Cerberus Capital Management has agreed to acquire Kellermeyer Bergensons Services (KBS), a provider of facilities management services to retail and grocery chains, from GI Partners. GI Partners acquired KBS through its $2 billion fourth fund in November 2014 from Kohlberg & Company.
KBS is a provider of technology-enabled, facility management services to customers in the industrial, commercial, logistics, retail, and grocery sectors across North America. The company’s services include janitorial, landscaping, parking lot sweeping, snow removal, HVAC, and handyman repair.
KBS’ customers – which have more than 64,000 active locations in all 50 US states, Canada, and Puerto Rico – include large and small retail chains, distribution centers, manufacturing plants, schools, commercial buildings, stadiums, health care facilities, and restaurants. KBS is led by CEO Mark Minasian and is headquartered in Oceanside, CA.
“We are extremely gratified by the success of KBS during our five-year ownership and working with Mark and the KBS management team to build a leading platform serving a number of growing industries,” said Hoon Cho, a managing director at GI Partners. “Leveraging our experience from investments in the technology and facilities management sector, we were able to align with management to create a company with greater scale, enhanced capabilities, and immense future potential.”
In August 2019, GI Partners completed an add-on acquisition for KBS with the buy of PE Facility Solutions (DBA Pristine Environments), a San Diego-based provider of facility management and contract cleaning services from Massachusetts-based Great Elm Capital. Another 2019 add-on acquisition was the April buy of Capital Contractors, an Islandia, NY-based provider of janitorial and facilities maintenance services to the education, hospitality, healthcare, commercial, retail and industrial markets, from Palladium Equity Partners.
Earlier add-ons closed by GI for KBS were Fort Lauderdale-based Emmaculate Reflections in March 2018; Rhode Island-based East Coast Lot and Pavement and National Maintenance Systems in January 2018; New Orleans-based Empire Services in December 2017; Salt Lake City-based Varsity Facility Services in August 2017; and Baltimore-based Image by J&K in March 2017.
GI Partners makes control equity investments in companies with enterprise values of $250 million to $1 billion that are active in the IT infrastructure, healthcare, software, and services sectors. The firm also invests in real estate. In November 2017, the firm held a final closing of GI Partners Fund V LP at an oversubscribed and hard cap of $2.8 billion. In March 2019 Blackstone, through its Strategic Capital Holdings Fund, acquired a minority stake in the firm. GI Partners was founded in 2001 and is based in San Francisco (www.gipartners.com).
“We thank GI Partners for supporting the expansion of our business over the past five years,” said Mr. Minasian. “As we enter the next phase of our evolution, we are very excited to be partnering with Cerberus. Their global scale, deep expertise in services, and unmatched operating resources will position KBS better than ever to continue to lead commercially, creating opportunity and value for years to come.”
“This is an exciting opportunity to partner with a market-leading business supported by a tech-enabled platform,” said Robert Warden, co-head of private equity and a senior managing director at Cerberus. “With its full suite of solutions and leading technological capabilities, KBS has become the partner of choice for customers in the facility services industry. We believe there are attractive opportunities ahead for the company and look forward to working alongside Mark and the talented KBS team to further build on its success.”
Cerberus has approximately $40 billion of assets under management and invests in three strategies: global credit opportunities (which includes non-performing loans, corporate credit and distressed debt, mortgage securities and assets, and direct lending); private equity; and real estate. The firm was founded in 1992 and is headquartered in New York.
This transaction is expected to close in the fourth quarter of 2019.
© 2019 Private Equity Professional | October 23, 2019
