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Electricity demand growth is leading Blackstone to pull the trigger on large energy deals.

Why it matters: Private equity is playing a key role in financing the energy infrastructure buildout needed to support soaring U.S. electricity needs. 

Driving the news: Blackstone said Thursday its energy transition fund plans to acquire electrical services company Shermco Industries for $1.6 billion. 

Blackstone Energy Transition Partners is buying the Irving, Texas-based company from private equity firm Gryphon Investors, which took a majority stake in 2018. 

Shermco provides maintenance, testing and upgrading of electrical systems across industries, like data centers, utilities and the chip industry.

Zoom in: Shermco, which has hundreds of technicians and engineers across the U.S., has itself been picking up companies this year to grow its regional presence.

Shermco said in May it would buy R3L Engineering to boost its presence in Alabama. 

In June, Shermco said it would buy New Jersey-based Eastern High Voltage.

State of play: Blackstone has been aggressively buying up energy services companies.

Earlier this month, the private equity giant said it planned to acquire energy intelligence company Enverus for reportedly over $6 billion, one of its biggest acquisitions of the year. The deal was made in collaboration between Blackstone's core fund and its energy transition fund.

Blackstone closed its latest energy transition fund in February at $5.6 billion, which was 33% larger than its previous energy transition fund.

Blackstone also has over $80 billion worth of leased data centers, including through a company it bought, QTS Realty Trust.

The big picture: The combination of the AI data center buildout, manufacturing expansion and electric vehicle growth has caused a surge in electricity demand this year. 

Private equity firms like Blackstone, TPG, Brookfield and KKR are making big investments in energy infrastructure companies.

Electricity boom powers Blackstone's big energy deals

Blackstone said Thursday it is buying Shermco for $1.6 billion.

Animated illustration of an American flag with lightning for stripes and bursts of energy for stars.

Am illustration of an American flag with lightning for stripes and bursts of energy for stars.

Electricity demand growth is leading Blackstone to pull the trigger on large energy deals.Why it matters: Private equity is playing a key role in financing the energy infrastructure buildout needed to support soaring U.S. electricity needs.

Electricity boom powers Blackstone's big energy deals

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