KPS Capital Partners

KPS Capital Partners is a leading global private equity firm specializing in control investments in manufacturing and industrial companies across a diverse range of sectors. Founded in 1991, the firm is renowned for its deep operational approach to transforming underperforming or distressed businesses, often in partnership with organized labor. With offices in New York City and affiliates in Frankfurt and Shanghai, KPS manages over $21 billion in assets and has a long track record of creating substantial value through complex corporate carve-outs, turnarounds, and strategic repositioning.

History

KPS Capital Partners was established in 1991 by Michael Psaros, Eugene Keilin, and David Shapiro, veterans of the investment banking and leveraged finance sectors. The firm's name derives from the initials of its founding partners. Its early strategy focused on opportunistic investments in the industrial and manufacturing landscape of North America and Western Europe, often targeting companies undergoing financial distress or complex ownership transitions. A landmark early transaction was the 1994 acquisition of American Standard's bath and kitchen business, which was later successfully taken public on the New York Stock Exchange. Over subsequent decades, the firm raised a series of progressively larger funds, expanding its geographic reach and operational capabilities, with its fifth fund closing at $3.5 billion in 2013. In 2021, KPS achieved a significant milestone by closing its flagship KPS Special Situations Fund V at over $8.0 billion, underscoring its position as a dominant player in the sector.

Investment strategy

The firm employs a highly specialized, operationally intensive investment strategy centered on acquiring controlling stakes in manufacturing and industrial businesses that are fundamentally sound but require significant change. This typically involves corporate divestitures, family-owned company successions, or financially distressed situations requiring recapitalization. KPS partners closely with company management and, notably, with trade unions such as the United Steelworkers and the International Association of Machinists and Aerospace Workers to implement transformative operational improvements. These include restructuring underperforming divisions, investing in capital expenditure for modernization, consolidating industries, and driving global expansion. The firm's deep in-house operating team, comprised of former CEOs and COOs from major industrial corporations, works on-site to execute these value-creation plans, aiming to build stronger, more competitive enterprises over a five-to-seven-year holding period.

Notable transactions

KPS has executed numerous high-profile and complex transactions across its history. A major deal was the 2006 acquisition of the global Honeywell Friction Materials business, which was renamed Federal-Mogul Motorparts after a subsequent merger. In 2012, the firm orchestrated the purchase of the Water and Process Technologies division from ITT Corporation, forming a new platform called Evoqua Water Technologies which was later taken public and eventually acquired by Xylem Inc.. Another significant transaction was the 2015 acquisition of the Global Home and Hardware division of Newell Brands, creating Spectrum Brands Holdings. More recently, in 2021, KPS completed the carve-out and acquisition of ITT Inc.'s Connect and Control Technologies business, establishing it as an independent company named Kendrion.

Portfolio companies

The firm's portfolio has included a wide array of industrial manufacturers. Current and past investments span sectors such as aerospace, automotive, building products, capital equipment, and consumer products. Notable past and present portfolio companies include Howmet Aerospace (formerly part of Arconic), a leading producer of engineered components for the aerospace industry; Chassix, a global aluminum casting and machining supplier; and Crenlo, a manufacturer of operator cabs for agricultural equipment and construction machinery. Other significant platforms have included Atkore International, a provider of electrical raceway solutions, and Worthington Industries, a diversified metal processing company.

Leadership and team

The firm is led by its co-founder and Managing Partner, Michael Psaros, who is widely recognized as a key architect of its strategy and culture. The senior leadership team includes other founding partners and a group of seasoned investment professionals with backgrounds in private equity, investment banking at firms like Goldman Sachs and Morgan Stanley, and management consulting. A defining feature is its dedicated Operations Group, staffed by senior executives with extensive line management experience at major corporations like General Electric, Danaher Corporation, and Parker Hannifin. This team works integrally with the investment professionals and portfolio company management to implement operational turnarounds and strategic initiatives, a structure that has been central to the firm's consistent performance across multiple economic cycles.