Kinderhook Industries, a private equity firm concentrating on middle-market investments, is in the final stages of structuring a single-asset continuation vehicle focused on Ecowaste Solutions, its newly established waste-management platform. This strategic transaction provides an optional liquidity event for Kinderhook's limited partners while injecting $400 million of new equity capital to fuel the platform's ongoing growth initiatives and targeted acquisition strategy, according to a statement from the firm issued on Friday.
Dustin Reynolds, Ecowaste Solutions' Chief Executive Officer, commented on the development, stating, "With Kinderhook's continued support and the introduction of new growth capital, we are well-positioned to broaden our operational reach, invest further in our workforce and infrastructure, and uphold our commitment to delivering high-quality service to our customers."
This continuation vehicle is led by Kinderhook Fund 8 and is supported by investment funds managed by Goldman Sachs Alternatives and Apollo S3, two prominent players in the financial sector. Rob Michalik, Managing Director at Kinderhook, expressed enthusiasm about the partnership, indicating, "We are proud to collaborate with Goldman Sachs Alternatives and Apollo S3. This transaction marks a significant milestone for Kinderhook and our investors, representing the largest environmental services investment in the firm's history."
Ecowaste Solutions' operational model centers on a portfolio of differentiated assets and is expected to execute a robust value-creation strategy based on organic growth, enhanced operational efficiency, and strategic acquisitions. The waste-management platform was formed through the integration of Live Oak Environmental and CARDS Recycling, combining collection and post-collection services across the Mid-South. This region is noted for its growing population and increasing commercial and industrial activities, positioning Ecowaste to capitalize on expanding demand.
This initiative marks Kinderhook's ninth investment within the solid waste management vertical, reinforcing its commitment to the environmental services sector. Ecowaste Solutions, headquartered in Dallas, offers solid waste collection and disposal services to over 400,000 customers across the Mid-South.
From a financial advisory perspective, Jefferies played a key role in advising on the continuation vehicle transaction, while Stifel provided dual advisory services and acted as sole placement agent for the associated debt financing. The debt component was arranged through a consortium led by Ares Capital, with participation from MidCap Financial, Willow Tree Capital, and the Stifel Lending Program. Legal counsel for the transaction was provided by Kirkland & Ellis LLP.
Kinderhook Industries, established in 2003, has amassed more than $10 billion in committed capital to date. The firm primarily focuses on middle-market companies with unique market positions across several sectors including healthcare services, environmental and industrial services, light manufacturing, and automotive industries.