Good morning, Hubsters. Senior reporter Michael Schoeck here with the US edition of the Wire from the New York newsroom.
We’re opening the Wire today with a deep dive by Obey Martin Manayiti on AE Industrial Partners’ recent exit of engineering firm CDI Corporation in seven pieces.
Next up John R. Fischer has an exclusive on a revenue cycle management deal that was announced this morning.
And we’ll wrap up with insight on what’s driving fleet management and transportation technology investments.
Divestiture spree
Earlier in January AE Industrial Partners announced the sale of CDI Engineering Solutions to Tata Consulting. The exit marked the last stage of a journey that started in 2017 when AEI bought CDI Corp, a provider of engineering, information technology and staffing services, in a take-private deal worth $157.5 million.
Since then, AEI went on a divestiture drive, selling the company’s seven business units one by one to strategic buyers – a departure from the PE firm’s usual buy-and-build playbook. Through the seven sales to strategic buyers, AEI made 25x its money on CDI Corp, according to a source familiar with the deal.
To find out more, PE Hub connected with AEI managing partner Jon Nemo.
“In the end, our thesis that these were all very strategic units was validated by the fact that we were able to exit all of them to a strategic home,” Nemo said, adding that the plan was to optimize each unit organically and then sell to a strategic buyer.
The firm did not do any add-ons, “and this was unusual for AE Industrial,” he added. “Usually, we are buying and building, and some of our portfolio companies complete over 10 add-on acquisitions to build up, and then we sell.”
Nemo declined to discuss returns, but, reportedly, the early exits helped the firm recycle the capital so as to produce a large return.
In 2017, shortly after closing the deal for CDI Corp, Belcan, a Cincinnati-based portfolio company of AE Industrial, acquired CDI’s aerospace and industrial equipment business unit in the first divesture for the company.
In 2018, AEI acquired Gryphon Technologies, a Washington, DC-based defense engineering and technical services firm, which it then merged with CDI Government Services. Gryphon Technologies was later sold to ManTech in 2021 for $350 million.
In 2018, CDI sold its Talent & Technology Solutions business unit to Artech Information Systems. Artech is a workforce services company based in Morristown, New Jersey.
In 2019, MRI Network Holdings acquired Management Recruiters International from CDI Holding, an affiliate of CDI Corporation.
In 2020, BG Staffing, a workforce solutions provider, acquired EdgeRock Technology Partners for $21.6 million cash. EdgeRock was a unit under CDI.
In 2021, LR Kimball – an architecture and engineering firm offering multi-disciplinary services to both public and private-sector clients, and formerly a division of CDI Engineering Solutions – was acquired by TransSystems.
And finally, in 2025, AE Industrial sold CDI Engineering Solutions to Tata Consulting Engineers.
Fusing revenue cycle management
InTandem Capital Partners announced earlier this morning that it has acquired Healthfuse, a revenue cycle management (RCM) vendor manager, from New Capital Partners, PE Hub has learned.
PE Hub spoke with InTandem senior partner Brad Coppens in an exclusive interview about the New York-based firm’s plans for the company.
Based in Milwaukee, Healthfuse uses its proprietary software to automate vendor management for front-end, mid-cycle and back-end RCM providers, using performance management and price benchmarking metrics to improve collections and ensure compliance. The company says it has generated over $1.5 billion in bottom-line improvements, to date, and 15:1 return on investments for customers.
Healthfuse has grown organically at an average of 20 percent annually or more since its founding in 2011 and wrapped up its largest growth year in 2024. Company co-founder and CEO Nick Fricano and the management team, who remain as minority investors, are aiming to work with InTandem to further scale the company’s size and value creation.
For this task, Coppens said the key is to increase potential customers’ familiarity with Healthfuse’s services, with add-ons playing a crucial role. The firm sees opportunities to scale the platform to address other hospital pain points, including in IT vendor management; vendor compliance from a security or HIPAA point of view; and payor contract management.
“It can also be effective in other care settings partially or wholly owned by hospitals and health systems,” said Coppens. “Today, Healthfuse focuses on inpatient hospital operations but moving to ambulatory surgery centers, physician partnerships, radiology and labs make sense too because all these care settings have similar RCM vendor management needs, as does the hospital.”
Driving fleet management efficiencies
A confluence of factors ranging from retiring truck drivers, streamlining shipping routes and a lack of digital tools for the transportation sector have contributed to increased investor interest in the off-road transportation software technology market, according to a new Houlihan Lokey report.
Shane Kaiser, a managing director in Houlihan’s technology group, told PE Hub for M&A deals, the off-road technology market typically sees companies reach platform investment size at about $15 million of annual revenue, while typical add-on deals for PE-backed companies involve companies with up to $2 million of EBITDA, or slightly larger for transformational deals.
These technology providers create route planning efficiencies and reduce downtime among fleets, while enabling preventative maintenance and let commercial and industrial users to monitor store and warehouse inventory levels.
Off-road technology players backed by PE investors include Inverness Graham-backed GPS Trackit, Accel-KKR-backed GPSInsight, and LLR Partners-backed Linxup, according to sources familiar with the market.
One recent deal for an off-road technology provider include Powerfleet’s October closing of a $200 million deal to acquire Fleet Complete, a connected vehicle and fleet management software provider with 600,000 fleet customers backed by the Ontario Teachers’ Pension Plan (OTPP). Upon closing, Powerfleet said the deal creates a $400 million combined revenue platform with $85 million of EBITDA.
To access the full Houlihan Lokey report click here.
That’s a wrap for me. Keep an eye out for the Europe edition of the Wire tomorrow from Sophie Rose and the US edition from John R. Fischer.
Cheers,
Michael
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