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KKR brings employee ownership plan to latest mega buyout

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KKR & Co. is offering an equity-sharing benefit to the 4,000 workers in 33 states at Groundworks LLC as it continues building out a program to provide employees with skin in the game at their portfolio companies.

KKR said this week it was tapping equity from its $19 billion flagship North America XIII Fund to acquire a controlling stake in Groundworks LLC, a Virginia Beach, Va., specialist in foundation and water services, for an undisclosed sum.

Groundworks founder and CEO Matt Malone said the company plans to grow its national presence organically and through acquisitions and that KKR’s employee ownership opportunity was a motivator for the deal.

“The strategic partnership enables Groundworks LLC to further invest in our predominantly blue collar workforce with equity sharing programs that will allow every colleague to participate in the success they help to create,” Malone said in a prepared statement.

KKR is teaming up with Groundworks LLC’s current private equity owner Cortec
Group, which is retaining a minority stake in the company, as the concept of employee ownership draw supported by another firm.

Pete Stavros, co-head of U.S. private equity at KKR, sat down with MarketWatch in June to talk about the non-profit group Ownership Works that he started and its efforts to promote employee ownership plans, as well as how he wins over skeptical workers and the state of the American dream.

Also Read: Can hourly workers profit from a private-equity buyout? This KKR executive says yes.

Stavros also manages KKR’s North America XIII Fund, which has committed to offer ownership stakes to workers in all of its majority-owned portfolio companies.

Stavros continues to be chairman of Ownership Works, while KKR is one of the non-profits many corporate partners.

Last year, 800 workers at KKR-backed garage-door manufacturer C.H.I. earned an average cash payout of $175,000 when the company was sold to Nucor Corp.
in a deal that closed last year.

For its part, Ownership Works aims to help build up at least $20 billion in wealth in 10 years for workers.

Thus far, KKR portfolio companies have awarded billions of dollars of total equity value to more than 50,000 non-management employees at nearly 30 companies, since 2011. 

Also Read: Bridgewater’s Karen Karniol-Tambour promoted to co-CIO, continuing her rise as one of the most powerful women on Wall Street


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