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Five to 10 times a week, private equity firms send emails to Claire Ferrara, owner and president of Standard Heating & Air Conditioning in Minneapolis, asking her to sell them the business started by her grandfather 95 years ago. “It’s been that way probably about five or six years,” Ferrara said. “Many of them will be repeat offers, the same ones reaching back out. Yeah, it’s been prevalent for a long time.” She has refused to sell because, at age 39, she sees a long future ahead for herself and the company. “I want Standard to be here for another 100 years,” she told me last week. On top of that, she doesn’t believe a private equity owner can provide the same level of service as a local one. “There are tradeoffs in any business situation,” she said. “The person I’m accountable to is the person right in front of me. It’s not someone from a different state or different region or different business. I believe that my employee and my customer really values that they can pick up the phone and talk to me.” Our meeting just happened to be the day after news broke that a private equity owner shut down another venerable Twin Cities company in the adjacent business of home renovation: Minnesota Rusco, which, as its ubiquitous TV and radio jingles reminded us, had been around since 1955. The Dallas company that bought Rusco three years ago, called Renovo Home Partners, shut down at least three other businesses last week. Renovo’s original private equity backer, Audax, formed the company in 2022 by combining home renovation firms in Albuquerque, N.M., New York’s Long Island, and suburban Washington, D.C. The debt used to form and expand Renovo is now held by a fund of BlackRock, the world’s largest asset manager. Private equity firms scoop up companies in various industries — a common industry tactic known as a “rollup” that has sprawled into other personal services like dentistry and veterinary practices — often by issuing debt that they design to be repaid out of the operations of those businesses.
