ImpactAlpha, August 3 — KKR implemented its employee-ownership program for 1,450 employees when it acquired materials science company Minnesota Rubber & Plastics in 2018.
The private equity giant has sold the company to Trelleborg Group, a Swedish engineering firm, for around $950 million. The sale means non-management employees who joined the company around the time of KKR’s investment will receive on average cash payouts equivalent to a year’s salary; the payout to the most senior employees will equal two years’ salary.
KKR says that under its ownership, wages increased over 6% yearly and employee turnover declined by roughly 30%. As part of the deal, MRP employees will receive prepaid personal finance coaching and tax preparation services from Goldman Sachs, RSM Global and Deloitte.
Inclusive economy
Pete Stavros, who has championed KKR’s employee-ownership strategy, said the MRP deal “shows the power of building an ownership culture, something we believe many more companies can replicate, and the potential of the shared ownership movement.”
KKR has awarded billions of total equity value to more than 45,000 at more than two dozen companies. The firm has implemented ownership programs at 30 portfolio companies.
Worker ownership
KKR made positive headlines in May when it shared with employees some of the proceeds of its exit from C.H.I Overhead Doors. C.H.I. workers received an average $175,000, a life-altering sum for many, but puny compared to the large sums KKR execs pull in yearly, The Democracy Collaborative’s Marjorie Kelly and Karen Kahn argued in a guest post (see “How private equity firms can fulfill the promise of employee ownership”).
Earlier this year, KKR joined TPG, Apollo and dozens of other private equity investors in Ownership Works in pledging to give equity shares to employees at some portfolio firms. Their goal: to create $20 billion in wealth for low- and moderate-income workers over the next decade.
