Dealmaking
Engineer Kleinfelder Set For Private Equity Purchase
Engineer-construction manager The Kleinfelder Group Inc., San Diego, is set to be acquired by Wind Point Partners, a middle market-focused private equity firm based in Chicago.
Terms were not disclosed for the deal, that was announced Nov. 21 and is set to close on Nov. 30 pending a shareholder vote.
Sources say the price for Wind Point's majority ownership is between $200 million and $300 million.
Kleinfelder did not disclose the size of the Wind Point share, nor the remaining stake owned by employees and other shareholders.
Kleinfelder CEO George J. Pierson says he will remain in the role, which he has held since 2016. The firm management team and structure will be unchanged, he adds.
Pierson joined Kleinfelder from a former role as CEO of transportation design giant Parsons Brinckerhoff, which was sold in 2014 by its previous owner UK-based contractor Balfour Beatty to Montreal-based engineer WSP Global for about $1.4 billion.
According to Pierson, the Wind Point deal "will help remove the final obstacle of an unsustainable capital structure" related to reliance on weaker employee share purchases, and will boost Kleinfelder long-term growth potential and access to steady funding.
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The firm has about 1,800 employees in 60 offices, including Canada and Australia.
Kleinfelder ranks at No. 60 on ENR's list of The Top 500 Design Firms, reporting $267.3 million in 2017 revenue—about $22 million in non-US work—with about 30% in environmental infrastructure and management services, and 21% each in industrial and transportation sectors.
The firm had reported revenue of about $318 million in 2015.
Pierson noted positive growth trends in Kleinfelder's core transportation and environmental sector and said the firm posted a profit last year. He did not disclose the figure but one source noted it at about 8%.
In the Kleinfelder announcement, Nathan Brown, a Wind Point managing director, said the PE firm will collaborate "to take the [engineer] to the next level.”
Sources say that is likely to include new acquisitions.
Wind Point also has owned transportation contractor RailWorks Corp., New York City, since 2007. It ranks at No. 124 on ENR's Top 400 Contractors List with about $682 million in 2017 revenue reported.
According to Pierson, most of the potential acquirers were PE firms, funds or other financial entities, although some industry "strategics" were included, but prospect identities were not disclosed.
Wind Point Partners says it has about $2 billion in assets under management. On its website, the firm says it has acquired more than 100 "platform companies and 250 add-on acquisitions," since its 1984 launch.
