Staff get enormous payouts after Minnesota Rubber and Plastics bought for $950 million

Tuesday’s all-hands meeting at the Minnesota Rubber and Plastics Club in Plymouth looked routine at first. Executives from New York investment firm KKR, the company’s main owner since 2018, appeared in front of hundreds of employees and announced they had sold it.

Then they quickly reminded employees that as participants in the employee stock ownership plan, they would receive a large payout of $950 million. USD transaction.

“Are you guys ready to get into it?” Pete Stavros, head of KKR’s Americas private equity division, asked as he began to explain the payout structure.

— Yes! they shouted back.

He said that the workers who started working at MRP this year would get three months annual salary. Each payout tier increased for employees with longer years of service, and for those who started before 2000, there was an increase of up to two years’ salary. Excitement grew as each tier was announced.

According to managers, the average payout was a year’s salary. “Our core philosophy is that everyone is involved in achieving good results,” Stavros said.

The buyer, Trelleborg, a Swedish engineering company, supplies premium plastics and polymers for use in the oil and gas, aerospace and construction industries.

“They look at MRP as an opportunity to create,” Stavros told employees. “It’s not a situation where they’re buying to cut. They’re buying to build.”

KKR bought MRP from Minneapolis-based Norwest Equity Partners and launched an employee ownership program. At that time, MRP had about 1,200 employees. Due to growth and additional acquisitions, the company now has approximately 1,450 employees.

KKR also purchased additional MRPs and invested in a new one $7 million Materials Innovation Center. Global employee turnover since 2018 until 2021 decreased by approximately 30%. Wages under the MRP increased by more than 6% annually.

“Today’s announcement is the culmination of a lot of hard work by our dedicated employees, and KKR’s shared ownership model has allowed all MRP colleagues to contribute to this success,” said MRP CEO Jay Ward. “Joining Trelleborg is an exciting opportunity to expand our global reach.

A KKR spokesperson said the average salary for an MRP in the United States is $50,000, and to help with employee benefits, they will provide prepaid personal financial training and tax preparation services to all employees.

KKR manages 491 billion USD assets and currently has 121 companies in the portfolio generating approximately USD 223 billion. USD annual income.

in 2011 it started implementing employee ownership and alignment programs and currently has 30 companies working with them. As a result, it has committed billions in total value to more than 45,000 non-senior employees across more than 25 companies.

MRP’s management team plans to stay after the deal with Trelleborg.

Trelleborg is listed on the Stockholm Stock Exchange and its shares have recently traded at near all-time highs, giving it a market capitalization of around 6 billion. Earlier this year, the company sold its agricultural and industrial tire unit to Yokohama Rubber Co. for $2.2 billion. USD, providing funds for acquisitions.

“They are strong in Europe. We are strong in the U.S. We have additional products and markets that we are targeting,” Stavros said. “The main message is that the management team remains in place. It’s business as usual.”

Reuters contributed to this report.

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