Platinum Equity navigated a challenging year for private equity by sticking to its core investment strategies.
Platinum Equity completed 51 buy and sell-side transactions in 2023, including 10 new platform investments and 28 add-on acquisitions across a variety of sectors, such as consumer, manufacturing, agribusiness and more. Deal sizes varied from the large end of the spectrum to those in the lower end of the middle market. Platinum Equity’s burgeoning credit strategy completed deals in North America that supported companies in the railway space and in the HVAC sector.
Tom Gores’ and Platinum Equity’s efforts to make an impact were evident in 2023. Gores’ plans include redeveloping core Detroit infrastructure and more. Portfolio companies continued investing in communities both in the U.S. and abroad. Employees from both Platinum Equity and portfolio companies participated in meaningful charitable activities.
Fundamentally, we won't change. Economically, the future could see challenging times, but we believe we're set up to survive and thrive in any market. The one thing to take away in these situations is that whatever challenges come in the market, whatever comes our way, we are confident our team at Platinum Equity is ready to handle it.
Although the economic forecast for 2024 includes a potential soft landing, the prospect of turbulence is possible, according to The Conference Board. The agency predicts two quarters of negative growth, which will eventually be classified as a recession, to be followed by normalization.
No matter the outcome, Platinum Equity believes it is prepared.
“Fundamentally, we won’t change,” Gores said. “Economically, the future could see challenging times, but we believe we’re set up to survive and thrive in any market. The one thing to take away in these situations is that whatever challenges come in the market, whatever comes our way, we are confident our team at Platinum Equity is ready to handle it.”
Here is a look back select events from 2023:
Platinum Equity completes $4.6 billion take private of Diversey, combination with Solenis
Platinum Equity portfolio company Solenis acquired Diversey Holdings for $4.6 billion. Headquartered in Wilmington, Del., Solenis is a leading manufacturer of specialty chemicals used in water-intensive industries. Diversey is a provider of hygiene, infection prevention and cleaning solutions based in South Carolina. With the acquisition, Solenis has grown to an enterprise operating in more than 130 countries with 71 manufacturing facilities and more than 15,000 employees. “This is a transformational opportunity to bring together two innovative companies that have each been developing solutions for many of the world’s most pressing challenges for more than 100 years,” Platinum Equity Co-President Jacob Kotzubei said. “By joining forces, they’re better positioned to accelerate the pace of progress across a wider range of high-growth end markets.”
Platinum Equity closes 2 deals in 20 days, creates $1.2 billion global refractories business
Despite the challenging M&A and financing markets, Platinum Equity executed a complex €930 million carve-out deal in January to acquire the Paris-based refractories business of Imerys. Just 20 days later Platinum Equity acquired HarbisonWalker International, a U.S.-based refractory business, merging the two businesses under the Calderys umbrella. “We are continuing to find attractive opportunities to put capital to work and provide divestiture solutions that deliver speed and certainty,” Platinum Equity Co-President Louis Samson said. “With HWI and Calderys, we negotiated two complex transactions in parallel with sellers in the US and Europe while formulating a plan to bring those businesses together. It was an extraordinary effort with a lot of moving parts. I’m proud of the way our teams executed.”
Platinum Equity executes carveout transaction with Kohler
In late 2023, Platinum Equity and Kohler Co. announced an agreement to create a standalone company from Kohler Energy, with Platinum as the majority investment partner. Kohler will continue to stay invested in the business, which has grown during the last century to become a leader in mission-critical backup and prime power equipment, traditional and electrified powertrain technologies, and home energy solutions. Kohler said making it a separate and independent company under the guidance of Platinum Equity will position the business to take the next step in its growth. Kotzubei noted: “We appreciate Kohler’s confidence in our ability to build on its legacy and support the energy business’s continued growth and expansion as a standalone company.” Completing complex carveouts from global corporate companies is an area in which Platinum Equity has experience, having done so with Ball Corp., Caterpillar, Emerson Electric, as well as with Ingersoll Rand, Johnson & Johnson, and more. Closing is expected in the first half of 2024.
Platinum Equity sells Valpak
Known throughout the United States for its blue envelopes filled with coupons for consumers, Valpak, a Platinum portfolio company, was sold to AmatoMartin, a privately held investment holding company, in December. Platinum Equity acquired the company in 2017, converting the business into an omnichannel model that delivered new products and technologies from a primarily franchise-owned organization. Today, Valpak is a trusted marketing and advertising solutions provider to 34,000 businesses around the country.
Partial divestitures, share sales, driving monetization
Platinum Equity continued monetizing value throughout its portfolio in multiple ways throughout the year. Awaze, Europe’s leading managed vacation rentals group, closed the sale of its Landal GreenParks unit to Roompot in April. In August, Urbaser signed an agreement to sell its Nordic business as part of a continued refinement of the Madrid-based company’s portfolio. Platinum Equity also continued monetizing public shares held in former portfolio companies Vertiv, Verra Mobility and Ryerson.
Gores partners on $3 billion development in Detroit
Gores announced plans in February to partner with Henry Ford Health and Michigan State University on a mixed-used development in Detroit’s New Center neighborhood. The sweeping project will invest $3 billion over the next decade to build residential, affordable housing, commercial and retail components anchored by a new hospital and medical research facility. Ground is expected to be broken later this year.
Small Cap portfolio continues to expand
In April, the Small Cap team completed the acquisition of a majority stake in Tarter Farm and Ranch Equipment, which manufactures animal gates and fencing solutions, tractor implements, planters and fire rings, and animal feeding and handling equipment for ranchers, large institutional farms and smaller farming enthusiasts. That deal was followed by the August purchase of The HC Companies, a leading North American manufacturer of horticultural containers. The company produces a wide range of planters, pots, and accessories for the greenhouse, nursery, and retail markets, including fiber and biobased solutions produced with post-consumer and post-industrial materials to meet increasing consumer demand for sustainable solutions.
Platinum Equity leverages building products experience with three new platforms in the sector
In July, Platinum Equity acquired JELD-WEN’s Australasian windows and doors business. In November the firm acquired a controlling interest in Cook & Boardman, a leading specialty distributor of commercial door and security integration solutions. In December, Platinum Equity acquired a co-controlling stake in US LBM, a leading distributor of specialty building materials in the U.S. Samson said of the JELD-WEN transaction: “We are pleased to have provided a divestiture solution to JELD-WEN as the company continues to streamline and simplify its business. Platinum has decades of experience with corporate carve outs and we expect a seamless transition.” In the Cook & Boardman and US LBM transactions, both counterparties chose to partner with Platinum to accelerate growth while maintaining meaningful stakes in the businesses. Kotzubei noted: “We have a lot of experience partnering with sellers looking for additional operational capabilities to unlock growth while maintaining upside in future value creation.”
Platinum Equity adds sporting equipment company in apparel sector
Platinum Equity acquired Augusta Sportwear Brands in October, adding the sporting equipment and clothing company to firm portfolio companies in the apparel sector. ASB is a supplier of team uniforms, off-field performance wear and fan apparel for youth and recreational sports markets. Platinum Equity later merged the company with Founder Sports Group. Both companies primarily sell to regional and local team dealers and decorators who work directly with youth sports leagues, schools and corporations. Samson noted the dual acquisitions represent the first step in a planned consolidation play in the space. “We saw the potential to combine two established companies very rapidly and orchestrate a transaction that we believe leverages our unique integration and operational capabilities.”
The combined ASB/FSG joins firm portfolio companies Mad Engine (licensed clothing) and Hop Lun (women’s clothing) in the apparel sector.
Platinum Equity Co-President Jacob Kotzubei speaks at prestigious conference
Kotzubei joined a group of well-known investment bankers, institutional investors, politicians and others at the 26th annual Milken Institute Global Conference to discuss the keys to successfully executing transactions in a challenging environment. During the hourlong panel discussion titled Deal or No Deal in Private Equity, Kotzubei emphasized that creativity in dealmaking would win the day during these difficult times. “There is objectively less capital available for the industry,” Kotzubei said. “But there’s always capital available for people who can articulate why their strategy meets the moment.”
Platinum Equity credit strategy delivers lending, financing, credit solutions
In late July, Platinum Equity provided an unsecured term loan to the Tom Barrow Company in connection with Ardian’s recent acquisition of a majority stake in the business. The following month, the firm announced that it provided a second-lien term loan to Railway Equipment Leasing and Maintenance Inc. to refinance existing indebtedness and support future growth of the business. Platinum Equity’s credit strategy targets companies that generally have $15 million to $75 million in EBITDA, are primarily based in North America, and plan to use the capital infusions for a variety of uses, including acquisitions, dividends, growth financings, refinancings and recapitalizations.
Platinum Equity recognizes a decade of supporting JRLA
In August, Platinum Equity celebrated its 10th year as presenting sponsor for the Jalen Rose Leadership Academy’s annual golf fundraiser. The institution is an open enrollment, tuition-free, public charter high school co-founded by former NBA star and Detroit native Jalen Rose. Gores is also a long-time supporter of the school. After opening in September 2011, the school says 97 percent of enrollees have graduated, and 100 percent of graduates have either been accepted into college or other post-secondary options. The golf event has grown to become the school’s No. 1 fundraiser. “The Platinum Equity relationship is one of love,” Rose said. “Tom Gores is like a brother to me, and that relationship has grown over more than 10 years. As I got to know Tom Gores and spend time with him, spend time with his kids, spend time with his family, suddenly, my thoughts, his thoughts, we were aligned. The dreams that we have for young people were aligned, and that made it easy.”
Malibu Triathlon participation continues to raise money for pediatric cancer research
More than 100 Platinum Equity representatives were involved in competing or supporting their colleagues at the 38th Annual Malibu 2XU Triathlon, a two-day event which raised more than $1 million for Children’s Hospital Los Angeles’ pediatric cancer research center. Platinum Equity raised nearly $40,000 for the event, 10th best amongst corporations. The firm’s participation in the triathlon began in 2015. Since then, Platinum Equity’s involvement has continued to grow. “This event brings team members from across the firm and the globe together and provides us the opportunity to get out of our day-to-day environment,” Platinum Equity Human Capital Principal Lindsay Calautti said. “I felt really energized after the day and I think a lot of people felt that way.”
Portfolio companies give back to their communities
In early 2023, Jostens debuted its new Hometown Heroes Badge of Service™ Collection that celebrated the service and sacrifices of first responders with a portion of proceeds being donated to Tunnel to Towers foundation, which provides life-changing services for veterans. The annual Club Car Championship at The Landings Golf & Athletic Club in March raised more than $400,000 in donations for Girls on the Run and other Savannah-based charitable organizations; LRG, a brand division of Mad Engine, launched its first sustainable capsule in April to honor Earth Day 2023. LRG’s Earth Day capsule utilized organic cotton and recycled materials. TruckPro announced a donation of $125,000 to charities that support veterans, children’s cancer research and underserved communities during its annual sales summit in March.