Episode Summary
Executive Summary: Berkshire Partners’ Kevin Callahan and Larry Hamelski discuss how they bought, grew, and later recapped Parts Town, a tech-enabled distributor of OEM repair parts for foodservice equipment. The conversation highlights Berkshire’s team-based culture, the importance of relationships and proprietary sourcing, Parts Town’s e-commerce and service-tech model, its heavy use of tuck-in M&A, and how a continuation-fund structure extended ownership for another growth chapter.
Main Topics: Berkshire’s culture and partnership model (Priority: 5/5): Kevin and Larry explain Berkshire’s employee-owned, highly collaborative culture, emphasizing long tenure, shared economics, and a process-driven, team-first investment style. What Parts Town does and why it matters (Priority: 5/5): Parts Town is described as a tech-enabled distributor of replacement parts for commercial kitchens, combining e-commerce, service, and deep OEM relationships to solve a fragmented, mission-critical problem. How Berkshire found and won the deal (Priority: 5/5): Berkshire’s discovery came through adjacent diligence in the foodservice ecosystem, followed by relationship-building with management and a proprietary early look before the broader process. Growth levers and operating value creation (Priority: 5/5): The firm and management pursued organic growth, digital enhancements, international expansion, systems upgrades, and tuck-in acquisitions to build scale and resilience. M&A integration and the acquisition engine (Priority: 4/5): Parts Town’s ability to buy and fully integrate smaller businesses became a major growth driver, with Berkshire heavily involved in larger deals and portfolio support. Continuation fund recap and long-term ownership (Priority: 4/5): Berkshire recapitalized the business into a new fund and continuation vehicle to give earlier investors liquidity while preserving ownership for a new chapter.
Key Arguments: Berkshire believes the quality of the asset matters far more than the precision of entry price; a great company can outperform even if initially bought at a seemingly high multiple. Proprietary, relationship-driven sourcing can create advantages because early access provides better understanding of management quality, culture, and operating metrics. Parts Town’s business is structurally attractive because replacement parts are less cyclical than equipment sales and are supported by recurring, mission-critical demand. The company’s digital platform and information richness create a moat that is hard for competitors to replicate, especially given the depth of its SKU catalog and service network. Tuck-in M&A has been a central value-creation lever, with Berkshire providing analytical support while Parts Town increasingly leads integration and smaller acquisitions. Continuation funds can be used responsibly to extend ownership when a business still has runway, while providing liquidity and aligning old and new investors through a fair process. Culture matters on both sides: Berkshire and Parts Town both use articulated values to align teams, build trust, and support long-term partnership rather than transactional ownership.
Data Points: Berkshire founding year: 1987 - Berkshire Partners overview Berkshire team size: 35 people - Berkshire’s dedicated team as described by Kevin Firm ownership: 100% owned by active employees - Berkshire’s alignment and succession model Time Larry and Kevin have worked together: 28 years - Illustrates Berkshire’s long-tenured partnership culture Parts Town inventory size: 150,000 separate parts / SKUs - Scale of the company’s parts catalog Parts Town founding year: 2002 (as discussed) - The business existed earlier but transformed under Steve Snower around 2002-2003 Period of sequential month-over-month growth: Close to 20 years / 198 months - Growth streak before the pandemic Initial purchase timing: 2016 - Berkshire bought Parts Town from Summit Partners Recap/continuation fund timing: 2021 - Berkshire transitioned ownership into a new fund structure Entry valuation multiple: Around 15x+ EBITDA - Price discussed during the original acquisition process Growth since acquisition: About 8x earnings growth - Kevin’s estimate over the 6.5-year ownership period Organic vs M&A contribution early on: Roughly 50/50 for first four years - Growth mix during the initial period Organic vs M&A contribution later: About 60% M&A / 40% organic - More recent growth mix Pandemic month performance: Down about 50% in March 2020 - The first month of COVID hit Parts Town hard despite its resilience
Pivotal Quotes: "the entry price is far less important than the goodness of the asset that you've bought" — Kevin Callahan: Explaining Berkshire’s willingness to pay up for a high-quality business with long-duration upside "we're a firm that is so committed to succeeding together" — Larry Hamelski: Describing Berkshire’s team-first culture and employee ownership model "if you find a special company that has the leadership, it's got the market position, it's got these capabilities, they're not just going to stand pat" — Kevin Callahan: Why Berkshire underwrote Parts Town as an asset with multiple paths to upside
Implications: The episode shows how private equity can create value through relationships, digital enablement, and disciplined M&A, not just financial engineering. It also illustrates how continuation funds can preserve ownership in exceptional assets when both management and investors want more runway.
About Private Equity Deals
Allocator and asset management expert, Ted Seides, conducts in-depth interviews with interviews with top institutional money managers across private markets. Guests include principals and senior leaders from private equity, private credit, real assets, and other alternatives. We dive deep into individual deals to learn about deal dynamics, companies, and ownership that make private equity a force in institutional portfolios and the global economy. Learn more and join our community at capitalallocators.com.