KPS Capital Partners, LP announced today that it has signed a definitive agreement to sell its portfolio company, Howden, to Chart Industries, Inc. (NYSE: GTLS), a Ball Ground, Georgia based manufacturer of highly engineered equipment servicing multiple applications in the clean energy and industrial gas markets, for $4.4 billion.
Howden is a leading global provider of air and gas handling solutions that drive enhanced safety, efficiency and environmental sustainability in mission-critical processes across a broad range of attractive and fast-growing industrial markets. Howden manufactures a complete portfolio of rotating equipment products, including compressors, blowers, fans, rotary heaters and steam turbines. The Company’s products enable its customers’ vital processes, which advance a more sustainable world. Headquartered in Renfrew, Scotland, Howden employs more than 6,500 associates globally in 35 countries, including over 750 engineers.
KPS acquired Howden in 2019 from Colfax Corporation in a highly complex global corporate carve-out transaction. KPS assembled an accomplished management team, led by Chief Executive Officer Ross Shuster, to lead the transformation of Howden into a large scale, leading global air and gas handling platform. In just over three years of ownership, KPS, in partnership with management, successfully transformed Howden into a fully independent, fast-growing company focused on innovation.
KPS and Howden’s management team executed an aggressive growth strategy that repositioned Howden towards sustainability-linked end-markets and applications. Under KPS’ ownership, Howden entered or expanded its presence in end-markets that are critical to the future of the industrial economy, including hydrogen compression, carbon capture, utilization and storage, wastewater treatment and energy recovery. KPS made significant investments in the Howden platform, including completing seven highly-synergistic add-on acquisitions, supporting new product development and technology innovation, investing in manufacturing capacity expansions and executing operational improvements. As a result of these actions, Howden achieved record orders, revenue and profitability under KPS’ ownership.
Raquel Palmer, Co-Managing Partner of KPS, stated, “Howden exemplifies the KPS investment strategy of seeing value where others do not, buying right and making businesses better, across decades, economic and business cycles, geographies and industries.
We are proud of Howden’s extraordinary transformation under our ownership. Howden demonstrates our ability to partner with world-class management teams to build industry-leading manufacturing companies on a global basis. The Company’s success is a direct result of KPS’ commitment to and investment in Howden’s organic and strategic growth initiatives and its people. The Company is well-positioned for continued growth and industry leadership under Chart’s ownership.
We congratulate and thank Ross Shuster, Howden’s Chief Executive Officer, along with the Company’s senior management team, for their strategic vision and brilliant execution, which resulted in the Company’s significant growth and value creation under our ownership. Chart recognized Howden’s remarkable transformation, which was made possible by the hard work and dedication of all of Howden’s employees. We are excited for the future of the combined Chart and Howden business. We believe there is tremendous industrial logic in combining the two businesses and that the combination will deliver significant value for all stakeholders.”
Ross Shuster, Chief Executive Officer of Howden, added, “Our partnership with KPS has been extraordinary. KPS recognized the underlying potential of the Howden business and actively supported the Howden team through a significant business transformation over the past three years. Today, Howden has a stronger team, highly robust processes and a superior financial profile. In addition, Howden’s business and growth strategies are aligned with a number of global macro-trends including the energy transition, decarbonization of industry, and electrification. The strength of the Company has been recognized by Chart Industries, and Howden will continue on its positive trajectory as an integral part of Chart.
Howden and Chart have worked together in the recent past, including on a handful of key projects for joint customers. In 2021, Howden signed a Memorandum of Understanding that resulted in cooperating on a number of ground-breaking projects, including the construction of a new hydrogen liquefaction plant in Canada. The success of our relationship gives me great confidence that Chart’s acquisition of Howden will enable the combined company to offer customers a broader set of innovations, solutions and services.”
Morgan Stanley & Co. LLC, J.P. Morgan Securities LLC, Barclays and Evercore served as financial advisors and Paul Weiss, Rifkind, Wharton & Garrison LLP served as legal counsel to KPS and Howden. Completion of the transaction is subject to customary closing conditions and approvals.
Howden is a leading global provider of mission critical air and gas handling products and services. The Company’s products enable its customers’ vital processes which advance a more sustainable world. Based in Renfrew, Scotland, Howden has over 160 years of heritage as a world-class application engineering and manufacturing company with a presence in 35 countries. Howden manufactures highly engineered fans, compressors, heat exchangers, steam turbines, and other air and gas handling equipment, and provides service and support to customers around the world in highly diversified end-markets and geographies. More information can be found at www.howden.com
About KPS Capital Partners, LP
KPS, through its affiliated management entities, is the manager of the KPS Special Situations Funds, a family of investment funds with approximately $13.6 billion of assets under management (as of June 30, 2022). For over three decades, the Partners of KPS have worked exclusively to realize significant capital appreciation by making controlling equity investments in manufacturing and industrial companies across a diverse array of industries, including basic materials, branded consumer, healthcare and luxury products, automotive parts, capital equipment and general manufacturing. KPS creates value for its investors by working constructively with talented management teams to make businesses better, and generates investment returns by structurally improving the strategic position, competitiveness and profitability of its portfolio companies, rather than primarily relying on financial leverage. The KPS Funds’ portfolio companies currently generate aggregate annual revenues of approximately $21.6 billion, operate 232 manufacturing facilities in 27 countries, and have approximately 53,000 employees, directly and through joint ventures worldwide (as of June 30, 2022, pro forma for recent acquisitions and exits). The KPS investment strategy and portfolio companies are described in detail at www.kpsfund.com.
About Chart Industries, Inc.
Chart Industries, Inc. is a leading independent global manufacturer of highly engineered equipment servicing multiple applications in the Energy and Industrial Gas markets. The company’s unique product portfolio is used in every phase of the liquid gas supply chain, including upfront engineering, service and repair. Being at the forefront of the clean energy transition, Chart is a leading provider of technology, equipment and services related to liquefied natural gas, hydrogen, biogas and CO2 Capture amongst other applications. Chart is committed to excellence in environmental, social and corporate governance (ESG) issues both for its company as well as our customers. With over 25 global manufacturing locations from the United States to China, Australia, India, Europe and South America, Chart maintains accountability and transparency to its team members, suppliers, customers and communities. To learn more, visit www.Chartindustries.com.