Why This Matters to Distributors: KLH Capital’s investment could help N.H. Yates expand its inventory, product offerings, and geographic reach. For HVAC and plumbing wholesalers that buy from Yates, those investments could improve product availability. KLH also plans to pursue acquisitions, potentially expanding Yates’ role in the distribution channel.
KLH Capital has completed the recapitalization of N.H. Yates & Co., providing capital for the HVAC and plumbing distributor and manufacturer’s representative to expand its product offerings, inventory, and territory.
The Tampa, Florida-based private equity firm announced the transaction Oct. 9. Financial terms were not disclosed. Jon Thomas, owner and CEO, and Dan Kelbaugh, owner and chief operating officer, will continue to lead Yates with its senior management team and remain significant shareholders, according to KLH.
Founded in 1949 and based in Hunt Valley, Maryland, Yates distributes heating, ventilation, and air conditioning equipment, plumbing products and hydronic equipment. Its products include pumps, circulators, boilers, water heaters, valves, press fittings, installation tools, gas regulators, and thermal energy storage tanks.
Yates serves industrial, commercial, data center and residential markets across the Mid-Atlantic and Southeast. Its manufacturer lineup includes Taco, A.O. Smith, Conex, and Flex-Hose. The company has represented Taco since its founding.
The company supplies wholesale distributors, contractors, and end users from warehouses in Maryland, Pennsylvania and North Carolina. It stocks imported products that otherwise would require lengthy overseas lead times and provides sales coverage, specification support and technical training for the manufacturers it represents. Yates also helped introduce Conex flame-free press fittings to the U.S. market in 2017.
Thomas said the partnership will give Yates resources to add product lines, increase inventory and enter new territories.
Kelbaugh said the investment will support additional product offerings and growth in the company’s data center business.
KLH identified several sources of demand for Yates’ products: replacement of aging HVAC and plumbing systems, stricter energy-efficiency standards, contractor interest in labor-saving products and data center construction requiring thermal storage and hydronic cooling.
Brad Gates, an operating partner at KLH, said seven of Yates’ 10 largest customers have purchased from the company for more than 20 years. KLH plans to work with management to add manufacturers, expand geographically and pursue acquisitions, he said.
The investment supports a business that combines stocking distribution with manufacturer representation. Yates supplies wholesalers while also selling to contractors and end users, giving it several routes to market for the products it carries.
Expanded inventory could improve availability for customers buying imported hydronic products, while acquisitions could broaden Yates’ product offerings and geographic coverage. KLH did not identify acquisition targets or provide a timetable.
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