Kinderhook Closes Busy 2020

Kinderhook Industries is continuing its busy ways with the recently announced buys of healthcare provider AbsoluteCARE, and the buy of modular space provider VESTA Housing.

In December 2020, Kinderhook closed 10 acquisitions giving the firm 30 closed transactions for all of 2020. The buys of AbsoluteCARE and VESTA are Kinderhook’s 7th and 8th platforms in its current fund.

AbsoluteCARE is a Baltimore-headquartered provider of patient-centered ambulatory intensive care services – including medical care, social and behavioral counseling and patient outreach – with five facilities in Atlanta, Baltimore (2), Prince George’s County (Washington DC), and Philadelphia.

“AbsoluteCARE represents a unique opportunity to invest in a growing and innovative primary care provider that is among the first movers in value-based care in the Medicaid and Medicare market,” said Christian Michalik, a managing director at Kinderhook. “AbsoluteCARE is the most advanced patient care provider I have seen that focuses on high acuity Medicaid and Medicare members. The company’s integrated and all-hands-on-deck approach to patient care is proven to both bend the healthcare cost curve and help its members live healthier and happier lives. An AbsoluteCARE center should be in every major city in America.”

“We are excited to partner with Kinderhook to expand the work we do to ensure those who need it get the best care possible,” said CEO Alan Cohn. “AbsoluteCARE has a proven track record of being able to lower costs for our insurance partners by improving the lives of our members. We are excited to be able to deliver that care to more people.”

VESTA, acquired by Kinderhook from Balmoral Funds, is a provider of temporary and permanent modular spaces to the education, industrial, construction, government, and retail sectors.

VESTA operates through two divisions: modular space leasing which leases units from its owned fleet of over 3,200 floors; and modular construction services which is active in the design, manufacturing, and installation of modular buildings. VESTA, led by co-founder and CEO Dan McMurtrie, was founded in 2014 and is headquartered in the Detroit suburb of Southfield, Michigan with additional facilities in Atlanta, Houston, and Miami.

“Partnering with Kinderhook will allow us to continue our ambitious growth strategy over the coming years,” said Mr. McMurtrie. “We believe firmly that VESTA will continue its rise to become the preeminent modular building provider in North America, evidenced by our significant retained ownership in the enterprise. We have been blessed with terrific investment partners throughout our journey and look forward to continuing to execute our growth vision.”

Los Angeles-based Balmoral, the seller of VESTA, invests in corporate carve-outs, restructurings and other special situations. The firm targets investments of $10 million to $60 million of equity in companies that have $30 million to $500 million of revenues.  Balmoral acquired VESTA in November 2018.

“We are excited to partner with VESTA’s best-in-class management team as we look to build a market-leading provider of modular space solutions,” said Rob Michalik, a managing director at Kinderhook. “We believe that VESTA’s complementary business divisions, deep customer relationships, and proven track record of success position the business to capitalize on numerous positive industry tailwinds.”

Kinderhook makes control investments in companies with transaction values of $25 million to $150 million in which the firm can achieve financial, operational and growth improvements. The firm makes investments in non-core divisions of public companies, management buyouts of entrepreneurial-owned businesses, troubled situations, and existing small-capitalization companies lacking institutional support. Sectors of interest include healthcare services; environmental and business services; and automotive and light manufacturing.

Kinderhook’s active December includes five add-on acquisitions:

  • Combine World, a Canada-based supplier of new, used, and reconditioned farm and light construction equipment and replacement parts, as an add-on acquisition to All States Ag; and the buy of TractorJoe, a Minnesota-based direct-to-consumer online distributor of new and used replacement parts for tractors and other agriculture machinery as an add-on acquisition to All States Ag. Kinderhook acquired All States Ag, a supplier of used, rebuilt and aftermarket parts for all makes and models of tractors, combines and other farm machinery, in May 2018. All States Ag has now completed seven add-on acquisitions under Kinderhook ownership.
  • May River Disposal, a provider of residential waste management services in Bluffton, South Carolina, as an add-on to Capital Waste Services, a Columbia, South Carolina provider of solid waste hauling services for residential, commercial and industrial waste generators. Capital Waste was acquired in August 2019 from Hawk Capital Partners and the buy of May River is its fourth add-on acquisition under Kinderhook. 
  • Hope Valley Industries, a Rhode Island-based provider of all-weather floor mats to automotive original equipment manufacturers, as an add-on to Vehicle Accessories, Kinderhook’s automotive aftermarket parts holding company. Hope Valley is the fifth add-on for Vehicle Accessories.
  • PartCycle Technologies, an Alabama-based e-commerce marketplace for recycled original equipment manufacturer automotive parts, as an add-on to Original One Parts which Kinderhook acquired in June 2020. PartCycle is Original One’s first add-on acquisition.

New York City-based Kinderhook has over $3.3 billion of committed capital and has closed more than 250 investments and follow-on acquisitions since its founding in 1983.

© 2021 Private Equity Professional | January 12, 2021

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