(New York, NY) – Cortec Group (“Cortec”), a New York-based private equity firm that focuses on investing in and growing entrepreneur-led middle market specialty consumer, business-to-business, distribution and healthcare services, and products companies, announced that on January 17, 2020, a group led by its affiliate, Cortec Group Fund VII, L.P. (“Cortec Fund VII”), in partnership with Matt Malone and his management team, completed the growth recapitalization of Groundworks, LLC (“Groundworks” or the “Company”). Terms of the transaction were not disclosed.
Headquartered in Virginia Beach, VA, Groundworks is the nation’s leading vertically integrated foundation services company. The Company serves primarily the single-family residential market, providing a critical suite of services to homeowners which preserve home value, integrity and safety, including foundation repair, basement waterproofing, crawl space repair and encapsulation, and concrete lifting. Groundworks currently operates under 13 distinct locally operated brand names which serve customers across 22 states, predominantly in the Mid-Atlantic, Southeast, Midwest, and Mountain West regions of the U.S.
Under the leadership of Matt Malone, Chief Executive Officer and Founder of Groundworks, the Company has transformed the foundation services industry, scaling rapidly and successfully through organic growth and acquisitions to become a unique national platform built on the power of locally respected brands and over 1,450 dedicated employees. Matt Malone commented: “In late 2019, we began a search for the best partner to assist me in accelerating our mission of evolving the foundation services industry. We wanted a partner who had a proven track record of helping entrepreneurial management teams build their high-growth companies and felt that Cortec was best equipped to help us further realize our vision of building a national foundation services business. Beyond their very successful investment record, they brought relevant operational and financial resources as well as a deep appreciation for our business model and company culture.” Malone concluded: “Our entire management team, including the former owners of many of the businesses we have acquired, remain significant equity holders of Groundworks and are very enthusiastic about the future.”
David Schnadig, Co-President of Cortec, stated: “Since their first acquisition in 2016, Matt Malone and his team have successfully executed their laser-focused strategy to lead the foundation services industry by delivering consistent excellence to the customer. Our meaningful experience working with entrepreneurs, particularly in the consumer services space, helped us quickly understand the uniqueness of Groundworks’ transformational business model and drove our excitement to partner with Matt and his team.” Michael Najjar, a Managing Partner at Cortec, added, “In addition to fostering organic growth, Cortec looks forward to supporting Groundworks as it continues to consolidate the industry by executing on its robust pipeline of acquisitions of regional and local foundation services providers.
The Groundworks investment represents the second growth-focused platform in Cortec Fund VII, a $2.1 billion fund which closed in November 2019. Paul Hastings LLP served as legal advisor to Cortec. Senior debt to support the investment was provided by Twin Brook Capital Partners, Golub Capital, Adams Street Partners, Capital One N.A., and First Eagle Investment Management. Harris Williams served as financial advisor and Moore & Van Allen PLLC served as legal advisor to Groundworks.
About Groundworks
Groundworks is the nation’s largest privately held foundation services company and is comprised of leading brands, including Complete Basement Systems®, Florida Foundation Authority™, Foundation Recovery Systems™, Foundation Repair of Western Colorado®, Indiana Foundation Service™, Innovative Basement Authority™, JES Foundation Repair™, Mount Valley Foundation Services®, Ohio Basement Authority™, Ohio Basement Systems™, Tar Heel Basement Systems®, A-1 Sewer & Drain™, Independence Materials Group™, and Bizwiz Software™. Since 1986, the combined companies have helped more than 250,000 homeowners protect and repair their most valuable asset, their home. Groundworks operates across twenty offices that serve Arkansas, Colorado, Florida, Georgia, Indiana, Illinois, Iowa, Kansas, Maryland, Minneapolis, Missouri, Montana, Nebraska, North Carolina, North Dakota, Ohio, South Carolina, Virginia, West Virginia, and Wisconsin. The Company has been named to the Inc. 5000 Fastest Growing Companies and Best Places to Work numerous times. Additional information about Groundworks can be found at www.groundworkscompanies.com.
About Cortec
Founded in 1984, Cortec invests in market-leading, middle-market specialty consumer, distribution, healthcare and specialty services and products businesses in partnership with owners and management teams who want to work with Cortec to drive growth and improve business fundamentals. More information about Cortec can be found at www.cortecgroup.com.
