Koch Equity Development (KED) is part of Koch Industries, one of the largest privately held businesses in America, with $125 billion in annual revenue. Koch’s shareholders reinvest 90 percent of the firm’s earnings back into the company and as the acquisition and investment subsidiary of Koch, KED has the primary responsibility of profitably investing the firm’s excess capital. Since 2003, Koch companies have invested nearly $150 billion in growth and improvements. Operating out of offices in Wichita and London, KED operates as a flat, closely-knit organization structured to move with speed and certainty.
How and Where KED Invests
As outlined below, KED focuses its efforts on strategic acquisitions and industry agnostic principal investments for the group’s own portfolio. This permits KED to explore a wide, diverse range of opportunities and investments.
View all of our featured investments.
Tuck-In Acquisitions
- Acquisitions that add scale, product/market extensions to Koch’s existing business platforms
- Opportunities that are complementary to or consistent with existing Koch companies’ point of view and vision
- Typically seek wholly-owned acquisitions, but open to joint ventures and minority ownership
- Company culture and management philosophies are key gating themes
- Recent examples:
New Platform Acquisitions
- Acquisitions that extend the Koch franchise, managed as a standalone entity
- Conservatively capitalized with a long-term-hold strategy
- Apply Koch’s MBM® philosophy to help drive long-term value creation
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Target companies:
- With strong management teams and a strict culture of compliance
- With EBITDA greater than $250 million
- With strong competitive advantage and growth opportunities
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Examples of situations that fit us well include:
- Companies with misaligned incentives that drive poor capital allocation
- Businesses that have strong cash flow but are underappreciated or out of favor in the public markets
- Private companies going through a transition that prefer to be in the hands of a long-term investor
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Recent examples:
- Guardian Industries (2017)
- Molex (2013)
- Georgia-Pacific (2005)
Partnered Acquisitions
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Common equity buyout investments alongside like-minded financial, corporate, family
or management partners
- Up to 50% ownership with joint control
- Active management and operational involvement from the board level
- Will supplement the acquisition by the partnership with structured capital solutions if necessary
- Minimum investment size of $250 million
- Recent examples:
Structured Investments
- Financial investments in minority and structured security positions
- Opportunistic and situationally-driven investments (industry and position within the capital structure agnostic)
- High structuring and duration flexibility
- Streamlined decision-making process
- Minimum investment of $100 million
- Recent examples: