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Kingsway Completes Acquisition of Roundhouse Electric & Equipment, Strengthening Growth in Industrial Sector

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FAQsIR News Desk
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CHICAGO, IL – Kingsway Financial Services Inc. has finalized its acquisition of Roundhouse Electric & Equipment Co., Inc. for a total of $22.4 million. This strategic move reflects Kingsway's commitment to expanding its presence in the industrial sector, particularly in the arena of electric motor maintenance and repair.

#About Roundhouse Electric & Equipment

Roundhouse, headquartered in Odessa, Texas, specializes in providing comprehensive services related to industrial-scale electric motors. Their offerings include maintenance, repair, testing, and sales, primarily serving midstream natural gas operators and utility companies in the Permian Basin. The company has shown impressive growth, with its unaudited revenue more than doubling in the past two years.

#Transaction Details

The acquisition, completed on July 1, 2025, was funded through a combination of $10.4 million in cash and $11 million sourced from a senior credit facility. Along with the purchase price, transaction expenses and a working capital adjustment were included. The selling shareholders will retain an economic stake in the business, demonstrating their confidence in its long-term potential.

#Growth Prospects and Strategic Support

Kingsway’s leadership sees substantial growth prospects for Roundhouse. The anticipated increase in natural gas pipeline flows and the transition to more efficient electric motors are expected to serve as key drivers for further expansion. Kingsway plans to invest in strategic resources to enhance Roundhouse’s customer service and operational capabilities.

#Leadership Changes

Miles Mamon, who was instrumental in spearheading the acquisition, will take over as CEO of Roundhouse. He succeeds Lee Hudson, who co-owns Roundhouse and will continue to serve in the role of President. This leadership transition aims to ensure continuity and leverage Kingsway's operational strengths.

#Company Reactions

The acquisition has garnered positive feedback from both Kingsway and Roundhouse leadership. JT Fitzgerald, Kingsway's President and CEO, expressed confidence that Roundhouse’s established customer relationships and service culture align well with Kingsway’s growth strategy. Meanwhile, Hudson and Armando Gonzales, co-founder, reiterated their excitement about the future prospects under Kingsway's stewardship.

#Key Takeaways

  • Kingsway Financial Services has acquired Roundhouse for $22.4 million, bolstering its industrial portfolio.
  • Roundhouse reported significant growth in revenue and has a high percentage of recurring income.
  • The transaction was funded through cash and a senior credit facility.
  • Miles Mamon will lead Roundhouse as CEO post-acquisition.
  • Kingsway aims to support Roundhouse's growth with strategic investments and resources.

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Frequently Asked Questions

Kingsway has successfully acquired Roundhouse for $22.4 million, a company noted for its growing industrial electric motor services. With significant revenue growth and strong recurring income, this acquisition aligns strategically with Kingsway's focus on capital-light businesses.
Roundhouse has demonstrated robust financial growth, more than doubling its unaudited revenue over the past two years, with an adjusted EBITDA that has also outpaced revenue growth. Such performance indicates its solid market position and potential for continued expansion.
Kingsway expects Roundhouse to benefit from increased natural gas pipeline flows in the Permian Basin and a transition to more efficient electric motors, which could significantly enhance its growth trajectory in the coming years.
Kingsway's plan includes investing in personnel, systems, and regional expansion for Roundhouse, aimed at meeting rising customer demand and improving service delivery, thereby fostering further growth.
Roundhouse's business model, characterised by over 90% recurring or reoccurring revenue, positions it favourably for stability and predictable cash flows, which are attractive to investors seeking sustainable growth.
Miles Mamon, who played a crucial role in the acquisition, will take on the role of CEO at Roundhouse, ensuring leadership continuity while bringing in Kingsway's strategic oversight.
Kingsway's unique Search Fund model enables it to identify and acquire high-quality businesses like Roundhouse, allowing for focused growth and value creation which can enhance long-term shareholder value.
This acquisition reinforces Kingsway's strategy of building a portfolio of asset-light, high-growth companies, enhancing its market position while continuing to pursue opportunities for value creation in the services sector.