Behind the Buyouts: Unity Partners' Blankenau on Thematic Sourcing

The Founding Vision and Ethos of Unity Partners Hello, and welcome to Behind the Buyouts, the Deals podcast, where we speak to private equity and venture capital practitioners about their deals and deal making. I'm your host, Nikita Satiraju, senior reporter for the deal we have with us today, Kelly Blankenau, head of business development at private equity firm Unity Partners. She's here to talk to us about the firm's investment strategy, its portfolio companies and the state of middle market. M and A Kelly, thanks so much for joining us. Speaker 2 Nikitha, thank you so much for having me today. I'm so excited to get to chat with you. Speaker 1 That's fantastic. Let's start with talking about Unity Partners. Tell us about when the farm was founded and a little bit of history there. Speaker 2 Absolutely. So our fearless leader is John Block. He is wonderful. He started the firm in 2022, raised our first fund in 2024 and have been investing since. John was at another private equity firm and really enjoying his time there. It's a great firm. We have nothing but great things to say about that group, but I think he was itching for something a little bit more entrepreneurial himself. And so he had a vision for what he was looking to build. And I think what that is, is a firm that equally emphasizes investment, our Propel group, which is our value acceleration group and development, which is my group business development and overall development plans. And so his vision there is that it's this really cohesive group that all work together. And that was the high level vision for Unity Partners. Unity Partners means the same thing. And so that's kind of the ethos there. And he had previously worked with one of the other Co founders, Jim Sharp actually and his last firm. And so he very much fit that Propel model. He was an operator. He's a wonderful person. John has known Jim for quite some time. And great story here. They actually worked together in COVID And so John was invested alongside Jim. Jim was leading the company, actually an event management software business. So you can imagine slightly hit during COVID, right? And I think you really learn a lot about people, obviously, when you invest alongside them. But when things get tough, that's really where you learn what people are made of. And I think they really got to know each other through just like a tough market and they mutually supported each other. And I think we had a great experience working together. And so Fast forward some years later, decided to partner together and then quickly brought some of our founding members of the team to Unity as well, Peter and Hannah and shortly thereafter, Bobby. And so quickly assembled an awesome team there. And this is around like 2022 time period, raised a fund and we've been off to the races since. We have 7 portfolio companies today, hopefully soon to be 8, that we are all really excited about and thrilled to work alongside these businesses and continue building on the momentum that they have. Callie's Personal Why and Unity's Core Mantra What drew you to the company specifically? Would love to know more about that as well. Speaker 2 I'm relatively new to the firm. I've been here about six months now, and I can say I am as excited about it now as I was when I first joined. And I'm really excited about what we're building. And so I'll tell you, we start every conversation with our mantra that we live by and that's Build Better Together. I'll walk you through how we think about that as a firm. It really feeds into our strategy and how we invest. And I'll tell you what that means to me personally. So Build Better Together. When we say these 3 words, what it really means is building. So we're rolling up our sleeves and working alongside our portfolio companies and our partnerships. We really view them as partners and we are here to really help them build and accelerate what they've already built. So that's build better. This ties into our strategy a little bit. We really are a buy and build shop. Oftentimes this gets a bad rap in the industry and there's a lot of folks, you know, that just sling deals together, don't integrate them, sell them off. I do think the market isn't appreciating those as much these days, but we are very much not trying to do that. We are trying to build better platforms, really integrate. We do run heavy M&A strategies, but we're also always focused on organic growth and building a better platform. So we do that tactically through our partner and Propel program. And so this ties into a little bit of our strategy as well. This Propel team is what the industry calls value creation folks or operation folks, we call it value acceleration. And so slight nuance there. We want to give credit where credit's due. And let's be honest, we didn't create the value, the people we partner with did. And so we call it value acceleration. We're just there to add to what they've already felt. It's kind of a tip to the hat to the folks that we work with. They're awesome. There's two flavors to each of them. So one flavor is this 30 to 40 year old person who we call a chief transformational officer. So they sit alongside the management team. They essentially live in the city in which the Port Co is located, and they work alongside the management team on anything they need. I've seen them help immensely on helping build integration muscles. They've helped on building out tech stacks to kind of professionalize the tech operations of the business. I've seen them help work on sales and strategy plans. And so those are people day-to-day really doing work. So that can be a little different. And then we also have more specialized folks who have a practice area where they're really, really strong. So we have someone who's really focused on tech there. We have someone focused on Rev OPS who's done that their entire career. And we can also utilize those resources. And so that's the better. We're trying to build a better platform. My goal is that when a Unity business comes up into the market for sale, people say I want to buy that Unity business because they're building a better platform and then last word together intentionally you need to partners means the same thing. It's together and so we believe that we all should win together. Couple practical ways we do that is we run employee ownership plans very far down the organization. So we want everyone to win. We want everyone to have a great day whenever we exit this business and grow it together. And specifically within Unity, we're all compensated similarly to management teams as well. So we're very much tied to the growth of the businesses. And so every day I'm thinking about how I can drive value at all of our port Cos. And so I think we're all really aligned and that's very important to us. So that's our Build Better strategy and it's very important how we think and how we invest and we try and live it every day. So that's Build Better Together for me. I was actually thinking about this the last couple weeks and what Build Better means to me. And I think there's a couple ways I think about it. First of all, we have LP's and they invest in US and an effort to drive a return for the people they're managing money for. And so sometimes that's an endowment for a college and sometimes that's a family office. And I think about the impact of what we're doing. And this really drives my personal why? And if we have a great outcome and that trickles down to our LP's and does that trickle down to a student being able to go to college because that drove a meaningful return at a university endowment? That really drives me. And same for a family office, if that investment in US helps drive maybe more philanthropic efforts for a family to a 'cause that matters to them, that makes the world a little better. I definitely think that's part of my personal why. And then on the other side of the coin, I think about the businesses that we're partnered with and the people we work with. They are building amazing platforms, hiring incredibly talented folks, really impacting the communities that they're in. And I just think about the positive impact of building a better platform and employing wonderful people and impacting the communities in which each of the port goes are in. And that's my personal why and how I wake up in the morning and think about what I do and feel really lucky that I get to do this job every day. From LP to Unity: Callie's Unique Career Path That's really great and you. Speaker 1 Also have a pretty fun story for how you ended up at Unity Partners. Maybe you could tell us a little bit about that career path and interviewing with the firm and then landing this role. Speaker 2 Yeah, absolutely. So started my career actually as an LP. So I worked for university endowment, so very near and dear to my heart there. Learned about the world of private equity in that role and so didn't even know this world existed. And then instantly fell in love with high finance and private equity and hedge funds and asset allocation and ended up deciding that I wanted to be a little bit closer to the assets. So found my way into the private markets and ended up meeting John just through a networking coffee. And we're going to be boringly consistent. You're going to hear this Build Better Together throughout talking to anyone at Unity. And that's very much intentional. But he started off the meeting with the Build Better Together and or why and why that matters so much. There's more private equity firms than there are McDonald's these days. So you have to find a way to be different. And so we had this really unique interview process. It was about really getting to know each other. I sat in on a lunch and learn that the firm had. I got coffees with people around Dallas, had human calls, went off with folks, and then really got to know the team on a more personal level. I remember I went to happy hour at Katy Trail Ice House, if you know that spot in Dallas and then sat down with John and said listen up. I buy into what you're building here. I am so excited about the portfolio you've already built, the firm, the people that work here I do believe and the build Better Together and what you guys are doing. Please let me present a strategy because y'all are on to something awesome and I feel like I can further amplify it and had a full interview and the rest is history. It was great to be able to present to him my vision and he bought in and it's been a great experience thus far. Speaker 1 Absolutely. Unity Partners' Lower Middle Market Investment Strategy And so I want to dig into that strategy now and talk about how the firm approaches investment. So maybe we could start with how it even goes about identifying where you're going to. Speaker 2 Invest, absolutely, absolutely. So Unity Partners is focused on the on the lower middle market. So we're looking for businesses that are service business models and we think of that world as office based services and field based services. And so folks generally categorize that as white collar and blue collar services. We like to phrase that a little bit differently and we have a couple of examples of those in our portfolio. I'll quickly run through a few. Prosperity is one that does tax and accounting or ultra high net worth at family offices and high net worth individuals. And so that's a good example of the office based type of of investment in partnership. And then we have others like Katzam that focus on exterior facility services and they specifically focus on commercial parking lot sweeping and maintenance. And so that's an example of a more field based service business. And so we are looking for businesses that are about 5 to 25 in EBITDA. And I would say there's a couple of squishier things that we look for as well and you'll see this throughout our portfolio. So that is we're always looking to back an ambitious leader. We're specific and not saying an ambitious founder, we will buy private equity owned asset, but we want to find someone that is ambitious and fits our culture and will help lead the firm and lead growth the way that we would like them to. And so those are the areas of focus for us as far as mandate and we do invest a little differently. So this is also something that drew me to unity is our focus on thematic investing and our thesis building work. So I'll pause there and make sense to dive right into our thesis work. Speaker 1 Yeah, absolutely. I would love to hear about that thematic investing bit and then the three pronged approach we talked about before. I I'd love to know more about that. Differentiated Thematic Sourcing and Team Collaboration Awesome. SO we'll talk about this later. But the M&A market, it's just really competitive right now. You have to find an edge and you have to differentiate. And so we're very, very thematic and how we invest. So we spend a bunch of time generating ideas. So at any one moment in time we have 40 ideas that are formed from more macro views. So we think about what are things happening in the world that we want to play. So I think about one of our portfolio companies, we really wanted a way to play like multi family and senior living property and that business does unit turnover services for those properties. And so that was kind of a macro theme that we developed that led to that investment. And then sometimes it's a little bit more bottoms up in that we really like this specific business model and how do we want to play that. So a good example there is you might start hearing about this a little bit more, but people are starting to roll up law firms. So we know that business model really well because the partnership model can be quite similar to that of accounting firms. And so we have a lot of experience in accounting services. So we're able to apply a lot of those same principles to a different industry. And you'll see us do that a lot to you from a business model perspective. But practically speaking, I work really closely with the investment team here. This is probably a good segue into how we all work together. So that's something that I think is quite differentiated about our firm too is I work very closely with the investment team and Propel. And so the way we view everything is one of the three of our groups is taking point on anything. But it doesn't mean that the other two groups are not involved in some way. And so obviously sourcing and business development I take point on, but I can give you a million examples of how other folks are involved. Obviously, investment team is really involved in sourcing. They all have strategy plans that we rolled out across the firm and I've pulled Propel team members into our direct sourcing engine. They're helping me optimize my tech stack for our tech enabled outreach. And so that's a very tactical way. I'm basically using my Propel team to help me be better and my business development efforts. And I've also had quite a few of our Propel members that have worked with us in various capacities and I pull them into initial meetings because I think what we're doing there is really different. And so they're part of initial pitch sometimes. And if we're in a process, they're always involved very much from the beginning. So it's very integrated. We all work very, very closely together. You know, oftentimes people think BD is like top of the funnel and then it goes away. I work very closely with the teams as we're underwriting deals, helping build out pipeline even before we submit LOI's. And so we're very close and then post close. We view BD as a value creation lover. Obviously, there's a lot of operational things you can do to grow a business, but M&A also is a value creation leverage. We all are very intertwined and connected. So that's how we work all together. Speaker 1 And I would love to get a. Speaker 2 Sense of that? Speaker 1 With maybe some of the portfolio companies you have, you obviously mentioned like Cat Salmon Prosperity, but if there are others even that you would want to talk about to put that strategy into context, I would love to hear more about those as well. Practical Sourcing Examples and Tech-Enabled Outreach Absolutely. Well, I'll touch more on the sourcing side since that's where I spend my time and kudos to the team because I've only been here for six months. So this is all them, all them for all of this historical work. But how we view business development and sourcing and we broadly call it development is through a three prong approach. So we focus on tech enabled direct outreach to business owners. We focus on and what we call network where you tap your network. I plant seeds to help others grow the lemons. And then part of my job is to squeeze the lemons and keep squeezing them and keep growing lemons, right? And the third approach is, is through intermediaries, which is very common. We'll chat through actual examples of how we enacted all of those. But it's so funny, as I was thinking through our portfolio company, there is no silver bullet when it comes to sourcing add-ons and growing businesses. So we really enact all three of those at every port Co on every theme on every deal we're underwriting. So first one I'll mention is prosperity because I think this is a really good one. As I mentioned, this business does tax and accounting for ultra high net worth individuals, high net worth individuals and family offices. They've grown really quickly. They have been great. So I think there's a couple things that I love to highlight about this business. First of all, we hit the nail on the head backing an ambitious leader here. So Jeremy is the CEO of this business and he is phenomenal. I Can't Sing his praises anymore. He is such a great leader and he's really helped build out an amazing management team and all of the folks that work at Prosperity are fabulous. He's very much fitting that ambitious leader Programmeter we have. And then I think he's done a really good job on the sourcing side. And this is part of our strategy as well. We have these Propel members that help build out the integration muscle, right? The very important to us is to integrate all of these businesses. So we help them early on, but we also teach them. He helped build out this amazing M&A function. So he's really built out a great team and allowed that business to replicate what we did with him and for him, but he's built all the structure to do that moving forward. So whenever that business comes to market, it's going to continue to be an M&A engine because they've built that out. And so today, they've done 9 add-ons. And I would say with a buy and build strategy, something we're really focused on is not doing add-ons for the sake of add-ons. You can buy businesses that are really not a perfect fit and you can kind of make them fit, right. And this is a great example of a business who was really disciplined. They knew what they were looking for. They had a very clear buy box and they went after it. So they have focused on not having a ton of material on it in their add-ons. They focused on high revenue per customer, which is very important to that business. They focused on really low customer churn and they have a really great average bill rate. And these are all things that you can see pretty early on as you evaluate add-ons. And so they've been very disciplined. They've stuck to the buy box and they've kept the integrity of what this business really does clean and clear. And so really proud of the team here, really proud of all those folks at Unity who've worked on this one as well. They've done a really great job of growing this business through M&A. So that's one that I'd love to highlight. Another one that's a little bit different is a business that I mentioned earlier as well. Kat, Sam. Exterior facility services is how we categorize this one, but they really do commercial parking lot sweeping and maintenance. And so a great example is like a Home Depot in a strip center. They are doing the ongoing maintenance and weekly, daily, monthly sweeping of that parking lot and they do some portal work as well. So that business also had a really interesting M&A strategy as well. And this is also to the three pronged approach. On the network side, they've done a really good job. They found what I like to call river guides or spheres of an influencer, influencers in the industry and they found folks who helped amplify finding add-ons and telling the Cat Sam story. And so that's been really, really interesting to see them activate the network. So well. The CEO is also fabulous here. Chris has an awesome network and that has also driven a lot of M&A is just the years of work that he's done prior to Unity even being involved are really bearing fruit there. And then this is a good example of where a tech enable draft has has worked as well. So we worked with a firm called Praxis Rock that really was helpful. And so we're seeing add-ons directly through business owners. So that's a good example of how that has been effective for us. Speaker 1 So tell me a little bit more about how the firm does tech enabled outreach. That sounds really interesting. Speaker 2 Yeah, Nick, that we're so excited about what we're doing here on the tech enabled outreach side. I would say right now we're in the infancy of what we're building. And I have a big grand vision and I think John does as well for what we'll build out in the next couple of years. And we have data scientists on board and folks spending tons of time building out AI functionality within our firm in a couple of years. But today we're using really cool technology and software and we're partnering with folks who have some of that already built into the software that they have. So couple of examples that I'll give you there is on our list building. So really cool AI features that we're using the software that helps us with list building that we're liking a lot. We coupled out with all of the typical stuff that people use as well like source, Scrub and Grata. And those are a couple of names that people know. And then this other piece is around outreach. So really cool tools around sales automation. We have some of our port codes using it. We use it on thematic work that we're doing. And it really helps just take a lot of administrative burden off of the tech enabled outreach. And outreaching to business owners is a lot of administrative work. So it really helps take the lift off everyone involved. Speaker 1 It's always fascinating to hear how people source in these really fragmented industries, right? And with talking to people, families, founders that really don't know how private equity works or don't always have the greatest view of it. So it's really fascinating to hear that relationship building. 1 of the industries I do want to go back to is law firms, a law firm, M&A. Exploring the Emerging Law Firm Roll-Up Strategy You mentioned that. I'd love to maybe dig a little bit deeper into the kind of thesis you have there and then what tailwinds you're seeing in that industry. Speaker 2 What I think is really interesting about this particular industry is what you just described about people not being super familiar with private equity or comfortable with it. This is 1 industry where that is generally not the case. They know private equity, they've worked with them. So that's what we've found is when you approach folks in this industry, you don't have to educate, right? Like they know what a transaction looks like and they are interested or they're not. And that's totally fine. But it's been really cool to see people being open to conversation here. So couple of ways this came about. One of my colleagues, AVP on the deal team, Hannah is working on this theme and has spent a lot of time in legal services. So this is another great segue into our thesis work and how just because a thesis dies or morphs doesn't mean that time wasn't well spent. And so we ran after a business in the ADR space, so alternative dispute resolution world and it was doing arbitration and mediation services, really cool business model, didn't end up winning that business, but really liked it and so spent a little bit more time there. So that's sometimes how our themes come about is we learn about these businesses through processes and hopefully we're winning them, but if not, we work to build a smaller platform in the space based on what we saw. And so that was kind of the case here. We spent quite a bit of time mapping out the market and spending time contacting business owners and I think ended up deciding to morph our thesis there. But because of all the work that we had done there, we were easily able to morph this into more of like a law firm roll up strategy. And so from there, something else that Hannah has done, we partnered with a group called Amplyo, which does manage professional services broadly, but specifically think of them as kind of like the outsourced CFOCHROCMO business and they are considering other avenues of professional services. So one of those avenues is around legal services, so outsourced GCS through that work. And I spent a lot of time learning about those businesses and how to structure them. It is a bit of a unique structure. So they took a playbook out of the healthcare world with physician practice, MSO models. And so she did a lot of work with Amblio creating an MSO structure. And this is a great example of merging like a theme work and deep industry knowledge, tons of relationships and connections she already has in that world. And then couple that with how to structure that investment that's novel and new through this new MSO model and how to make that work and thinking through how to keep folks incentivized when you've moved to this model is something that she talks about a lot. Then we talked about how to activate the theme. So again, that three pronged approach to BD, this one is really been interesting. The network is fabulous here. We all work with lawyers quite frequently, have been really targeted and we really know what is interesting to us and the type of folks we'd like to partner with in this space. And so we're very tight and who we reached out to and it's been great to see folks be really receptive. So a really small universe of folks that we're reaching out to both in Dallas and in areas where our other existing port coves are AT. And we've received pretty great interest in continuing conversations. Nothing to report on yet. Hopefully the next time we catch up, there's something to report on. Yeah, it's been great to see people being open and curious about partnering with private equity in this space. Speaker 1 Are there certain practice areas that are of interest to you, like corporate law or anything else that you can touch on? Speaker 2 Yes. So we are most interested on the corporate side and the estate and planning side. Those are two sub sectors that we think are quite interesting. We are staying away from personal injury today. I think that's an area where you see a lot of interest and that makes sense. A lot of that is heavy marketing engines. So there's like great ways to grow those businesses. But those are the two areas we're spending the most time in. Navigating the Competitive M&A Market and Future Outlook I do. Speaker 1 Want to talk a little bit about the general state of M&A and what things have been like. So I'd love to know what 2025 was like for the areas that you're focused on, especially middle market M&A? Speaker 2 Absolutely. Well, I'm sure this isn't the first time you've heard this, but it was interesting. I just read a stat I saw this get quoted that exits were up in 2025 and it was the second best exit year since 20/21 with about 730 billion in exit value. And so that's great. I'm happy to hear that everyone talks about the dam breaking. So there's been a lot of private equity assets that have been held for quite a long time. And so it does feel like we're starting to see a little bit of momentum there. But you'll hear from a lot of folks, 2025 was a tough year. It was hard to win assets, Processes were really competitive. I was seeing a lot of very large funds come down market because there was a little bit of a scarcity of assets as they get a little bit bigger and they're just looking to deploy capital into other things. So it's challenging and when you're going up against really big funds, it's not always fun in a process. But I'll give major kudos to the Unity team. They were able to close three platforms last year. So awesome year for our firm. We closed Amplio, the managed professional service business I just mentioned. We closed being Group, which is the unit turnover service business I mentioned. And then we closed Yard Master, which is the commercial landscaping and so awesome to see those close. I will note some pretty unique sourcing there. The team was really creative in a couple of those. But 2025 was a little bit of a competitive year. I think I mentioned this to you, Nick it up, but there was a process that had 100 IO is it's crazy. That's really competitive. That's really a high watermark for that firm, I'll tell you that. Speaker 1 Wildest thing I've ever heard. It's. Speaker 2 Crazy to be the the associate going through trying to manage that for their client. But it's competitive. And so I think you're seeing for high quality assets, record number of IOI submitted, you're seeing people bring more folks through to MP and keeping more people in the process longer. So it's competitive, but you have to find your right to win. You have to differentiate, you have to have a differentiated sourcing strategy as well. And I'm feeling confident about 2026. I think people are excited. I think people are beginning to at least like the sponsor backed assets are beginning to trade a little bit more which is great for the overall M and A market and I'm feeling good about 2026. I don't know if the dam is going to break. We've been talking about that for three years. So we'll see. But it's challenging. You have to continually be working to get it platform done and we spend a lot of time on M&A. And so we'll have had a bunch of success driving M and A activity at our board coast, but hopefully we'll have another great year. Speaker 1 That sounds fantastic. And I do have to ask, what was one of the creative ways that Unity sourced a deal that you would want to like highlight? I think Yardmaster is something you mentioned I had as a unique thing going on. I'd love to hear that. Speaker 2 Yes. So Brett on my team, really 100% credit to him. He crushed this. He spent two years developing this thesis and really digging in, and I think about his progression again. He started out in a different area around tree care and tree trimming and morphed into commercial landscaping, went to probably 5 industry conferences, had over 100 CEO and founder calls. He met these spheres of influence that we talked about and ultimately we found a bank that specialized in these types of businesses and were able to find a business that way, but also brought together three other small add-ons to build a platform of scale. So I call it an execution souffle. He was working so hard to make sure it turned out perfect. It was a ton of work. Obviously Propel was very involved because so much integration right at close and it's been going great. Everything's gone super well. But really proud of him for being creative and building a platform and years of work that went into that. Speaker 1 Was it also on like Facebook groups trying to like find? Speaker 2 The funniest thing about that is he did get into a Facebook group and was able to kind of build rapport and communication with a lot of business owners through that. And so creative sourcing is at an all time high. I just heard a funny stat from another banker. He said he sourced the business through Reddit, so that was a first. I've never. Speaker 1 Wow, OK. I mean, Reddit's a great place, honestly. A lot of people over there talking about things. So I I I like that. Speaker 2 Yeah, me too. Speaker 1 Is there anything that I missed out on asking about unity or the middle market M&A in general that you think you would want to touch on? Speaker 2 I think we covered a lot of what's going on in M&A and Unity and where we're at today. But I would say just excited to continue building better at Unity and really excited about the businesses that we're partnered with today and their growth and continue to focus on our portfolio, but really excited about finding other great platforms. Speaker 1 Kelly, thank you so much for a great conversation. Speaker 2 Thanks so much. I appreciate your time today. Speaker 1 This is Nikita Satiraju, senior reporter with the deal. Thanks for tuning in to Behind the Buyouts.