Kohlberg typically makes investments in middle market companies with enterprise values between $100 million and $750 million and seeks to provide equity capital of $50 million to $200 million. The Firm seeks to generate attractive rates of return for its investors by improving the operating performance of its portfolio companies rather than relying on financial engineering. Consequently, the Firm has generally used a lower degree of financial leverage than that employed by many other private equity firms, with a median debt-to-EBITDA ratio of 3x, including a number of transactions with 1-to-1 debt-to-equity ratios.
The Firm devotes careful attention to due diligence, transaction execution, and investment monitoring. Primary responsibility for each potential investment is assigned to a transaction team led by an Investment Partner. This team works closely with management to understand the company’s business and markets. They also perform extensive business, legal and accounting due diligence, culminating with the preparation of a detailed five-year business plan. The management of each portfolio company is responsible for achieving the performance targets set forth in this plan. Although the Firm establishes a close working relationship with each portfolio company, Kohlberg’s professionals are careful to respect the division of responsibilities between investors and operating management. The Firm’s professionals provide ongoing support in the areas of corporate finance, acquisitions and long-term strategic planning.
Kohlberg & Company, L.L.C.
Photography courtesy of C. Bernstein & MGF