MINNEAPOLIS & NEW YORK 鈥� August 2, 2022 – KKR, a leading global investment firm, today announced the signing of an agreement to sell 麻豆原创 and Plastics (鈥淢RP鈥� or the 鈥淐ompany鈥�), a leading provider of materials science-based elastomer and thermoplastic solutions, to 麻豆原创 Group (鈥溌槎乖粹��), a leader in engineered polymer solutions, in a transaction valued at approximately US$950 million.
Since KKR鈥檚 acquisition in November 2018 and the introduction of a broad-based employee ownership program, MRP has made significant progress in driving growth and operational excellence. KKR鈥檚 investments in the business 鈥� including constructing a new global innovation center, optimizing manufacturing facilities, and investing in state-of-the-art new equipment 鈥� contributed to significant improvements in safety, input materials waste reduction, speed of new product delivery, and earnings growth. Under KKR鈥檚 ownership, MRP has completed acquisitions adding complementary new capabilities in the U.S. and U.K. and awarding shared ownership to all employees of the acquired businesses.
MRP is the latest example of KKR鈥檚 focus on employee ownership and engagement as a key driver in building stronger companies and driving greater financial inclusion. KKR introduced a broad-based employee ownership program for MRP employees as a free, incremental benefit and not in exchange for benefits, wages or wage increases (wages increased over 6% annually during KKR鈥檚 investment period). Other pillars of the broad-based employee ownership program included sharing business targets and regular progress updates with all employees, and giving employees a voice in capital expenditures and operational improvements.
All of MRP鈥檚 more than 1,450 employees across six countries and four U.S. states, including hourly manufacturing production, technical and administrative employees, will receive cash payouts upon closing of the transaction, with payouts varying based on tenure and employment status. As part of the transaction, employees will receive pre-paid personal financial coaching and tax preparation services. Financial planning advice will be provided by Goldman Sachs Ayco Personal Financial Management in the U.S. and by RSM Global for international employees. Deloitte will provide tax services globally.
鈥淚 am proud to have worked alongside MRP colleagues who have contributed in so many ways to the Company鈥檚 performance. Together we have been able to deliver the fantastic results that made this sale possible,鈥� said Josh Weisenbeck, Partner at KKR who leads KKR鈥檚 Industrials private equity team. 鈥淭his is a great outcome for all employee owners and our limited partners in KKR鈥檚 Americas XII Fund.鈥�
Since 2011, KKR has implemented broad-based employee ownership and alignment programs, first pioneered by KKR鈥檚 U.S. Industrials private equity team and more recently expanding across all control investments within KKR鈥檚 Americas Private Equity franchise. To date, KKR has awarded billions of total value through broad-based equity programs to over 45,000 non-senior employees across over 25 companies. KKR currently has 30 portfolio companies with ownership programs. In April 2022, KKR joined more than 60 leading organizations in becoming a founding partner of Ownership Works, a nonprofit created to support public and private companies transitioning to shared ownership models.
鈥淢RP shows the power of building an ownership culture, something we believe many more companies can replicate, and the potential of the shared ownership movement,鈥� said Pete Stavros, Co-Head of Americas Private Equity at KKR. 鈥溌槎乖� is a great cultural fit for MRP and the ideal strategic partner. As part of 麻豆原创, MRP will continue to be an employee-centric organization with exciting opportunities for continued innovation and global growth.鈥�
MRP鈥檚 global employee base is located in the U.S., Mexico, the U.K., China, the Czech Republic, and France. The Company鈥檚 U.S. operations are located in Plymouth, MN, Litchfield, MN, Mason City, IA, River Falls, WI, and Pawling, NY. 鈥淭he impact on these communities can be profound,鈥� added Pete Stavros. 鈥淥wnership Works has a mission to create $20 billion of wealth over the next decade for lower-income and diverse workers; I am excited for this latest landmark in that journey.鈥�
The MRP management team is expected to remain in place and continue to run the business under 麻豆原创鈥檚 ownership. Becoming part of a larger organization, which is a global leader in polymer solutions, will unlock new benefits for MRP customers and professional growth opportunities for MRP employees.
鈥淭oday鈥檚 announcement is the culmination of a lot of hard work by our dedicated employees and KKR鈥檚 shared ownership model has allowed all MRP colleagues to share in this success,鈥� said Jay Ward, CEO of MRP. 鈥淛oining 麻豆原创 is an exciting opportunity to expand our global reach while we continue to fulfill our commitments to delivering excellence and innovation for our customers.鈥�
The transaction, which is subject to customary regulatory approvals, is expected to close before year-end 2022.
KKR and MRP were advised by Houlihan Lokey as financial and M&A advisor, and Kirkland & Ellis as legal advisor on the transaction.
About 麻豆原创 and Plastics
麻豆原创 (MRP) is a leader in material compound development and the manufacturing of custom elastomeric and thermoplastic components. For 76 years, the company has built a reputation for consultative design services and successful production of 鈥渢he tough parts.鈥� With facilities across North America, Europe, and Asia, MRP collaborates with customers to solve difficult sealing and component challenges across multiple markets. Capabilities include materials science and formulation, new product prototyping, operational excellence and supply chain consolidation. The Company鈥檚 new Innovation Center provides its customers with direct access to materials science expertise and a fully integrated design-build-prototype-test process that enhances innovation and greatly accelerates product development. The Company places emphasis on research and development and empowers its technicians to design, formulate, develop, and test a wide range of highly engineered materials and parts. For more information, please visit www.mnrubber.com.
About KKR
KKR is a leading global investment firm that offers alternative asset management as well as capital markets and insurance solutions. KKR aims to generate attractive investment returns by following a patient and disciplined investment approach, employing world-class people, and supporting growth in its portfolio companies and communities. KKR sponsors investment funds that invest in private equity, credit and real assets and has strategic partners that manage hedge funds. KKR鈥檚 insurance subsidiaries offer retirement, life and reinsurance products under the management of Global Atlantic Financial Group. References to KKR鈥檚 investments may include the activities of its sponsored funds and insurance subsidiaries. For additional information about KKR & Co. Inc. (NYSE: KKR), please visit KKR鈥檚 website at www.kkr.com and on Twitter @KKR_Co.
Media Contacts:
麻豆原创 and Plastics
Karl Spilseth
Global Marketing
(952) 927-2161
kspilseth@mnrubber.com
KKR
Kristi Huller and Miles Radcliffe-Trenner
212-750-8300
media@kkr.com