Chicago’s Pritzker, Duchossois and Steans families have teamed up to invest in a Chicago-based retail propane company, Energy Distribution Partners, that’s building a nationwide business.
The families’ investment firms, Pritzker Private Capital led by Los Angeles-based Tony Pritzker, and formerly Gov. J.B. Pritzker (prior to the firm’s separation from Pritzker Group); Duchossois Capital Management steered by Craig Duchossois; and Concentric Investment Partners headed by Jennifer Steans joined together to do the deal, they said in a statement. Financial details, such as the amount of money invested as part of the recapitalization, weren’t released.
Increasingly, such families have been locking arms to do deals, pitching their capital as more desirable for companies, as compared to private-equity firms, because they don’t have to adhere to the 10-year exit timetable that is typically part of the private-equity fund model. Expanding companies often turn to such wealthy clan investors or private-equity firms to raise money to fuel acquisitions.
Concentric was an early investor in EDP with $10 million in 2013 that has grown to $50 million as EDP’s business model held up, even amid the coronavirus pandemic, Steans says by email. EDP has prospered by “delivering essential heating and cooking gas to homes and businesses, which has a utility-like repeatability of cash flows,” she says. “This essential and recurring revenue model has proven out during COVID.”
Energy Distribution Partners, which sells propane services to residential, commercial, industrial and agricultural customers, has been buying smaller outfits in the fragmented industry in a bid to benefit from economies of scale. It has made more than 25 acquisitions, including buying Philipsburg, Pa.-based CMP Energy and Pacific Propane of California, since its inception in 2012.
“This is the ideal long-term partnership to guide EDP into our next chapter,” EDP CEO Thomas Knauff said in the statement regarding the investment.
EDP currently operates 26 regional branches mainly in rural and metropolitan regions across 10 states, including in the Midwest, California and New York.
“On behalf of Concentric, and our primary investor, the Steans family, we’re delighted to join Pritzker Private Capital and Duchossois Capital Management, two like-minded family investment firms, to support a strong, growth-focused business like EDP,” said Ken Hooten, a partner at Concentric.