Rheem recently acquired Friedrich Air Conditioning from Monomoy Capital Partners. Mike Branson, president of Global Air at Rheem, answered our questions on how the deal developed and what this means for the company going forward.
ACHR NEWS: How did this deal come about, and what was the driving force behind it?
Branson: We consistently evaluate how Rheem can strategically invest to grow and deliver more innovative and sustainable products for homeowners, businesses, and our contracting partners. The acquisition of Friedrich supports our evolution into new product categories and brings another well-respected brand into our Rheem family. Ultimately, this combination of strategic benefits to Rheem’s business — and a great cultural fit — equated to an ideal opportunity for both parties.
ACHR NEWS: Was the deal made easier by the fact that it was two private entities?
Branson: The acquisition process is typically complex and guided by government regulations, but both entities ensured the process moved forward as planned.
ACHR NEWS: What was the appeal of Friedrich to Rheem’s management?
Branson: Like Rheem, Friedrich has a rich history, strong core values, and began as a family business. Friedrich is an industry leader because of its commitment to a culture of innovation. The addition of Friedrich to the Rheem family of brands complements our existing business lines and increases our commercial and residential air conditioning offerings.
ACHR NEWS: How does this better position Rheem among its competitors?
Branson: The acquisition of Friedrich presents a significant opportunity to Rheem and our contracting partners who will now have access to select products for single-room air solutions, designed specifically for hotels, apartments, and similar spaces. Friedrich has a strong presence in the hospitality industry, and its high-end air conditioners serve the urban multifamily housing market. This complements the existing portfolio of Rheem and our other brands. Additionally, Rheem has a history of investing in and strongly supporting its business units. This acquisition will result in greater capital investment in products and operations, adding value to benefit both Friedrich and its customers.
ACHR NEWS: Do you expect more consolidation in the industry among your peers?
Branson: Growth through acquisition has been a successful approach at Rheem, especially when we bring companies with outstanding cultures and unique product offerings into the Rheem family. While this works well for us, we are not able to speculate on the M&A activities of our competitors.
ACHR NEWS: How will this benefit contractors? Distributors?
Branson: Rheem and Friedrich will both benefit from each other’s innovations and expertise, which will ultimately allow us to broaden and elevate the product solutions we provide to contractors, distributors, and customers for Rheem, Friedrich, and our other brands.
ACHR NEWS: How will Friedrich function within Rheem?
Branson: Friedrich Air Conditioning Company will operate as a stand-alone business under its existing name and leadership as the newest member of the Rheem family of brands. Similar to other Rheem businesses, like Heat Transfer Products Group (HTPG), Friedrich will maintain its headquarters in San Antonio in addition to its current manufacturing and distribution footprints across North America.
ACHR NEWS: Does Rheem plan any more acquisitions in the near future? If not, what are the company’s growth plans?
Branson: Growth by acquisition has always been a key strategy for Rheem and will continue to be instrumental in the way we evolve our business.