CHI's Dave Bangert (left), with Pete Stavros and a chicken
CHI's Dave Bangert (left), with KKR's Pete Stavros and a chicken

KKR has unveiled a $3 billion exit – which returned 10x its initial equity investment – with a significant employee ownership angle.

The firm is selling CHI Overhead Doors, a manufacturer of garage doors, to steel company Nucor after around seven years of ownership. When the deal completes, employees in the business will benefit from an average payout of $175,000.

Pete Stavros (pictured above, right), co-head of Americas private equity at the firm, told New Private Markets that revealing details of the deal to employees in person was “one of the most joyful things I have been involved in in my life”.

When KKR acquired the business in 2015, all 800 employees were made owners of it. “This was a free, incremental benefit for anyone earning less than $100,000 and was not in exchange for benefits, wages or wage increases,” said KKR in a statement about the sale.

The equity grant was part of wider employee engagement programme, which saw employees direct a budget of circa $1 million per year to improve the work environment among other initiatives.

On completion of the deal, employees will also have access to a year’s pre-paid financial planning and tax advice from Goldman Sachs Ayco Personal Financial Management and Ernst & Young. While financial education has been part of the ongoing programme, this is the first time that employees have benefited from a “consolidated big push” at the moment of a payout. “That’s a game changer,” said Stavros.

Stavros was gifted a chicken (above) by CHI’s employees as a thank you. This was the second “thank you” chicken, the first having been given to Stavros at the original equity grant back in 2015.

Peck-uity interest: KKR’s Stavros accepts a gift of a chicken in 2015

“We can’t thank our strategic partners at KKR enough for believing in us at CHI, providing a life-changing experience for us all and driving a movement not only across the industry, but across the industry,” said CHI CEO Dave Bangert.

Stavros’ team at KKR has been at the forefront of a movement to include portfolio company employees in the equity upside of private equity buyouts. In April this year, the firm became a founding partner of Ownership Works, a non-profit with a mission to support public and private companies transitioning to shared ownership models.

“CHI is a powerful testament that creating a culture of ownership works,” said Stavros. “We have seen first-hand the impact that the ownership mindset can have on individual owners and the business. When you invest in employees, positive results will follow.”