Last June, we looked at how long-time holding Quaker Houghton—which produces, develops, and markets industrial chemical products—was acting as an acquiror from private equity sellers that desired liquidity. Several months and three interest rate cuts later, we are seeing additional Premier Fund holdings demonstrating a similar strategic pendulum swing. After a period when public companies were often targets for take-private transactions, some portfolio holdings have shifted decisively to the offensive, serving as essential liquidity providers for the private equity ecosystem.

So, while small-cap companies are often viewed as having the “urge to merge,” this often means a merger of two comparatively sized companies or a large- or mid-cap enterprise buying a smaller name in the same industry or in a complementary business line.

Many Premier holdings, however, are mature businesses with rich balance sheets primed for value creation—what we call “Quality Compounders.” These are companies with what we think are unique business models that also boast high returns on capital and lofty reinvestment rates. A key component of their appeal to us is rooted in their ability to maintain operational resilience and high returns on invested capital while executing disciplined capital allocation, traits that have been particularly evident so far in 2026.

Two recent transactions highlight these strategic advantages, with private equity sellers offering companies at attractive values to Quality Compounders:

Headquartered in Toronto, Colliers International Group is a global diversified professional services and investment management company that operates through three businesses: Commercial Real Estate, Engineering, and Investment Management.

In February 2026, Colliers announced a definitive agreement to acquire Ayesa Engineering for approximately $700 million in cash. The deal provides an exit for A&M Capital Europe, a London-based private equity firm that held a 67% stake in Ayesa, and the Manzanares family. The deal expands Colliers’s engineering platform to nearly 14,000 professionals across 23 countries. Equally important from our perspective, the transaction underscores the role of public companies like Colliers as natural partners that can offer stability and long-term growth for firms looking to move beyond the private equity ownership model.

It is also worth noting that Colliers has been active as an acquirer from private equity players over the last few years. Colliers bought Englobe from mid-market private equity firm Onex for $475 million in June or 2024 and acquired Triovest, a leading Canadian commercial real estate services platform, from Coril Holdings in April of 2025.

ESAB Corporation manufactures connected fabrication technology and gas control solutions, providing gas control equipment, robotics, and digital solutions for fabrication, industrial, life sciences, and medical applications. In early February 2026, ESAB announced the $1.45 billion acquisition of Eddyfi Technologies, which is a global leader in advanced inspection and monitoring technologies and expands ESAB’s total addressable market by approximately $5 billion. We think this marks a transformative step in ESAB’s evolution as a premier industrial compounder while also allowing private equity firm Novacap and the institutional investor Caisse de dépôt et placement du Québec to realize a major liquidity event following their strategic realignment of the asset.

The Premier team, which consists of Co-Lead PM Lauren Romeo, Assistant Portfolio Manager Andrew Palen, and myself, continues to see companies executing on a highly active capital allocation playbook, continuing the trend established in late 2023. Two more portfolio companies that we see as “Quality Compounders” have been active as acquirors over the last three months, including cases where doing so provided critical liquidity to private equity funds:

Kadant, a global supplier of technologies and engineered systems that play integral roles in enhancing efficiency, optimizing energy utilization, and maximizing productivity, acquired Austrian firm Bohler from the large industrial group voestalpine AG. This deal gives Kadant a critical supplier that it had targeted for years to secure specialized, patented processes.

Installed Building Products (IBP) made three acquisitions recently that totaled more than $22 million in annual revenue and were consistent with its bolt-on approach to acquisitions. On 12/11/25, IBP acquired CKV Finished Products, while Biomax Spray Foam Insulation was acquired on 1/19/26, and Thermo-Tech Mechanical Insulation was acquired on 2/2/26.

As each of these “Quality Compounders” remains on the offensive, their ability to navigate macro uncertainty while capitalizing on the liquidity needs of private equity businesses remains a core driver of long-term value creation. Our process remains constant: searching for unique business models with high returns on capital and disciplined reinvestment rates.

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