Kohler Co. plans to spin-off its energy business as a separate, independent company with California-based
Platinum Equity as the majority investment partner.
The deal would include Kohler’s power systems, engines, home energy, uninterruptible power, Clarke Energy, Curtis Instruments and Heila Technologies business.
Kohler Co. will remain invested in the new business, which will be called
Kohler Energy.
Brian Melka, group president for energy at Kohler Co., will be CEO of the new company and
David Kohler, chair and CEO of Kohler Co., will be part of the new company’s board.
The potential sale of at least Kohler’s generator business had been rumored. In an Oct. 18 research note, Baird analyst Michael Halloran said the firm had received “a fair number of questions on the rumor that Kohler is selling its generator/industrial business for a supposed price of $3 billion.”
Terms of the deal were not disclosed and the two parties still must clear several milestones and legal requirements.
The deal is expected to close in the first half of 2024.
“The energy resilience business has outstanding leadership, strong technical capabilities and an opportunity to benefit from attractive tailwinds driving a sustained need for reliable power solutions in industrial, commercial, residential and equipment applications,” said
Matthew Louie, managing director of Platinum Equity. “We look forward to working with Brian and the management team to continue investing in the business and maximizing its potential.”
Kohler Energy’s Wisconsin operations include facilities in Kohler, Mosel and Saukville. The Mosel plant
completed a 155,000-square-foot addition in 2022.
“Today we took a bold and strategic move for the future of our company,” David Kohler said in a press release. “Over the last 150 years, Kohler has embraced a relentless pursuit of providing exceptional products, services, and experiences for our customers. This important moment in our journey signifies our commitment to deepening the focus and investment in Kohler’s Kitchen & Bath and Hospitality businesses and continuing to drive growth within our respective industries.”
“The timing is right due to the strength of the Energy business, which is driven by world-class products manufactured and sold by highly skilled associates. I look forward to supporting the Energy business through our continued investment along with my role on the board following the closing,” Kohler added.
The press release said Kohler selected Platinum Equity for the deal because of the firm’s operational expertise and experience with carve-out transactions.
Founded in 1995, Platinum Equity has $47 billion of assets under management and portfolio of around 50 operating companies. Recent carve-out acquisitions include deals with Ball Corp., Caterpillar, Emerson Electric, Ingersoll Rand and Johnson & Johnson.
“Kohler has been an excellent steward of the business for more than 100 years,” Melka said. “We will continue that vision with Platinum Equity, who shares the same values of quality, innovation, and operational excellence and is all-in on our growth journey. We expect to drive significant continued investment that increases value to our customers, team members, and shareholders.”
