NEW YORK, July 5, 2021 /PRNewswire/ -- KPS Capital
Partners, LP ("KPS") announced today that it has signed a
definitive agreement to sell its portfolio company, DexKo Global
Inc. ("DexKo" or the "Company"), to Brookfield Business Partners
L.P. (NYSE:BBU) (TSX:BBU.UN) together with its institutional
partners (collectively "Brookfield") for $3.4
billion. Brookfield Business Partners L.P. is the
flagship listed business services and industrials company of
Brookfield Asset Management.
DexKo is the world's leading supplier of advanced chassis
technology, chassis assemblies and related components with more
than 130 years of experience in trailer and caravan
components. DexKo was founded at the end of 2015 through the
combination of Dexter and AL-KO Vehicle Technology. KPS
acquired DexKo in 2017 from The Sterling Group L.P., who retained a
minority ownership stake in the Company. Headquartered in
Novi, Michigan, DexKo employs more
than 6,000 associates with 50 production facilities and 50
distribution centers worldwide.
KPS and DexKo's management team executed a successful growth
strategy and created a large-scale, leading global industrial
components manufacturer. In under four years of KPS' ownership,
DexKo completed 15 acquisitions, investing over $600.0 million to significantly broaden DexKo's
product offering, expand the Company's geographic, end-market and
channel reach and strengthen DexKo's position in its existing
markets. KPS and management transformed DexKo by investing in
automation, reducing manufacturing complexity, enhancing the
Company's procurement processes and improving DexKo's commercial
strategy. As a result of these initiatives, DexKo doubled its
profits, achieved industry-leading margins and generated
significant free cash flow under KPS' ownership.
Raquel Palmer, Co-Managing
Partner of KPS stated, "DexKo exemplifies the KPS investment
strategy of seeing value where others do not, buying right and
making businesses better, across decades, economic and business
cycles, geographies and industries.
"We are proud of DexKo's extraordinary transformation under our
ownership. DexKo demonstrates our ability to partner with
world-class management teams to build industry-leading
manufacturing companies on a global basis. The Company's
success is a direct result of KPS' unwavering commitment to and
investment in DexKo's organic and strategic growth initiatives and
its people. The Company is well-positioned for continued
growth and industry leadership under Brookfield's ownership.
"We congratulate and thank Fred
Bentley, DexKo's Chief Executive Officer, along with the
Company's senior management team, for their strategic vision and
brilliant execution, which resulted in the Company's significant
growth and value creation under our ownership. We also thank
The Sterling Group, who was an excellent partner to KPS and the
Company over the last four years."
Fred Bentley, Chief Executive
Officer of DexKo, added, "Our partnership with KPS has been
extraordinary. KPS recognized DexKo's strength and potential
from the start and invested to support DexKo's growth ambitions.
DexKo has become a better business as a result of KPS'
investments in our operations and people. KPS supported our
efforts to provide our customers with unparalleled quality,
technology and customer service. In addition, KPS deployed
its significant capital resources and expertise to support DexKo's
acquisitive growth strategy. DexKo is well positioned for
future growth which we look forward to pursuing in partnership with
Brookfield."
Paul Weiss, Rifkind, Wharton
& Garrison LLP served as legal counsel and Goldman Sachs &
Co. LLC, supported by Credit Suisse and J.P. Morgan Securities LLC,
served as lead financial advisor to KPS and DexKo. Completion
of the transaction is subject to customary closing conditions
and approvals.
About DexKo Global Inc.
DexKo is the world's leading
supplier of advanced chassis technology, chassis assemblies and
related components with more than 130 years of experience in
trailer and caravan components. DexKo was founded at the end
of 2015 through the combination of Dexter and AL-KO Vehicle
Technology. Headquartered in Novi,
Michigan, the company employs more than 6,000 associates
with 50 production facilities and 50 distribution centers
worldwide.
About KPS Capital Partners, LP
KPS, through its
affiliated management entities, is the manager of the KPS Special
Situations Funds, a family of investment funds with approximately
$12.8 billion of assets under
management (as of March 31,
2021). For nearly three decades, the Partners of KPS have
worked exclusively to realize significant capital appreciation by
making controlling equity investments in manufacturing and
industrial companies across a diverse array of industries,
including basic materials, branded consumer, healthcare and luxury
products, automotive parts, capital equipment and general
manufacturing. KPS creates value for its investors by working
constructively with talented management teams to make businesses
better, and generates investment returns by structurally improving
the strategic position, competitiveness and profitability of its
portfolio companies, rather than primarily relying on financial
leverage. The KPS Funds' portfolio companies currently have
aggregate annual revenues of approximately $10.9 billion, operate 149 manufacturing
facilities in 22 countries, and have approximately 35,000
employees, directly and through joint ventures worldwide (as of
March 31, 2021, pro forma for recent
acquisitions). The KPS investment strategy and portfolio
companies are described in detail at www.kpsfund.com.
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SOURCE KPS Capital Partners, LP