BlackRock, GIC, and Lexington Back Kohlberg Longer-Term PE Vehicle
Posted on 07/20/2021
Kohlberg & Company, LLC closed a US$ 1.1 billion Continuation Vehicle transaction co-led by affiliates of BlackRock, GIC Private Limited, and Lexington Partners. The Continuation Vehicle encompasses the remaining assets of Kohlberg Investors VII, a 2012 vintage fund with US$ 1.6 billion in capital commitments, and is the first continuation vehicle to be established by Kohlberg. The Continuation Vehicle will support the growth of four platform investments, while simultaneously providing Fund VII Limited Partners a liquidity opportunity to solidify their returns.
As part of the transaction, affiliates of BlackRock, GIC, and Lexington Partners have agreed to contribute their pro-rata share of additional capital to support and enhance the value creation initiatives of the remaining assets. Additionally, Kohlberg offered existing Fund VII Limited Partners the opportunity to exercise a full liquidity option, a status-quo rollover option or an option to re-invest to participate in the new capital commitments of the Continuation Vehicle.
Konnin Tam, Managing Director and Co-Head of Secondaries and Liquidity Solutions (SLS) in the Private Equity Partners business of BlackRock Alternative Investors, said in a press release: “We continue to see secondary capital being well-positioned to provide flexible liquidity solutions and resilient investment outcomes for LPs and GPs alike. We’ve focused extensively on developing unique partnerships and investment opportunities in this market and are pleased to be partnering with Kohlberg on this next endeavor.”
Mr. Choo Yong Cheen, Chief Investment Officer of Private Equity at GIC, said in a press release: “GIC is pleased to work with our partners at Kohlberg, BlackRock, and Lexington to provide a fair and transparent option to existing Fund VII Limited Partners. As a long-term investor, we believe in building solutions that allow leading private equity managers to create lasting value in their companies. We look forward to supporting Kohlberg in maximizing the value of this portfolio of businesses.”
Advisors
Lazard served as exclusive financial advisor to Kohlberg and Ropes & Gray LLP served as Kohlberg’s legal counsel. Akin Gump Strauss Hauer & Feld LLP served as legal counsel for BlackRock, Proskauer Rose LLP served as legal counsel for GIC and Kirkland & Ellis LLP acted as legal counsel for Lexington Partners.
Some of Kohlberg Investors VII fund’s investments are:
1. (June 27, 2013) Risk Strategies Company (RSC), a national insurance & benefits brokerage and risk management firm headquartered in Boston. RSC management and employees have also retained significant ownership.
2. (November 4, 2014) PPC Industries, Inc. PPC is a leading designer and manufacturer of medical device, food and industrial packaging products that are customized, highly technical formulations designed to meet strict performance requirements and tolerances. PPC supplies an extensive portfolio of tubing, films and bags to the medical device market as well as specialty food and industrial films/bags, auto-insertion bags and protective systems bags. PPC manufactures its products through a network of seven best-in-class facilities in North America, Central America, Europe and Asia.
