KKR has launched a new strategy to acquire and build businesses in the testing, inspection, and certification (TIC) industry.
As part of this new effort, KKR has partnered with Amit Agarwal, a former senior executive of Thermo Fisher and Omega Engineering, and Andy Silvernail, a KKR executive advisor and the former chairman and CEO of pump manufacturer IDEX Corporation. Mr. Agarwal will lead the platform as its chief executive officer, working closely with Mr. Silvernail, who will serve as its chairman.
Mr. Silvernail joined KKR as an executive advisor in 2022. Earlier, in 2021, he was the chairman and CEO of privately held and Chicago-based Madison Industries; and from 2009 to 2020 he was the chairman and chief executive officer of IDEX.
“I am excited to work together with Amit to build a leading business in the TIC industry,” said Mr. Silvernail. “This is an attractive space, benefiting from mission-critical products and services, favorable long-term growth trends, and a fragmented market structure across both instrumentation and services.”
Mr. Agarwal was with Thermo Fisher from 1997 to 2020 including as the vice president and general manager of its water and lab products division – a $250 million revenue business – since 2017. Most recently, from 2020 to 2022, he was the president and chief executive officer of Omega Engineering, a supplier of more than 165,000 SKUs of instrumentation equipment used to measure temperature and humidity, flow and level, and pressure. Specific products of Omega include thermocouple probes and assemblies, pressure gauges and switches, and air velocity measurement systems.
“I am thrilled to collaborate with Andy and the KKR team to find, acquire and develop attractive businesses in the TIC industry, which is a more than $330 billion global market across instrumentation and services,” said Mr. Agarwal. “We believe our experience growing highly innovative and technical businesses positions us as a value-add strategic partner to TIC companies that provide specialized tools and services for sectors benefiting from attractive long-term tailwinds. I’m particularly encouraged by KKR’s approach to creating lasting value through shared ownership and employee engagement, which resonates with my approach to leadership.”
KKR will invest up to $250 million in the new platform – yet unnamed – through its Ascendant Fund which invests in North America-based middle market companies that operate in the information technology, healthcare, textile, financial services, consumer products and services, and media and information services sectors. The Ascendant Fund is part of KKR’s broader Americas private equity platform.
After completing the first TIC platform acquisition, KKR will execute its employee engagement model that seeks to make all employees shared owners of an acquired business. KKR uses this model in all control investments across its entire Americas private equity platform. Since 2011, according to KKR, its portfolio companies have awarded billions of dollars of total equity value to over 50,000 non-senior employees across nearly 30 companies.
“We look forward to working with Andy and Amit, both proven leaders and innovators, to acquire high-quality businesses and build a scaled player in the TIC industry with an integrated suite of best-in-class capabilities,” said Brandon Brahm, a partner and co-head of KKR’s Ascendant strategy. “Executive-led platforms are an important element of our middle-market strategy and we believe KKR’s ability to recruit world-class talent creates exciting opportunities to build great companies in attractive, but historically fragmented industries.”
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.
© 2023 Private Equity Professional | February 2, 2023
