By Fortitude Investment Partners · February 2026
Australia’s wave of retiring founders in industrial businesses deserve high quality transitions to future ownership.
Fortitude sees a material opportunity to create value for rolling founders and their teams through empathy for the history of the business, and clarity of the opportunity for the future. Long dismissed as low-growth and low-multiple, industrial platforms that have operated for decades can reach their full potential by adding experienced executives to enhance customer intimacy through horizontal integration, combining core distribution or services with adjacent consumables, maintenance and compliance-led offerings.
This shift, combined with the use of analytics for resource allocation, transforms transactional revenue into recurring income, lifts margins, improves cash conversion and materially enhances quality of earnings.
The Australian Small Business and Family Enterprise Ombudsman indicates 22% of small businesses in Australia are owned by individuals older than 60. We believe a large number of these are high quality, traditional, industrial exposed businesses with strong foundations for expansion: industrial distribution to infrastructure, industrial laundry products, safety equipment, testing, inspection, calibration and certification, and industrial soft services.
McKinsey research shows the gap between average industrial distributors and outperformers is significant: the top 12 outperformers traded at a median of more than 15x EV/EBITDA against less than 8x for the rest.
Why consumables and services change the model.
Consumables such as chemicals, spare parts and safety items transform a transactional business into a partially recurring revenue model; a commercial laundry equipment provider that also supplies detergents, uniforms and hygiene consumables can triple customer touchpoints and smooth revenue volatility. Consumables typically deliver 30–40% gross margins versus 10–20% for core services, and customers pay premiums for one-stop solutions.
Whereas industrial distribution peers might trade at 5–8x EBITDA, businesses with stable, recurring consumables income often attract 8–11x at scale. International case studies, from A&M Capital’s Brady Industries (merged into the $1.3bn-revenue BradyIFS, acquired in 2023 for A$2.6bn) to CD&R’s WESCO (sold for around six times initial equity after four years), share the outperformance traits McKinsey identifies.
The next decade of industrial value creation.
In a capital-constrained environment, industrial distribution with consumables integration represents one of the most attractive risk-adjusted opportunities for Australian private equity: defensible local operations, contractual customer relationships, and scalable adjacencies. Fortitude is currently working on four opportunities that fit this narrative, and has deployed these strategies with Hospital Pharmacy Services, Quality Foods & Beverages, Birch & Waite, Nutra Organics, TEN Group and Machines4U.