Investment Approach

Case Study : United States Infrastructure Corp

Kohlberg’s unique combination of strategic vision and execution acumen enabled my team and me to create the first independent platform of scale in a traditionally insourced market through the simultaneous carve-out of two divisions from separate companies. "

Michael Stayton - Chief Executive Officer
Company Description:

United States Infrastructure Corporation ("USIC") is a leading provider of infrastructure locating services, which involve the location and marking of subsurface structures for utility companies prior to the commencement of construction or excavation.  Kohlberg created USIC through the simultaneous carve-outs and combination of two leading underground utility locating competitors: SM&P Utility Resources, Inc., a division of the Laclede Group; and Central Locating Services, Ltd., a division of the Asplundh Tree Expert Company. 


Compelling Situation:

  • Kohlberg created the overwhelming market leader by combining the companies
  • Stable, growing outsourced services sector where providers with regional scale benefit from route density, labor efficiencies and customer synergies
  • Simultaneous structuring and completion of two divisional carve-outs increased complexity of the transaction, limiting competitive dynamics and leveraging Kohlberg’s extensive carve-out execution skills


    Kohlberg Actions:

    • Partnered with Michael Stayton, a former CEO of SM&P and with whom Kohlberg had a 10-year relationship, to develop a strategic plan for USIC
    • Realized significant integration savings
    • Optimized overlapping footprint to drive density and margin expansion
    • Increased EBITDA through improved route density, labor productivity, locator tenure and implementation of GPS
    • Leveraged the company’s market leadership to build share and profitability


      Results

      • Eclipsed five-year growth targets in just 18 months
      • EBITDA increased 65% from 2008 to 2009
      • Sold in early 2010




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        Photography courtesy of C. Bernstein & MGF