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Private-equity giant KKR KKR -1.37% & Co. aims to make big returns for its investors when it sells a company. Its latest deal will also deliver a serious payout for a different type of investor: the company’s workers.
KKR said Monday it would sell CHI Overhead Doors to steel producer Nucor Corp. NUE -2.91% for $3 billion including debt.
The private-equity firm, which paid more than $600 million for the garage-door maker in July 2015, is set to make 10 times the equity it put in. It will be KKR’s highest-returning U.S. buyout in more than 30 years.
Meanwhile, CHI’s hourly employees, including those who build and deliver its doors, will make between $20,000 and $800,000 apiece before taxes when the deal closes. In total, employees will get $360 million, with a substantial majority going to those below the C-suite level.
What happened at CHI is the result of a broad-based stock-ownership program KKR put in place when it bought the business. Employees received stock on top of their regular wages and benefits. No one making less than $100,000 was allowed to invest any of their own money.
It is a model that KKR has rolled out at all of its U.S. industrial holdings and is extending across its buyout portfolio. The effort is spearheaded by Pete Stavros, the firm’s co-head of private equity for the Americas. Mr. Stavros believes giving stock to lower-level employees financially elevates working...
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