KKR to Acquire Flow Control Group from Bertram Capital

Rhea-AI Summary

KKR has announced an agreement to acquire Flow Control Group, a prominent distributor specializing in flow control and industrial automation products, from Bertram Capital. Based in Charlotte, NC, Flow Control Group serves over 10,000 customers and 2,000 suppliers across North America. KKR anticipates enhancing Flow Control's market reach and operational capabilities while focusing on employee engagement and ownership models. This acquisition, part of KKR's Americas XII Fund, underscores their commitment to growing companies in the industrial sector.

Positive

• Acquisition of Flow Control Group enhances KKR's portfolio in the industrial sector.
• Flow Control Group boasts a strong customer base of over 10,000 and supplier network of 2,000.
• Strategic focus on employee engagement and ownership expected to drive operational performance.

Negative

• None.

KKR, a leading global investment firm, today announced it has entered into an agreement to acquire Flow Control Group, a leading distributor of mission-critical flow control and industrial automation products, from Bertram Capital.

Headquartered in Charlotte, North Carolina, Flow Control Group serves as a trusted, value-added distributor and advisor to more than 10,000 customers and 2,000 suppliers in North America for technical flow control and industrial automation products and related services. Customers rely on Flow Control Group for their engineering expertise, technical support, and service capabilities for high value products including air equipment, pumps, valves, process control, and industrial automation, amongst other product categories.

“Flow Control Group stands out for their proven ability to be a strategic partner and consultative, technical resource for customers’ critical flow control and industrial automation product needs,” said Josh Weisenbeck, KKR Partner who leads KKR’s Industrials investment team. “We are excited to work together with David Patterson and the entire team at Flow Control Group to further expand the company’s reach, while remaining an excellent partner to their OEM suppliers and continuing to be a value-added team member for their customers.”

Since 2011, KKR’s Industrials team has focused on employee engagement as a key driver in building stronger businesses. The strategy’s cornerstone has been to allow all employees to take part in the benefits of ownership by granting them the opportunity to participate in the equity return alongside KKR. Beyond sharing ownership, KKR also supports employee engagement by investing in training across multiple functional areas and by partnering with the workforce to give back to the community.

Pete Stavros, KKR Partner and Co-Head of Americas Private Equity at KKR, said, “For over a decade, we have been developing a new model of employee engagement centered around an all employee ownership strategy, and we look forward to implementing this model at Flow Control Group alongside David Patterson and his team.”

“We are thrilled to have the support of KKR as we continue to grow our reach across the flow control and industrial automation sectors while investing to better serve our customers and supplier partners,” said David Patterson, CEO of Flow Control Group.

“We are fortunate to have had the opportunity to partner with Flow Control Group, under the exceptional leadership of CEO David Patterson, to achieve our shared vision of creating a leading independent player in the industry,” said Kevin Yamashita, Partner at Bertram Capital. “Working closely with the Flow Control Group team, we exceeded our growth plan through strategic add-on acquisitions, organic growth initiatives, the addition of key executive talent, and operational improvement.”

Bertram’s value creation strategy, the Bertram High 5^sm, coupled with the firm’s in-house IT team, Bertram Labs, were critical drivers to the rapid growth and platform expansion realized by Flow Control Group during Bertram’s ownership.

R.W. Baird and Hirschler served as advisors to Bertram Capital on the transaction, while Kirkland & Ellis and Deloitte served as advisors to KKR.

KKR is making the investment through its Americas XII Fund. Further terms were not disclosed.

About Flow Control Group

Flow Control Group is a leading solutions provider focused on technically oriented products and services for the flow control, fluid handling and process & industrial automation sectors with locations throughout the U.S. and Canada. As a critical intermediary between over 2,000 suppliers and 10,000 customers, Flow Control Group’s distribution and technical services serve an essential function in the movement of mission critical components to a diverse array of end markets and applications.

About KKR

KKR is a leading global investment firm that offers alternative asset management and 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’s insurance subsidiaries offer retirement, life and reinsurance products under the management of The Global Atlantic Financial Group. References to KKR’s investments may include the activities of its sponsored funds and insurance subsidiaries. For additional information about KKR & Co. Inc. (NYSE: KKR), please visit KKR’s website at www.kkr.com and on Twitter @KKR_Co.

About Bertram Capital

Bertram Capital is a private equity firm targeting investments in lower middle market companies. Since its inception in 2006, the firm has raised over $1.9B of capital commitments. In addition to supplying strategic growth capital, Bertram Capital leverages proprietary processes and services, Bertram High-5^sm and Bertram Labs, to empower its portfolio companies to unlock their full business potential. The Bertram High-5^sm is an operationally-focused value creation strategy, which includes management augmentation, operational initiative implementation, complementary business acquisition, sales and marketing improvements, and leveraging technology and IP. The cornerstone of this strategy is Bertram Labs, its in-house technology team, which drives growth and value through digital marketing, e-commerce, big data and analytics, application development, and internal and external platform optimization. Visit www.bcap.com for more information.

View source version on businesswire.com: https://www.businesswire.com/news/home/20210217005319/en/

FAQ

What is KKR's recent acquisition about?

KKR has agreed to acquire Flow Control Group, a distributor of flow control and industrial automation products, from Bertram Capital.

When was the acquisition of Flow Control Group announced?

The acquisition was announced on February 17, 2021.

How will the acquisition impact Flow Control Group's operations?

KKR aims to enhance Flow Control Group's operational capabilities and expand its market reach.

What is the size of Flow Control Group's customer and supplier base?

Flow Control Group serves over 10,000 customers and works with 2,000 suppliers in North America.

Which fund is KKR using for this acquisition?

KKR is making the investment through its Americas XII Fund.