Investment Thesis

The Hartmann Family is very excited about the opportunity in the residential generator space. In contrast to other residential services like HVAC, electrical, and plumbing which have seen vast consolidation, the residential generator space remains extremely fragmented and therefore ripe for the introduction of investment and sophistication.

1. Increasing Storm Frequency and Power Outage Vulnerability

Weather-related power outages are escalating dramatically across the United States, creating fundamental demand for backup power solutions. To be precise, the U.S. experienced approximately twice as many weather-related outages from 2014-2023 (~100 large-area outages per year) relative to 2000-2009 (~50 large-area outages per year).

2. Affected Geographies

The states experiencing the most “large area outages” from 2000-2023 include Texas (210), Michigan (157), California (145), North Carolina (111), and Ohio (88). Seven East is targeting these states due to the inherently larger installed base of residential generators in response to these outages, signaling significant service revenue to capture. These markets will also the greatest demand for ongoing generator sales and the most rapid use of the 1,500-3,000 hours of a residential generator’s useful life (triggering replacement).

3. Data Centers Straining the Electrical Grid

The artificial intelligence boom is creating unprecedented demand on the U.S. electrical grid, fundamentally weakening power reliability for residential consumers. Data centers consumed about 4.4% of total U.S. electricity in 2023 and are expected to consume up to 12% of total U.S. electricity by 2028.

This massive power draw is creating grid instability issues that directly impacts residential areas. More than half of tracked households showing the worst distortions of power quality are located within 20 miles of significant data center activity, affecting approximately 3.7 million Americans in the most-impacted areas.

4. Aging Grid Infrastructure Creating Systemic Vulnerability

About 70% of the electic grid infrastructure is over 25 years old, with critical components well beyond their intended lifespan:

• 60% of circuit breakers are 30+ years old

• 70% of power transformers are 25+ years old

• 70% of transmission lines are 25+ years old

The U.S. is facing a $208 billion grid investment shortfall by 2029 and a $338 billion shortfall by 2039. As public and private investment falls short and blackouts continue, homeowners will be required to make their own decisions to protect themselves.

5. Electric Vehicle Impact

Over half of all new cars sold in the US by 2030 are expected to be electric vehicles, creating systematic stress on residential power distribution.

EV owners often charge their vehicles during evening hours when they return home from work, coinciding with peak electricity usage times when households are running appliances, lights, and heating or cooling systems.

This clustering of demand during already-strained periods exacerbates grid vulnerabilities by overloading local transformers and distribution networks.

6. Investment Criteria

• Flexible to owner situation

  • Can provide capital to fund acquisitions

  • Can make a majority investment for an owner to “take chips off the table” while remaining in a leadership position through the next phase of growth

  • Can facilitate an owner retirement via a 100% buyout and 6-12 month transition plan

• Location: Open to all geographies in the continental U.S.

• Revenue Mix: Looking for companies where a significant minority or majority of revenue comes from recurring service, remote monitoring, and ad hoc repair work

To intermediaries and business owners: Please reach out to Brett Hartmann at brett.hartmann@seveneastcapital.com with any relevant opportunities.