In the wake of its blockbuster $2.2 billion IPO, Larry Gies’ Madison Industries is proving that even the most unglamorous companies can deliver outsized returns

Air filters, ventilation fans, air-conditioning systems, infrared heating machines; the trove of companies inside Madison Industries’ portfolio reads as more of an industrial supply catalog than a profit juggernaut. Yet a few months ago when one of its subsidiaries specializing in HVAC called Madison Air debuted on public markets raising $2.2 billion in an IPO that valued the operation at $13 billion, investors couldn’t buy up its shares fast enough. The Chicago-based company, which is one of the largest makers of air conditioning and air purification systems, is benefiting from the surge in demand for data centers, where 24-7 cooling is critical. Today Madison Air has a market cap of $20 billion, not only giving its founder Larry Gies a net worth of $6 billion, but also validating a simple but powerful playbook he has run for decades: buy seemingly mundane businesses, roll them up, and sell them at scale.

Over the last year, Gies’ roll up strategy has delivered several high-profile exits. Besides his Madison Air IPO, his Madison Industries sold its filtration unit (Madison Filtration Group) to Parker-Hannifin for $9.25 billion in November, followed by a $1.25 billion sale of its fire and safety business (Madison Fire & Rescue) to 3M and Bain Capital in March. The deals shine a light on one of the nation's least known, but most successful dealmakers.

“Man, the guy can sniff markets,” says Todd Bluedorn, former vice chair of Madison Industries. “He buys on the cheap, he sells at the peak – and when he buys, it’s from corporations who are running and he sells them to corporations who have more money than they know what to do with.”

Rollups are nothing new in the world of finance and since 2004, Gies’ Madison Industries has completed over 80 acquisitions across more than 20 countries, according to data compiled by Forbes. But Gies does not chase shiny objects like artificial intelligence startups. His focus is almost exclusively on the most unglamorous corners of the industrial economy. Madison owns dozens of companies (see table) and lists seven “verticals” or areas of focus on its website – Filtration, Medical, Safety, Energy, Industrial Solutions, Air and “Seakeeper”, which are motion control devices for marine applications.

Though Gies refused to speak to Forbes for this article, he appears to have learned the art of bargain hunting from the late former billionaire Michael Heisley, founder of Chicago’s Heico Companies, which made a specialty of buying up and turning around near bankrupt rust belt companies. Heisley hired Gies in 1992, fresh out of Northwestern’s Kellogg School of Management where he earned an MBA.

According to a 2019 article in Champaign, Illinois News Gazette, Gies was raised in rural Mendota, Illinois. His father worked a manufacturing job at Conco Inc. (which was owned by Heisley) and his homemaker mother, from the Netherlands, was orphaned during World War II. She survived only because her parents dropped her at a Catholic orphanage at three months, with a rosary around her neck. Gies graduated from the University of Illinois Urbana-Champaign with an accounting degree in 1988, then started his career at Touche Ross & Co. (now Deloitte).

After working with Heisley for two years, Gies struck out on his own at 27 to start Madison Capital Partners, a private equity firm in 1994. According to an interview he gave to the Champaign newspaper, he bought his first company by maxing out 10 credit cards and taking a $50,000 loan from a high school friend while his wife worked three jobs. Madison Capital Partners would go on to generate more than $5 billion in revenue, while running somewhat akin to a family office, according to people familiar with Gies.

Around 2012, during a lunch conversation with friends where they reflected about legacy, Gies decided to shift course and pivot his private equity firm into a private holding company: Madison Industries. “I felt unfulfilled after selling a company,” he said at a commencement speech in 2019. “We developed such deep relationships with the teams that ran them and wanted to find a way to keep the businesses forever.”

Private equity firm Madison Capital Partners now serves as the quiet capital engine for Gies’ Madison Industries. Unlike traditional private-equity firms that raise large sums of money to execute multiple deals, Madison operates a mix – intermittently raising capital and sometimes running deal-by-deal pools, similar to a Special Purpose Vehicle (SPV). Madison Capital Partners remains a registered investment adviser, managing roughly $4.8 billion across 13 separate funds, according to regulatory filings.

Gies’ pitch to acquisition targets borrows a page from Warren Buffett’s playbook: Madison says it buys companies to hold them “forever” and work with existing leadership. For founders of smaller, often family-run businesses, that promise can be very compelling.

“They really got our business going – it was a big cultural shift from a family-run company to something more structured – but we grew,” says Christopher Cole, a former national sales director at Drucker Diagnostics, which Madison acquired in 2015. “They only sold one company since I was there, and they acquired a bunch of companies.”

Gies’ other big advantage is speed: he maintains relationships with large corporations looking to divest non-core assets, positioning Madison as a ready buyer. In 2016, $12 billion-revenue German automotive supplier MAHLE sold its entire industrial filtration business to Madison, which later became the foundation of Madison Filtration Group.

Like many roll-up operators, Madison relies on debt and outside capital to fuel some of its deals, tapping capital from both outside partners and existing investors. In 2025, for example, it acquired indoor air company AprilAire for roughly $2.3 billion, funded primarily with debt, alongside a mix of cash and equity. About $1.75 billion came from a newly raised term loan arranged for the deal, with additional capital existing shareholders rolling over their equity.

Gies will also make VC style equity investments in startups. In 2024 Madison partnered with investment firms Barings and Sequoia Heritage to buy SimX, a Mountain View, CA-based company which runs a platform that simulates medical procedures and counts The Mayo Clinic, Stanford, NYU, and the US Air Force as clients. Madison’s bid stood out because it came with no financing conditions, as the company already had the money lined up and didn’t need to raise funding to close the deal, according to Brian Gerner, an investment banking director at Capstone Partners, who advised SimX on the sale.

“We prefer to deal with parties that have ample dry powder to do deals at the prices they say they can pay,” he says.

Despite largely avoiding the public eye, Gies stepped into the spotlight in 2017 with a $150 million donation to the University of Illinois, which renamed its business school in his honor. He has also taught as a guest lecturer for more than 30 years at its business school. In 2025, he followed his initial gift with a $100 million gift to the university’s athletics program, after which the school renamed its football stadium after him (now called the Gies Memorial Stadium).

Inside Madison, colleagues describe Gies as a hands-on, but measured leader. He goes as far as reviewing financials across the company’s portfolio weekly, sometimes daily, but is willing to defer to other operators on day-to-day decisions. He personally attends quarterly business reviews at the portfolio companies and brings in high-profile speakers to reinforce company culture, from former Alabama football coach Nick Saban to former Secretary of State Condoleezza Rice.

“For a guy of his accomplishment and wealth, he has the least ego of anyone I’ve seen,” Bluedorn says. “If he had a strong view, he made the call, but he wasn’t the kind of guy who thought he knew everything.”

Madison Air’s public market debut, which is the largest U.S. industrial listing in three decades, represents a new challenge for Gies, given his apparent preference for remaining out of the limelight. In 2025, the company generated more than $3.3 billion in revenue and $124.3 million in net income, with about two-thirds of sales coming from commercial customers, including 15% from cooling systems for data centers.

The onslaught of AI is likely to be a double-edged sword for the kinds of manufacturing company bargains Gies typically targets. Agentic AI and advances in automation, data driven supply chains and predictive maintenance could usher in huge productivity boosts, but they are also sure to create turmoil for companies and their employees.

Says Bluedorn, former vice chair of Madison, “Larry used to say that the buffalo was the spirit animal of Madison. When a storm rolls in, most animals run away but the buffalo runs straight into it.”

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