KKR has announced an agreement to sell GeoStabilization International (GSI) to Leonard Green & Partners, L.P. (LGP). GSI is a prominent provider of geohazard mitigation solutions and roadway safety services. This sale will yield a fivefold return on KKR’s equity investment, and all GSI employees will benefit from substantial cash payouts related to their ownership stakes in the company.
Brandon Brahm, Partner at KKR and Co-Head of KKR’s Ascendant Strategy, expressed his appreciation for the collaboration with GSI’s management and employees, stating, “It has been an honor to work alongside Dominic, the management team, and GSI’s many talented employees to build on the Company’s strong legacy of serving customers and driving innovation. Through our strategic partnership, we expanded the Company’s reach, added service capabilities, and fulfilled our mission to protect the public from geohazards—all while significantly investing in GSI’s employees and our communities. This is a great outcome for all GSI employee-owners and our limited partners in KKR’s Americas XII Fund and demonstrates our ability to be value-added strategic partners with middle-market-sized businesses.”
Since acquiring GSI in December 2018, KKR’s investments in the business—spanning employee development, business infrastructure, service expansion, and corporate growth—have fueled significant revenue and EBITDA growth, nearly tripling during this ownership period. GSI has expanded its family of brands and services, including a foray into complementary roadway safety services, while enhancing worker safety and customer delivery efficiency.
Dominic Ivankovich, CEO of GSI, highlighted the impact of KKR’s all-employee ownership program, saying, “This transaction reflects the dedication and hard work of the entire GSI team. KKR catalyzed our all-employee ownership program, fostering an ownership culture that has strengthened us. We are proud that all GSI colleagues will share in this fantastic outcome.”
Through GSI’s all-employee ownership initiative, over 900 employees will receive cash payouts upon the transaction’s closing. For those who joined GSI before December 2023, payouts will range from three months to over three years of annual pay, depending on their tenure and job level. Additionally, employees will receive pre-paid personal financial coaching and tax preparation services.
Pete Stavros, Co-Head of Global Private Equity at KKR, remarked, “GSI exemplifies the potential of ownership cultures within the services sector, showcasing the power of an engaged workforce. This tremendous outcome recognizes the work GSI’s employees have done to create value, not just for the company but for themselves. GSI will be in great hands with LGP, a fellow partner in Ownership Works, who shares our commitment to ownership and will continue this effort at GSI following the close of this transaction.”
Since 2011, KKR has rolled out broad-based employee ownership and alignment programs across its portfolio, initially led by KKR’s U.S. Industrials private equity team and more recently expanded throughout all control investments within KKR’s Americas Private Equity franchise. To date, over 50 KKR portfolio companies have distributed billions in total equity value to more than 110,000 non-senior management employees.
KKR and GSI were advised by Harris Williams and UBS as M&A advisors, and Kirkland & Ellis served as legal advisor on the transaction.
