KKR Enhances Returns with Sale of GeoStabilization to LGP
KKR Completes Sale of GeoStabilization International
KKR has officially announced a significant transaction involving the sale of GeoStabilization International (GSI) to Leonard Green & Partners, L.P. (LGP). This strategic move underscores KKR's commitment to maximizing shareholder value while fostering employee ownership within GSI.
Growth and Achievements Under KKR
Since KKR's acquisition of GSI in late 2018, the company has witnessed remarkable growth. GSI has become a recognized leader in geohazard mitigation, providing essential services that enhance roadway safety. This transaction is projected to return five times the equity invested by KKR, emphasizing the substantial value generated during their stewardship.
Strengthening Employee Ownership
One of the most noteworthy aspects of this deal is its impact on GSI's employees. As part of the all-employee ownership program initiated under KKR’s leadership, GSI’s workforce, exceeding 900 individuals, will receive significant cash payouts. These payouts are designed to reward employees based on their tenure and contributions, reaffirming the culture of ownership nurtured at GSI.
Community and Workforce Commitment
Dominic Ivankovich, the CEO of GSI, praised the years of collaboration with KKR, highlighting how their partnership has enriched the company’s culture and operational capabilities. He expressed pride in the gains that all employees will share from this outcome. This commitment is also reflected in the financial coaching and tax preparation services being extended to employees, ensuring they are well-prepared to manage their newfound financial gains.
Future Directions with Leonard Green & Partners
Moving forward, LGP is set to take on the stewardship of GSI. The firm is known for its dedication to enhancing ownership culture within its portfolio companies and aligning interests, making it a fitting successor. KKR executives believe that GSI will continue to thrive under LGP, reinforcing the foundation built during KKR's ownership.
Industry Recognition and Initiatives
Since its inception, KKR has implemented numerous initiatives aimed at fostering employee ownership across its investment landscape. This includes programs that have successfully awarded billions of dollars in equity to employees of its portfolio companies. By supporting such initiatives, KKR has demonstrated the benefits of aligning employee interests with company success, resulting in enhanced performance and sustainable growth.
Conclusion
In conclusion, the sale of GeoStabilization International by KKR to Leonard Green & Partners marks a pivotal moment not just for the companies involved, but also for the employees who have been instrumental in driving GSI's success. By focusing on employee ownership and community development, this transaction promises to uphold the legacy and mission of GSI while paving new paths for future achievements.
Frequently Asked Questions
What is the significance of KKR's sale of GSI?
The sale signifies a positive return on investment for KKR, while also enhancing the employee ownership model at GSI.
How many employees will benefit from the cash payouts?
Over 900 employees at GSI will benefit from substantial cash payouts as part of the transaction.
What were some achievements during KKR's ownership?
GSI tripled its revenue and EBITDA, expanded service capabilities, and reinforced its commitment to safety and innovation.
Who will manage GSI after the sale?
Leonard Green & Partners will take over the management of GSI and aims to continue fostering the employee ownership culture.
What role do employee ownership programs play in company success?
Employee ownership programs can enhance engagement, productivity, and loyalty, driving overall company performance and success.
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