Brookfield Announces a Strategic Partnership with Soundcore Capital Partners and Heartland Paving Partners

Rhea-AI Summary

Brookfield Asset Management announces a strategic partnership with Soundcore Capital Partners to accelerate growth for Heartland Paving Partners in the Upper Midwest market. This marks Brookfield's first investment through its private equity sponsor solutions strategy, aiming to provide bespoke solutions to mid-market buyout sponsors.

Insights

Market Research Analyst

Brookfield Asset Management's new partnership with Soundcore Capital Partners represents a strategic move within the niche service sector of commercial paving. This sector is characterized by its fragmentation and stability, which offers a conducive environment for consolidation strategies. The partnership aims to leverage Brookfield's extensive expertise in real asset management to bolster Heartland Paving Partners' position in the Upper Midwest market.

From a market perspective, this collaboration is likely to enhance operational efficiencies and drive economies of scale for Heartland. The partnership is expected to foster a more dominant regional player, potentially increasing market share and influencing pricing power within the industry. Investors may anticipate potential improvements in revenue streams and profitability margins as the consolidation strategy unfolds.

While this move aligns with Brookfield's investment approach, the success of this strategy will largely depend on the effective integration of acquisitions and the management of increased operational complexity. Investors should monitor the execution of this growth strategy and its impact on Brookfield's broader portfolio performance.

Financial Analyst

The entrance of Brookfield Asset Management into a strategic partnership with Soundcore to expand Heartland Paving Partners signifies a noteworthy development for stakeholders. The investment through the private equity sponsor solutions strategy indicates Brookfield's confidence in mid-market buyout sponsors and its commitment to providing growth capital for high performing assets.

Financially, such partnerships are typically designed to create value by unlocking synergies and accelerating growth. For Brookfield, this represents diversification into a stable and essential service sector, potentially mitigating risks associated with more volatile investments. This move could be seen as a positive signal to investors, suggesting a proactive approach to portfolio expansion and risk management.

However, the success of this investment will be contingent upon the ability of Heartland to effectively capitalize on the consolidation opportunities in its market. As such, investors should evaluate subsequent financial disclosures to assess the impact of this partnership on Brookfield's financial health, particularly looking at return on investment and cash flow metrics post-acquisition.

Economist

The strategic partnership between Brookfield and Soundcore highlights a broader economic trend of consolidation within service sectors that exhibit high fragmentation. Economically, such consolidations can drive industry efficiency and potentially lead to more standardized service offerings across the region.

For the commercial paving sector, the partnership could stimulate local economies by creating jobs and fostering business growth as Heartland expands its operations. Additionally, the increased scale of operations may lead to better bargaining power with suppliers and improved service delivery, which could have a positive ripple effect on the regional economy.

However, it is important to consider the potential for reduced competition as a result of consolidation. If Heartland becomes too dominant, there could be concerns about monopolistic behavior and its impact on prices and service quality. Stakeholders, including local businesses and consumers, should be attentive to these dynamics as the partnership evolves.

NEW YORK, April 4, 2024 /PRNewswire/ -- Brookfield Asset Management Ltd. (NYSE: BAM, TSX: BAM), through its private equity sponsor solutions business, Brookfield Sponsor Solutions, today announced a strategic partnership with Soundcore Capital Partners, LP ("Soundcore") and its commercial paving platform, Heartland Paving Partners ("Heartland"). The investment is to accelerate the platform's growth as it pursues further consolidation in the Upper Midwest market.

The transaction marks Brookfield's first investment through its private equity sponsor solutions strategy, which focuses on providing bespoke solutions to mid-market buyout sponsors seeking secondary and growth capital for high performing assets. 

"We are thrilled to partner with Soundcore on the first investment for Brookfield Sponsor Solutions. Together, we look forward to unlocking further growth for Heartland, drawing on Brookfield's experience as one of the world's largest owners and operators of real assets," said Jordan Sawkin, a Managing Director in Brookfield's Sponsor Solutions strategy.

Soundcore has an established track record of creating and methodically scaling platform businesses through its buy-and-build strategy in niche service sectors. Recent platform investments include Heartland and Door & Dock Holdings.

"The partnership with Brookfield is an endorsement of the platforms we consistently build at Soundcore. We are excited to work with one of the world's leading alternative asset managers," said Jarrett Turner, Founder and Managing Partner of Soundcore.

Soundcore acquired the initial Heartland investment in July 2022 and has since completed several acquisitions, expanding operations to become a regional provider of commercial paving services. The company partners with property owners throughout the lifecycle of their parking and other paved surface assets. Operating in a stable, but highly fragmented market, Heartland will benefit from this new strategic partnership and accelerated expansion.

"Brookfield Sponsor Solutions and Soundcore share an investment focus on buy-and-build strategies across essential service sectors such as commercial paving. We are particularly excited about the partnership and synergies that Brookfield, as one of the largest owners and operators of real estate, can bring to Soundcore and Heartland," said Jonathan Tanenbaum, Investment Partner at Soundcore.

Financial terms of the transaction were not disclosed.

About Soundcore

Soundcore Capital Partners was founded in 2015 by Jarrett Turner and is based in New York, NY. Soundcore is a thesis-driven private equity firm that specializes in buy-and-build investments in the lower middle-market that are headquartered in the United States and Canada. Soundcore has completed 90 acquisitions across eleven platforms and focuses primarily on business & outsourced services, industrial services, specialty manufacturing and value-added distribution sectors. For more information, please visit: www.soundcorecap.com 

Soundcore is actively seeking additional acquisitions. Please contact Alex Bues regarding new platforms and add-on opportunities for our existing portfolio, including commercial paving.

For more information, please visit our website at https://soundcorecap.com or contact:

Media

Elizabeth Olt
Soundcore Capital Partners
(212)-812-1432
eolt@soundcorecap.com

For Deal Origination

Alex Bues
Soundcore Capital Partners
(212)-812-1186
abues@soundcorecap.com

About Brookfield

Brookfield Asset Management Ltd. (NYSE: BAM, TSX: BAM) is a leading global alternative asset manager with over US$900 billion of assets under management across renewable, infrastructure, real estate, private equity, credit and other. We invest client capital for the long-term with a focus on real assets and essential service businesses that form the backbone of the global economy. We offer a range of alternative investment products to investors around the world, which include public and private pension plans, endowments and foundations, sovereign wealth funds, financial institutions, insurance companies and private wealth investors. We draw on Brookfield's heritage as an owner and operator to invest for value and generate strong returns for its clients, across economic cycles.

For more information, please visit our website at https://bam.brookfield.com or contact:

Media

Marie Fuller
Brookfield Asset Management
+44 207 407 8375
marie.fuller@brookfield.com

View original content:https://www.prnewswire.com/news-releases/brookfield-announces-a-strategic-partnership-with-soundcore-capital-partners-and-heartland-paving-partners-302107907.html

SOURCE Soundcore Capital Partners

FAQ

What partnership did Brookfield Asset Management announce?

Brookfield Asset Management announced a strategic partnership with Soundcore Capital Partners to accelerate growth for Heartland Paving Partners in the Upper Midwest market.

What is the focus of Brookfield's private equity sponsor solutions strategy?

Brookfield's private equity sponsor solutions strategy focuses on providing bespoke solutions to mid-market buyout sponsors seeking secondary and growth capital for high performing assets.

Who is the Managing Director in Brookfield's Sponsor Solutions strategy?

Jordan Sawkin is the Managing Director in Brookfield's Sponsor Solutions strategy.

What is Soundcore's track record in platform businesses?

Soundcore has an established track record of creating and methodically scaling platform businesses through its buy-and-build strategy in niche service sectors.

When did Soundcore acquire the initial investment in Heartland?

Soundcore acquired the initial Heartland investment in July 2022.