The 21-year-old firm—which focuses on companies that manufacture consumer and industrial products with sales of between $100 million to $500 million annually—has already committed about 20% of the fund across four deals.
In light of the darkening economic outlook, the firm also plans to “be looking selectively at business and health care services companies with operational issues that can be repositioned for growth,” says Co-Managing Partner Sam Frieder.
Altogether, the fund will be used to acquire anywhere from 10 to 12 companies over the course of three or four years. Two such deals are already closed. Another is scheduled to be announced on Monday, and a fourth will close in April.
The first investment from Kohlberg’s sixth buyout fund came last June, when the firm paid the British firm Tomkins $113 million for windshield-wiper maker Trico Products Corp. In October, Kohlberg spent another $295 million for Hoffmaster Group, which makes specialty napkins, placemats, table covers and other items for the restaurant and lodging industries; the company was previously a subsidiary of Solo Cup, which makes disposable foodservice products from its Highland Park, Ill., headquarters.
Kohlberg introduces its newest company on Monday: United States Infrastructure Corp., whose employees mark where utilities, such as gas and cable lines, will be laid before a construction or excavation project gets underway. Formed from Kohlberg’s $85 million acquisition of SM&P Utility Resources Inc. in early February, and its subsequent $55 million purchase of Central Locating Services Ltd., the transaction “combines the number two and number three provider of infrastructure locating services to create the number one provider,” Frieder says.
Kohlberg, along with Canadian businessman W. Graeme Roustan, also recently agreed to buy hockey equipment and apparel manufacturer Bauer Hockey, based in Greenland, N.H., from Nike, for $212 million. The acquisition of Bauer, which had $160 million in revenue in 2006, is expected to close in April.
Kohlberg, based in Westchester County, N.Y., launched its sixth fund in March 2007, and held a first close of about $1 billion last June. It held several subsequent closings throughout the summer and its final close on March 8. About 65 investors participated, including a “substantial” number of public pension and corporate pension funds and university endowments, according to the firm.
Frieder says that the fund also counts among its LPs “quite a few” insurance companies and financial institutions, as well as a smaller number of fund of funds and wealthy individual investors.
Kohlberg’s fifth fund closed with $800 million in 2004. Frieder says that the firm has no plans to add deal partners to the firm, although he adds that “we have rotating associating every few years, and we may add an extra one.” —Constance Loizos