Vertical Transportation Infrastructure: A High-Value Niche in Industrial Services

The global infrastructure landscape is undergoing a quiet revolution, driven by the convergence of urbanization, technological innovation, and regulatory rigor. Among the most overlooked yet critical sectors is vertical transportation infrastructure-the systems enabling safe, efficient movement in multi-story buildings. This niche, dominated by elevator inspection and management services, is emerging as a high-value investment opportunity, particularly for private equity firms leveraging strategic M&A to scale recurring revenue platforms.

Market Dynamics: A Sector on the Rise

The elevator inspection services industry is poised for sustained growth, driven by three key forces: urbanization, technological disruption, and regulatory compliance. According to a report by Virtuemarketresearch, the global elevator testing and certification market was valued at $193.04 billion in 2023 and is projected to reach $2,501.2 billion by 2030, with a compound annual growth rate (CAGR) of 3.77%. In North America alone, the market is expected to expand from $1.2 billion in 2024 to $2.5 billion by 2033, fueled by a CAGR of 9.2%. This growth is underpinned by the proliferation of smart elevators, which integrate IoT-enabled sensors and AI-driven diagnostics to shift from reactive to predictive maintenance.

Regulatory tailwinds further amplify demand. Stringent safety codes and green building mandates-such as those requiring energy-efficient elevator systems-ensure recurring revenue streams for inspection and compliance services. For instance, the U.S. commercial sector, driven by new malls, offices, and hospitals, is projected to grow at a 5.5% CAGR, outpacing other verticals.

ATIS: A Case Study in M&A-Driven Scalability

American Testing and Inspection Services (ATIS), a portfolio company of Thompson Street Capital Partners (TSCP), exemplifies how strategic acquisitions can unlock value in this sector. Since its founding in 2012, ATIS has grown to serve over 15,000 customers and manage nearly 100,000 elevators across 40 U.S. states and Canada. Its 2025 acquisition of M.A.N Elevator Inspections-a Florida-based provider of code-compliant elevator inspections-illustrates a textbook private equity value-creation play.

The acquisition expanded ATIS's footprint in southeastern Florida, a region experiencing rapid commercial and residential development. By integrating M.A.N's local expertise with ATIS's national network of over 200 licensed QEI (Qualified Elevator Inspector) professionals, the firm aims to accelerate growth while maintaining high service standards. This aligns with TSCP's broader strategy of consolidating fragmented markets through targeted acquisitions. For example, ATIS previously acquired Technical Inspection Agency USA's operations in Nevada and Arizona, further solidifying its geographic reach.

Recurring Revenue and Operational Resilience

ATIS's business model is built on recurring revenue, a hallmark of high-quality industrial services. The company generates stable cash flows from annual inspection contracts, managed services, and compliance consulting. Data from its parent company indicates that ATIS has achieved over $10 million in annual revenue since 2013, with organic growth and acquisitions driving expansion. Its customer base spans 20,000 clients, many of whom require ongoing inspections mandated by regulatory bodies-a structural advantage in an industry prone to cyclical construction slowdowns.

Technological integration further enhances scalability. ATIS leverages digital platforms and mobile applications to streamline workflows, reducing operational costs and improving client retention. As the industry adopts IoT and AI for predictive maintenance, firms like ATIS are well-positioned to capture incremental value by offering data-driven insights to building operators.

Private Equity Synergies: TSCP's Value-Creation Playbook

Thompson Street Capital Partners' investment in ATIS underscores the alignment between elevator inspection services and private equity strategies. TSCP's approach combines geographic expansion, operational efficiency, and technological modernization to drive EBITDA growth. For instance, the firm's acquisition of ATIS in 2012 laid the groundwork for a decade of strategic M&A, with the M.A.N deal representing the latest phase of its growth thesis.

The firm's value-creation playbook includes:
1. Market Consolidation: Targeting regional players with complementary geographies to create a national footprint.
2. Operational Standardization: Deploying best practices across acquired entities to reduce costs and improve service quality.
3. Tech-Driven Innovation: Investing in digital tools to enhance service delivery and client engagement.

These strategies mirror broader private equity trends in industrial services, where recurring revenue and defensible market positions are prioritized over cyclical manufacturing or construction plays.

Conclusion: A Compelling Investment Thesis

Vertical transportation infrastructure is a high-conviction niche for investors seeking scalable, recurring revenue in a capital-light sector. ATIS's acquisition of M.A.N Elevator Inspections exemplifies how strategic M&A can accelerate growth while leveraging regulatory and technological tailwinds. With a projected $2.5 billion North American market by 2033 and a CAGR of 9.2%, the sector offers a compelling risk-reward profile for private equity firms willing to invest in infrastructure-enabling services. As urbanization and smart building adoption accelerate, companies like ATIS-backed by TSCP's disciplined value-creation strategies-stand to outperform in a sector poised for long-term dominance.