Novacap Exits Knowlton Development

Cornell Capital and HarbourVest Partners have acquired Knowlton Development Corporation, a portfolio company of Novacap since October 2014.

Members of the senior management team of Knowlton are investing alongside Cornell and HarbourVest, and Caisse de dépôt et placement du Québec (CDPQ) and Investissement Québec (IQ) are rolling over significant stakes of their equity as part of the transaction. Both CDPQ and IQ co-invested with Novacap on the October 2014 acquisition of the company.

Knowlton Development Corporation (KDC) is a contract manufacturer of regulated and non-regulated personal care products including lotions, soaps, fragrances, cosmetics and deodorants. The company also manufactures home care products (disinfectants, cleaners, and detergents), industrial products (floor waxes, protectants, cleaners, degreasers, and disinfectants), and auto care products (car waxes, protectants, cleaners, and air care).

KDC, founded in 2002, has approximately 4,800 employees and is headquartered near Montreal in Longueuil, Québec with 10 operating facilities located throughout North America (www.kdc-one.com).

“The investment from Cornell Capital comes at the perfect time for KDC,” said Nicholas Whitley, CEO of KDC. “Cornell Capital believes fully in the value that KDC’s unified capabilities provide to our customers. Their partnership with our existing management will provide KDC with the capital to continue our unmatched investment in top-tier product innovation and world-class manufacturing capabilities, as well as support our domestic and international growth strategy. This is a very exciting time for KDC, our customers and employees.”

Cornell Capital was founded in 2013 by Henry Cornell, the former Vice Chairman of Goldman Sachs’ Merchant Banking Division, to invest in companies in the consumer, energy, financial and industrial sectors. In June 2018, the firm held a final closing of its inaugural private equity fund, Cornell Capital Partners LP, with total capital commitments of $1.3 billion.  The firm has offices in New York and Hong Kong (www.cornellcapllc.com).

“KDC fits seamlessly with Cornell’s strategy to invest in companies with excellent management teams and in industries that are thriving and poised for international expansion. We are impressed with the growth that the company has enjoyed under Nick’s leadership, and we have a shared vision for building on this strong trajectory,” said Mr. Cornell. “Everything at KDC is best in class – from its consistent investment in innovation, to its manufacturing capabilities, day-to-day execution, customer service and culture. Leveraging our global network, we look forward to working with management to help expand KDC’s operations, particularly in Europe and Asia.”

HarbourVest invests in venture capital, buyout, mezzanine debt, credit, and real estate through primary fund investments, secondary purchases, and direct co-investments.  The firm has more than 400 employees, including 100 investment professionals, located in Asia, Europe, Latin America, and the United States.  In over 30 years of investing in private equity, the firm has committed more than $34 billion to newly-formed funds, completed over $19 billion in secondary purchases, and invested $8 billion directly in operating companies. HarbourVest is headquartered in Boston with additional offices in Beijing, Bogotá, Hong Kong, London, Seoul, Tel Aviv, Tokyo, and Toronto (www.harbourvest.com).

Novacap, with $2.3 billion in assets under management, invests in middle market companies within traditional industries and in companies in the technology, media and telecommunications sector.  The firm was founded in 1981 and is based in Quebec (www.novacap.ca).

Guggenheim Securities is the financial advisor to KDC.

This transaction is expected to close by year end 2018.

© 2018 Private Equity Professional | November 8, 2018

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