Denver, US; 10 August 2022
Partners Group to expand the shareholder base of USIC, the leading North American provider of utility location services; Kohlberg & Company to acquire a 50% stake
- Partners Group will retain a 50% co-lead interest in USIC
- Together, Partners Group and Kohlberg will implement new value creation initiatives
- The transaction values USIC at an enterprise value of USD 4.1 billion
Partners Group, a leading global private markets firm, is, on behalf of its clients, expanding the shareholder base of United States Infrastructure Corporation (“USIC” or “the Company”), the leading North American provider of utility location services. Kohlberg & Company (“Kohlberg”) is acquiring a 50% stake in USIC and Partners Group will retain a 50% co-lead interest. Kohlberg was joined in this investment by a group of new partners that includes funds managed by Neuberger Berman. The transaction values USIC at an enterprise value of USD 4.1 billion.
Founded in 2008 and headquartered in Indianapolis, USIC is a leading provider of outsourced “utility locate” services, which involve locating, identifying, and marking sub-surface utility infrastructure such as pipes, cables, and fiber. These services are provided on behalf of public utilities that are required by law to ensure underground infrastructure is marked correctly before ground is broken on any new project. USIC currently serves over 1,300 customers in the US and Canada across six utility markets: cable, telecom, electric, gas, water, and sewer. It has a workforce of 9,000 technicians that perform 80 million locates each year. The demand for USIC’s services is set to rise due to higher excavation activity following President Biden’s Infrastructure Bill, new 5G densification initiatives, increased awareness of the importance of conducting locates, and a shift to outsourcing on the part of utilities.
Since acquiring USIC in 2017, Partners Group has installed an entrepreneurial Board that has helped transform the Company and drive strong organic growth, with EBITDA increasing 77% in the last five years. Key value creation initiatives have included investing in technician training, launching new tools to improve productivity and operational performance, and capturing pricing adjustments and improved contract terms. Partners Group also introduced a program to improve USIC’s approach to health & safety, which has led to technician motor vehicle accidents falling by a third and field injuries and lost-time incident rates halving. Partners Group and Kohlberg will implement new value creation initiatives to further build on these foundations, including investing in sales and digital capabilities.
Mike Ryan, Chief Executive Officer, USIC, comments: “Underlying excavation demand has remained stable for decades, driven by routine infrastructure maintenance as well as commercial and residential construction, and we are now looking ahead to a new period of market growth. USIC’s national scale, fast response times, and reputation for quality positions us well to capitalize on this growth. Partners Group has been instrumental in transforming USIC’s services and we are delighted to continue working with the firm, whilst welcoming Kohlberg on board.”
Joel Schwartz, Partner, Co-Head Private Equity Services, Partners Group, says: “USIC has a strong, resilient business model that is underpinned by consistent demand from a blue-chip customer base and long-term contracted cashflows. Our thematic research shows the locating services market is experiencing growth tailwinds and we have conviction in USIC’s future prospects, as demonstrated by our ongoing commitment to the business. Given the success of our previous value creation initiatives, we also have a deep understanding of what levers can be pulled to further transform USIC.”
Benjamin Mao, Partner, Head of Infrastructure Services, Kohlberg & Company, says: “We are honored to have the opportunity to work alongside Partners Group to support Mike and the USIC management team in its exciting next chapter of growth. USIC is uniquely positioned as a leading provider of mission-critical safety services to utilities and telecommunications customers, who are undergoing periods of significant growth and transformation driven by grid modernization, continued technological innovation, and further accelerated by infrastructure stimulus.”
Partners Group was advised by Harris Williams and Ropes & Gray LLP. Kohlberg was advised by Goldman Sachs, Houlihan Lokey, and Paul, Weiss, Rifkind, Wharton & Garrison LLP.
About Partners Group
Partners Group is a leading global private markets firm. Since 1996, the firm has invested USD 185 billion in private equity, private real estate, private debt, and private infrastructure on behalf of its clients globally. Partners Group seeks to generate strong returns through capitalizing on thematic growth trends and transforming attractive businesses and assets into market leaders. The firm is a committed, responsible investor and aims to create sustainable returns with lasting, positive impact for all its stakeholders. With USD 131 billion in assets under management as of 30 June 2022, Partners Group provides an innovative range of bespoke client solutions to institutional investors, sovereign wealth funds, family offices and private individuals globally. The firm employs more than 1,600 diverse professionals across 20 offices worldwide and has regional headquarters in Baar-Zug, Switzerland; Denver, USA; and Singapore. It has been listed on the SIX Swiss Exchange since 2006 (symbol: PGHN). For more information, please visit www.partnersgroup.com or follow us on LinkedIn or Twitter.
About Kohlberg & Company
Kohlberg is a leading private equity firm based in Mount Kisco, New York. Since its inception in 1987, the company has organized nine private equity funds, through which it has raised $12 billion of committed equity capital. Over its 35-year history, Kohlberg has completed 91 platform investments and nearly 250 add-on acquisitions, with an aggregate transaction value of approximately $40 billion. For more information, please visit www.kohlberg.com.