San Angelo's Bright PEU Lights

In November 2024 I wrote about private equity's interest in West Texas energy deals.  Eight days later Businesswire reported:

Wynnchurch Capital, L.P. (“Wynnchurch”), a leading middle-market private equity firm, announced today that it has acquired Principal Industries, LLC (“Principal” or the “Company”) alongside Principal’s founders, Bryan and Blake Vincent, as well as the management team.

The local company received a $550,000 economic development incentive from the City of San Angelo Development Corporation in 2017.  Those funds enabled Principal Industries to move into a vacant building in the city's Industrial Park.

Principal Industries had five funding rounds since its inception and expanded through acquisitions. Principal bought SloanLED in 2022 and the company's website is www.principalsloan.com

The company's acquisition by Wynnchurch Capital, a private equity underwriter (PEU), occurred during a time of increased interest in San Angelo and West Texas, according to Chamber of Commerce VP Michael Looney.  He shared this with Development Corporation Council last October. 

This is the use and parlaying of private investment, private equity, on the projects we have in process or those that we are aspiring to have in process. This serves as an accoutrement to half cent sales tax dollars. We're finding that private equity is very hungry for positions within tertiary markets, like San Angelo, and oftentimes they don't necessarily want to share any market positions with municipalities, which is not necessarily a bad thing.

VP Looney noted: 

We are well into discussions with the development of speculative buildings within the Business Park. That goes along with several private equity investment companies we are working with. 

His "value proposition" close included: 

Access to private equity relationships

I sought public information on PE backed speculative building development in the Industrial Park on 11-6-24.  The city asked for an exception from the Texas Attorney General's Office.  The AG will determine what information the city has to release on 2-17-25.

Exercising political influence and tapping government coffers have been two key success factors for many PEUs.  As Looney noted "they don't necessarily want to share any market positions with municipalities."  If PEUs don't want their information public, maybe they shouldn't seek public subsidies, direct or indirect.   

Update 1-25-25:  Transparency is an issue in Kentucky over illicit handling of state retirement investments by PEUs KKR and Blackstone.  Private equity underwriters consider almost everything they do as a trade secret, even their fleecing of taxpayers and retirees.

Update 3-5-25:  The AG's office finished their review and the city shared that response yesterday, nearly four months after submission.  The developer of the spec building in the industrial park is Wheelhouse Commercial Development LLC and related company NAI Wheelhouse.  The Lubbock based property developer completed a number of projects in San Angelo, many retail establishments around the Sam's Club.  There were no references to private equity firms in the PIR  release.