European private equity firm (PE) Triton plans to invest up to €1 billion ($1.05 billion) to accelerate the growth of natural refrigerant manufacturers and contractors, according to Friedrich Ysenburg, an Investment Professional at the company.
Founded in 1997, the firm’s portfolio includes over 50 companies. In January, Triton, seeking to become a market leader in sustainable refrigeration technology, launched Bluu Unit, an alliance of German HVAC&R contractors.
“We’ve raised over €18.5 billion [$19.36 billion] in capital to invest in companies across industries that are changing for the better,” Ysenburg said in an investor’s panel at the ATMO Europe Summit 2024. “In the past two and a half years, we’ve gone from investing €17 million [$17.8 million] in natural refrigerant companies to over €100 million [$104.6 million], with the ability to dedicate up to €1 billion to companies [in this space].”
The event, organized by ATMOsphere, was held November 25‒26 in Prague, the Czech Republic. ATMOsphere is the publisher of NaturalRefrigerants.com.
Other participants joining Ysenburg on the panel included Ted Amyuni, Senior Industry Expert at Triton; Frank Jansing, CEO of Bluu Unit; and Timo Kivilaht, Senior Vice President of the Global Solutions Engineers at Kelvion, a manufacturer of heat exchangers.
Triton’s strategy
According to Ysenburg, Triton’s investment in the HVAC&R sector supports sustainable cooling solutions to meet the increasing cold chain demand and the ramp-up of global digitalization.
“We love this market for its NAFG [net avoided fossil emissions] efficiency and its ability to reduce f-gases ‒ outlined by the EU Green Deal ‒ and support companies pursuing strict ESG [environmental, social and governance] strategies,” Ysenburg said. Moreover, he indicated that PFAs (per- and polyfluoroalkyl substances) are a concern the firm wants to better understand and, as such, has started conducting PFAs audits.
“We want to build great natural refrigerant manufacturers that will exist for a long time,” Ysenburg said. “With our toolbox of capabilities, we help them transform and scale.” He indicated that the firm involves senior industry experts like Amyuni to develop a game plan to grow acquired manufacturers or contractors, intending to exit its investments within seven to 10 years.
The Kelvion example
Triton acquired Kelvion, a global industrial heat exchange manufacturer headquartered in Germany, in 2014. The manufacturer provides heat exchangers for CO2 (R744) and ammonia (R717) systems. According to Kivilaht, the company has experienced a “significant” increase in market demand, driven by new management practices and production processes implemented with the help of Triton and the the EU F-gas regulation.
“It’s a transformative success story,” Ysenburg said.
Kelvion factories worked independently before its acquisition, Kivilaht noted. “With Triton’s leadership, we started a journey called ‘One Kelvion’ to create a vision, set priorities and drive procedural alignment.” He added that since implementing standard manufacturing and business processes across its global operations, Kelvion has grown and moved into new regions.
“In regards to making business choices, PE is more agile, more entrepreneurial,” said Amyuni. “They make great sounding boards and coaches for companies to simplify, build a strong base and grow.”
Workforce solution
The shift to natural refrigerants requires a skilled workforce ready to safely manufacture and service ammonia, CO2 and hydrocarbon equipment. Hence, Triton founded Bluu Unit, an alliance of German contractors specializing in natural refrigerants.
The bluu unit alliance seeks to support companies through expertise, financial investment and a continuous transfer of natural refrigerants knowledge and experience. Since launch in January, nine companies operating in 14 German locations have joined.
“With the regulations and ESG strategies acting as a tailwind, the market is moving toward natural refrigerants,” Jansing said. “The limitation comes from the lack of a skilled workforce.” He mentioned that the alliance has started a training academy to build an apprenticeship program to address the issue.
Although the alliance currently only operates in Germany, it plans to extend to Europe. “There’s money,” Jansing said, inviting contractors in neighboring countries to join Bluu. “Once we know a company fits our DNA, we buy and enable.”
“We want to build great natural refrigerant manufacturers that will exist for a long time.”
Friedrich Ysenburg, Investment Professional at Triton
