KKR has agreed to acquire Quadion LLC (DBA Minnesota Rubber and Plastics), a provider of elastomer and thermoplastic solutions, from Norwest Equity Partners.
Minnesota Rubber and Plastics (MRP) is a contract manufacturer of elastomer and thermoplastic products that are used in medical, water, industrial and other end markets. The company’s capabilities include design, develop and manufacturing of custom products for harsh environments, tight tolerances and technically demanding applications, including multi-material solutions.
The company has a specialization in micro-molding and also produces its own brand of O-rings and sealing products under the Quad-Ring brand name. MRP, led by CEO Jay Ward, is headquartered in Minneapolis with additional facilities in France and China (www.mnrubber.com).
Norwest Equity Partners acquired MRP in September 2012. “NEP provided exceptional support and strategic insights to build a strong foundation for growth. We are excited to work with KKR, a global leader who has industrial expertise and a shared vision, to capitalize on this foundation and continue to provide our valued customers integrated elastomer and plastic solutions in critical applications,” said Mr. Ward.
NEP makes equity investments of $30 million to $250 million in companies that have more than $10 million in EBITDA. Sectors of interest include agriculture, business services, consumer, distribution, industrials, energy, and healthcare. In April 2015, NEP closed Norwest Equity Partners X LP, a $1.6 billion fund and Norwest Mezzanine Partners IV LP, an $800 million fund formed by NEP’s affiliated mezzanine investment firm, Norwest Mezzanine Partners. NEP is based in Minneapolis (www.nep.com).
“MRP is a great example of our firm’s investment strategy. Over the last six years, we worked closely with management to significantly impact the performance of the company to position it for the next chapter of growth and success. KKR is a wonderful fit for MRP,” said Tim DeVries, NEP Managing Partner.
The buy of MRP is KKR’s second acquisition of a middle-market business in the industrials sector and is being funded through KKR’s Americas XII Fund.
“We have been very impressed by MRP’s innovative technologies and differentiated solutions, including over 1,000 custom rubber, plastic and silicone formulations, and tremendous technical resources committed to delivering market-leading innovations for their customers,” said Pete Stavros, the head of KKR’s industrials investment team. “We’re proud to support the company and see considerable opportunity for it to continue to grow. As with our other industrials portfolio companies, we plan to implement a broad-based employee engagement model.” KKR believes employee engagement is a key driver in building stronger businesses. The cornerstone of this strategy is to allow all employees to take part in the benefits of ownership by granting them the opportunity to participate in the equity return directly alongside KKR.
KKR (NYSE: KKR) makes private equity, fixed income and other investments in companies in North America, Europe, Asia and the Middle East. KKR was founded in 1976 and in addition to its New York headquarters has offices in 19 cities around the world (www.kkr.com).
Houlihan Lokey (www.hl.com) was the financial advisor to both MRP and NEP.
Fully committed financing is being led by KKR Capital Markets and is being provided by Crescent Mezzanine Partners and PSP Investments Credit USA.
This transaction is expected to close by year-end 2018.
© 2018 Private Equity Professional | October 15, 2018
