Rise Capital, the Raleigh-based investment business led by Harry Smith, Travis Stephenson and Dale Jenkins, bought Fortune Electrical Construction, a 150-employee contractor in Fort Myers, Florida.
It is Rise Capital’s first acquisition outside of North Carolina. Its four other holdings include Pitt Electric, a commercial electrical contractor with offices in the Charlotte, Greenville, Triangle and Wilmington areas.
Rise started talking about the deal with Fortune leaders about four months ago, Smith says. There was considerable interest from potential buyers in the company, which was founded in 2005. Terms weren’t disclosed, but Rise paid cash and continues to operate with no debt, benefiting from cash flow produced by its companies, Smith says.
“We like that there are lots of barriers to entry in the electrical contracting space,” Smith says. Fast growth in southwest Florida and increasing retirements among electricians also creates opportunity, he adds.
“Our goal is to add two or three high quality assets a year,” and achieve $500 million in annual revenue over the next five years. Target companies extend beyond North Carolina to Texas and other Sunbelt states, he says.
Smith started Rise after spending much of his career in the air filtration business, including a stint as CEO of publicly traded Flanders Filters, which was based in Washington in Beaufort County. He’s best known as former chair of the UNC System Board of Governors.
Since leaving the board, Smith has focused on his business interests, while remaining vocal on state political issues. He’s also been a backer of N.C. House Majority Leader John Bell, a Goldsboro Republican who is employed by Smith’s company. Bell is president of Rise Capital-owned Asterra Labs, which makes over-the-counter CBD products.
Bell was considered a potential successor to House Speaker Tim Moore, who is leaving the legislature to run for Congress. But last week, Bell and top House Republican leaders said they had consolidated support for House Rules Committee Chair Destin Hall, a Lenoir Republican, to become the next speaker.
Moore has favored Hall as his successor. Hall said he would press Bell to take over the influential Rules Chair post next year, reflecting their friendship.
Bell says the opporrtunty to take on more leadership at Rise, while retaining a key Jones Street post, prompted his decision to support Hall. The potential to attend his 9-year-old daughter’s volleyball games, without the pressure of the Speaker position, also counts, he adds.
Smith says he’s pleased with the outcome and that he had encouraged Bell to focus on his business career. “The atmosphere in Raleigh is caustic right now. I told John that we have too good of a thing going in our business right now.”