New State Closes ESOP Sale of Klein Hersh

New State Capital Partners has completed the sale of Klein Hersh, an executive recruiting firm focused on the healthcare and life sciences industries, through an Employee Stock Ownership Plan (ESOP).

Klein Hersh provides consulting and contract staffing alongside senior-level hiring services for pharmaceuticals, biotechnology, and healthcare companies. Klein Hersh was founded in 1998 and is headquartered ten miles north of Philadelphia in Horsham, Pennsylvania.

“Our 48 employees have grown the number of executives we’ve placed more than 150%, and together with New State, have been instrumental in doubling EBITDA in the less than 18 months,” said CEO Jason Hersh. “As an executive search firm, people are our business, and giving our employees the opportunity to enjoy the benefits that come with ownership is the epitome of that ethos. We look forward to continuing our work with New State to build on our success.”

New State, which first invested in Klein Hersh in November 2020, will retain a minority stake in the company.

New State invests up to $100 million of senior debt, junior debt, and equity in companies with $8 million to $40 million of EBITDA that are active in the business services, industrials, and consumer sectors. The sale of Klein Hersh is the second ESOP transaction by the firm following its recapitalization of Gautier Steel, a Pennsylvania-based operator of three plate and flat bar rolling mills and a specialty metal (stainless steel and titanium) rolling mill in 2017. New State was founded in 2013 by David Blechman and is based in Larchmont, New York.

“We are excited to offer Klein Hersh’s employees a meaningful opportunity to share in the value they have helped create,” said John Beauclair, a senior principal at New State. “The ESOP structure aligns with New State’s ESG goals, and we will continue to look for future opportunities to provide financing options that enhance employee ownership.”

Financing for this transaction was led by Star Mountain Capital, with debt advisory services from Piper Sandler. Kroll provided valuation services and Citizens was the financial advisor to Klein Hersh.

© 2022 Private Equity Professional | June 1, 2022