KKR, a leading global investment firm announced an agreement to sell GeoStabilization International to Leonard Green & Partners. GSI is a leading provider of geohazard mitigation solutions and roadway safety services. The sale delivers a return of five times the equity invested by KKR, and all GSI employees will receive substantial cash payouts on their ownership stakes in the Company.
Since KKR acquired GSI in December 2018, the Company has experienced significant growth resulting from KKR’s investments in the business, including in employees, business infrastructure, service expansion and corporate development, all of which contributed to a near-tripling of revenue and EBITDA. Over this roughly six-year ownership period, the Company successfully grew its family of brands and services, including an expansion into complementary roadway safety services. GSI also significantly enhanced worker safety and increased its rate of delivery for customers.
As a result of GSI’s all-employee ownership program, all of GSI’s more than 900 employees will receive cash payouts upon closing of the transaction. This includes GSI’s over 550 field service colleagues, with the payouts for employees joining before December 2023 ranging from three months to over three years of annual pay, depending on tenure and job level. Employees will also receive pre-paid personal financial coaching and tax preparation services.
KKR and GSI were advised by Harris Williams and UBS as M&A advisors, and Kirkland & Ellis as legal advisor on the transaction.
“It has been an honor working alongside Dominic, the management team, and GSI’s many talented employees to build on the Company’s strong legacy of serving customers and driving innovation. Through our strategic partnership we have expanded the Company’s reach, added service capabilities, and delivered on our mission to protect the public from the dangers of geohazards – all while investing significantly in GSI’s employees and our communities,” said Brandon Brahm, Partner at KKR and Co-Head of KKR’s Ascendant Strategy.
“This is a great outcome for all GSI employee-owners and our limited partners in KKR’s Americas XII Fund and demonstrates our ability to be value-added strategic partners with middle market sized businesses,” he added.
“This transaction is a testament to our years of collaboration with KKR and also reflects the dedication and hard work of the entire GSI team. KKR catalyzed our all-employee ownership program, developing an ownership culture that has made us even stronger. We are very proud that all GSI colleagues will share in this fantastic outcome,” said Dominic Ivankovich, CEO of GSI.
“GSI is a prime example of what ownership cultures can accomplish within the services sector and speaks to the power of an engaged workforce. This tremendous outcome recognizes the work GSI’s employees have done to create value, not just for the company but for themselves. GSI will be in great hands with LGP, a fellow partner in Ownership Works, who shares our deep commitment to ownership and will carry on this effort at GSI following the close of this transaction,” said Pete Stavros, Co-Head of Global Private Equity at KKR.
