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Kinderhook Industries announces USD460m recapitalisation of Kinderhook Capital Fund III

Kinderhook Industries (Kinderhook), a private equity firm specialising in middle-market control investments in the healthcare services, environmental/business services and automotive/light manufacturing sectors, has successfully completed a recapitalisation of Kinderhook Capital Fund III, a $300 million committed capital, 2009 vintage fund. AlpInvest Partners and affiliated investors (AlpInvest), a leading player in the private equity secondary market, led the transaction and is now the largest investor in the Fund.

All limited partners of the Fund were provided the option of retaining their position in the Fund or receiving full or partial liquidity. The aggregate value of the portfolio was approximately USD360 million, with remaining limited partners and AlpInvest committing an additional USD100 million of capital to grow the portfolio. Earlier in 2020, AlpInvest had committed USD65 million of preferred equity to facilitate follow-on investments in Fund III.

Thomas Tuttle, Managing Director at Kinderhook, says: “We are thrilled to have found the perfect partner in AlpInvest, who worked with us to support our portfolio despite all of the COVID-related volatility in the markets. This transaction provides our remaining portfolio companies, and their management teams, with additional committed capital to execute organic growth strategies and to pursue strategic acquisitions. This transaction also provides a great outcome for the limited partners of our Fund, who are receiving a premium value that is meaningfully above the assets’ original cost basis and exceeds the 31 March, 2020 portfolio company net asset value.”

Michael Hacker, Managing Director at AlpInvest, says: “Kinderhook has a proven track record of success over nearly two decades and we are excited to partner with the team as they focus on maximising the long-term value of the Fund III portfolio companies. We are particularly pleased that this transaction will benefit all parties involved, with Kinderhook’s original limited partners receiving a premium return, while also recapitalising the Fund to fully support the continued growth strategies of the portfolio.”

Evercore served as financial advisor and Kirkland & Ellis LLP served as legal counsel to Kinderhook. Ropes & Gray LLP served as legal counsel to AlpInvest.

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