Project Heat II

Business Overview
A niche manufacturer of lightweight refractory products used in fireplaces, stoves, and outdoor heating applications. Founded nearly 30 years ago, the business developed a proprietary formula that produces concrete up to 65% lighter than conventional materials while maintaining strength and realism, making it a leading supplier to top fireplace brands across North America. Operating in the resilient home heating and outdoor living sectors, the company combines strong intellectual property with long-term client relationships and clear synergy potential with complementary industrial holdings.

Track Record
Operating History: Nearly three decades of product innovation and steady supply relationships with major North American fireplace brands.
Customer Base: Works with a handful of large, recurring customers, including major manufacturers in the hearth and home heating industry.
Scale: Generates steady multi-million-dollar revenues from a specialized product portfolio, with consistent profitability driven by recurring orders and minimal capital expenditure.
Profitability: Long history of stable margins, underpinned by proprietary materials and high switching costs for clients.
Leadership Alignment: The founders have transferred technical knowledge to the new management team, ensuring operational continuity under shared oversight with aligned co-investors.

Growth Strategy
Cost Synergies: Integrate production with related industrial operations to reduce rent, overhead, and logistics costs.
Product Innovation: Expand the use of the proprietary lightweight refractory formula into new applications such as outdoor fire features and boiler panels.
Marketing Modernization: Refresh branding, digital presence, and sales strategy, leveraging government grants for training and market expansion.
Operational Integration: Utilize shared management and infrastructure to streamline production, finance, and marketing across the broader industrial portfolio.
Strategic Partnerships: Strengthen supply relationships with existing clients while exploring new co-manufacturing and private-label opportunities with industry leaders.

Investment Overview
This acquisition involves control of a specialized refractory manufacturing business, forming part of a broader industrial platform under PE Gate Industrial Holdings II. The transaction represents a strategic bolt-on investment offering strong synergies, proprietary intellectual property, and significant growth potential. The investment targets a base case IRR of around 25–30%, supported by cost efficiencies, product diversification, and scalable manufacturing. Investors may benefit from future liquidity through PE Gate's secondary market or a combined strategic sale alongside complementary industrial assets.

To access the full Investment Memorandum and indicate interest, investors can set up an account on the PE Gate platform for detailed financials and transaction information.