Tampa, FL-based private equity firm KLH Capital announced Oct. 9 that it completed a recapitalization of N.H. Yates & Company and its affiliated entities, partnering with management to support the HVAC, plumbing and hydronic equipment distributor’s expansion.

Owner and CEO Jon Thomas, Owner and Chief Operating Officer Dan Kelbaugh and the senior leadership team will continue leading Yates and remain significant shareholders. Financial terms were not disclosed.

KLH characterized the transaction as a majority recapitalization that provided liquidity to existing shareholders, equity participation for key managers and capital for growth. The partnership will support additional product offerings, geographic expansion and strategic acquisitions.

Founded in 1949 and headquartered in Hunt Valley, MD, Yates serves wholesalers, contractors and end users. Its core territory spans the Mid-Atlantic, the Carolinas and Florida, with national reach for select product lines through distribution partnerships. Additional distribution facilities are located in Pottstown, PA and Kernersville, NC. Through its Hydronic Modules business, Yates also designs and assembles custom hydronic systems.

“Dan and I have spent our careers building relationships with the manufacturers we partner with and the customers we serve, and this partnership gives us the resources to add product lines, carry more inventory, and grow into new territories,” Thomas said. “KLH shares our commitment to our employees and to the customers and manufacturers who have trusted Yates for more than 75 years.”

Yates supplies industrial, commercial, data center and residential markets with pumps, circulators, boilers, water heaters, valves, press fittings, installation tools, gas regulators and thermal energy storage tanks. Its manufacturers include Taco, A.O. Smith, Conex and Flex-Hose.

“Our customers count on us to put together the right combination of products for a job and to have it on the shelf when they need it,” Kelbaugh added. “KLH’s support lets us expand our line card, grow our data center business, and keep investing in our people.”

Alongside stocking distribution, Yates provides manufacturers with sales coverage, specification support and technical training. The company has represented Taco since its founding.

KLH identified replacement demand, energy-efficiency requirements, labor-saving products and data center cooling as growth drivers for Yates. The investment was made through KLH Capital Fund V, which raised $400 million in June 2023.

“Seven of the Company’s 10 largest customers have been buying from Yates for more than 20 years, and its position in data center cooling gives it a clear path to keep growing,” said Brad Gates, Operating Partner at KLH. “We look forward to working with Jon, Dan, and the entire Yates team to add complementary manufacturers, expand into new geographies, and pursue acquisitions that extend Yates’ reach.”

Founded in 2005, KLH invests in lower-middle-market businesses across value-added distribution, specialty services and niche manufacturing.