Key Takeaways
- • O2 Investment Partners acquired Steffl Drilling & Pump, a regional water well drilling and repair services provider founded in 1978 and headquartered in Willmar, Minnesota, in a partnership structure with the founding Steffl family.
- • Steffl operates across municipal, agricultural, commercial, and residential customer segments, with service lines including new well installation, maintenance and repair work, geothermal drilling for ground-source heating/cooling systems, and PFAS remediation projects in a supply-constrained industry.
- • The transaction aligns with O2's investment thesis targeting control deals of $15–$50 million in companies with EBITDA exceeding $5 million, with geographic preference for the Midwest and Great Lakes regions; CEO Sam Steffl indicated plans for accelerated organic and acquisition-driven growth across adjacent geographies and service lines.
- • Craig-Hallum Capital Group served as financial advisor to Steffl, while CIFC Direct Lending provided debt financing for the transaction.
- • O2 Investment Partners, founded in 2010 and based in Bloomfield Hills, Michigan, identified Steffl as a premier regional leader in a highly fragmented, essential, non-discretionary industry well positioned for platform consolidation and scaling.
Summary
O2 Investment Partners has completed an acquisition of Steffl Drilling & Pump, establishing a control investment and platform for water well services consolidation. The deal represents O2's entry into the water well drilling sector through a partnership with the founding Steffl family, maintaining operational continuity with the family's involvement while leveraging O2's capital and operational expertise.
Steffl Drilling & Pump, established in 1978 by Mike and Roxy Steffl, operates from Willmar, Minnesota, approximately 120 miles west of Minneapolis. The company serves a diversified customer base spanning municipal, agricultural, commercial, and residential segments. Service offerings include new well installation, maintenance and replacement work, geothermal drilling systems for ground-source heating and cooling applications, and PFAS (perfluoroalkyl substances) remediation services—an emerging service line responding to regulatory and environmental remediation demand.
CEO Sam Steffl emphasized the transaction's strategic value, characterizing it as a catalyst for expansion in a supply-constrained industry supporting critical infrastructure. He identified O2's resources and expertise as enabling force multipliers for geographic expansion, capability broadening, and service delivery enhancement. The deal structure contemplates both organic growth and acquisition-driven consolidation, with management signaling intent to rapidly scale the platform across adjacent geographies and end markets.
O2 Investment Partners' investment profile targets control positions in companies generating EBITDA above $5 million across the United States and Canada, with particular focus on the Midwest and Great Lakes regions. The firm's standard transaction size of $15–$50 million and sector focus on B2B services, technology, and select industrials align with the Steffl acquisition parameters. William Laffrey, vice president at O2, cited Steffl's regional leadership position, operational execution capabilities, and reputation as distinguishing factors in what O2 characterizes as a best-in-class platform in a highly fragmented industry.
Craig-Hallum Capital Group, Minneapolis-based, served as financial advisor to Steffl Drilling & Pump, while CIFC Direct Lending provided debt financing. The transaction closes O2's investment thesis around essential services with recurring revenue characteristics and consolidation potential in underpenetrated, fragmented markets.
Steffl Drilling & Pump, established in 1978 by Mike and Roxy Steffl, operates from Willmar, Minnesota, approximately 120 miles west of Minneapolis. The company serves a diversified customer base spanning municipal, agricultural, commercial, and residential segments. Service offerings include new well installation, maintenance and replacement work, geothermal drilling systems for ground-source heating and cooling applications, and PFAS (perfluoroalkyl substances) remediation services—an emerging service line responding to regulatory and environmental remediation demand.
CEO Sam Steffl emphasized the transaction's strategic value, characterizing it as a catalyst for expansion in a supply-constrained industry supporting critical infrastructure. He identified O2's resources and expertise as enabling force multipliers for geographic expansion, capability broadening, and service delivery enhancement. The deal structure contemplates both organic growth and acquisition-driven consolidation, with management signaling intent to rapidly scale the platform across adjacent geographies and end markets.
O2 Investment Partners' investment profile targets control positions in companies generating EBITDA above $5 million across the United States and Canada, with particular focus on the Midwest and Great Lakes regions. The firm's standard transaction size of $15–$50 million and sector focus on B2B services, technology, and select industrials align with the Steffl acquisition parameters. William Laffrey, vice president at O2, cited Steffl's regional leadership position, operational execution capabilities, and reputation as distinguishing factors in what O2 characterizes as a best-in-class platform in a highly fragmented industry.
Craig-Hallum Capital Group, Minneapolis-based, served as financial advisor to Steffl Drilling & Pump, while CIFC Direct Lending provided debt financing. The transaction closes O2's investment thesis around essential services with recurring revenue characteristics and consolidation potential in underpenetrated, fragmented markets.
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