expanding into new product categories and enhancing procurement processes, MARS has experienced significant improvements. Recent expansions into product lines such as pads, pans, and accessories have placed the company in a stronger competitive position. Moreover, a focus on recruitment led to the establishment of a robust management team, which includes seasoned professionals from top HVAC manufacturers.

Future Outlook

As both MARS Parts and Heat Controller prepare for their separate journeys, the outlook remains promising. The HVAC industry is poised for long-term growth, with increasing demand for effective heating and cooling solutions. Platinum Equity has expressed its commitment to support Heat Controller's expansion efforts, focusing on enhancing product offerings and broadening market reach through organic growth and strategic acquisitions.

In conclusion, the sale of MARS Parts marks a pivotal change for both Motors & Armatures and CSW Industrials. The parts division's integration into CSW will allow it to flourish while MARS, under the continued guidance of Platinum Equity, will push forward, emphasizing innovation and market responsiveness in its equipment distribution segment. Both entities have set a course for success that could serve as a model for other industry players looking to adapt in an evolving business landscape.