Kinderhook Industries Exits IAX Acquisition Corp.

Kinderhook Industries has sold of IAX Acquisition Corporation, parent company of Absorption Corp., to buyer J. Rettenmaier & Söhne Group. Terms were not released, though Kinderhook said that the deal resulted in a return of approximately 2.4x for Kinderhook Capital Fund III.

PRESS RELEASE
Kinderhook Industries, LLC (“Kinderhook”) announced today the sale of IAX Acquisition Corporation, parent company of Absorption Corp (the “Company”), to an affiliate of international strategic buyer J. Rettenmaier & Söhne Group (“JRS”). Financial terms of the transaction were not disclosed. Absorption Corp was a portfolio company of Kinderhook since 2010 and the sale, including prior distributions [1] will result in a return on invested capital of approximately 2.4x for Kinderhook Capital Fund III. The sale of Absorption Corp is the first realization in this fund.

Headquartered in Ferndale, WA, Absorption Corp is a manufacturer of sustainable organic fiber products primarily used for small-animal bedding and litter. The Company’s portfolio of premium brands includes CareFRESH®, Healthy Pet®, and CritterCare® and its products are sold at pet-specialty stores, mass merchandisers and grocery chains throughout North America, Europe and Australasia.

JRS is a leading manufacturer of high-quality sustainable organic fibers, made from plant raw material, for use in a broad range of applications within the pet care, food, nutrition, pharmaceutical, chemicals and construction industries. JRS’ pet care offerings include pet litter and pet bedding products. Rettenmaier supplies products to customers globally from its 23 facilities in 20 countries throughout the world.

“Absorption Corp is very pleased to be joining forces with J. Rettenmaier & Söhne as Absorption Corp enters its next phase of growth,” said Ted Mischaikov, CEO of Absorption Corp who will remain CEO of the Company post-acquisition. “The combination allows both companies to expand their geographic footprints, product offerings and distribution channels. Kinderhook’s guidance and support has been instrumental in getting Absorption Corp to this important day. Our partnership with Kinderhook has been tremendously beneficial to the Company and will continue to pay dividends for Absorption Corp for many years to come.”

“Kinderhook is very proud of the accomplishments of the Company’s management team and hard-working employees over the past three years,” said Tom Tuttle, Managing Director at Kinderhook. “Ted and his team have successfully expanded Absorption Corp’s market-leading bedding products into new channels and geographies, and launched several new, innovative products for the small animal market. Additionally, they have concurrently improved both product quality and company profitability, which is truly exceptional. Absorption Corp has a bright future ahead of it, especially under its new strategic partnership with JRS.”

Harris Williams & Company served as exclusive financial advisor. Kirkland & Ellis LLP served as legal counsel to Absorption Corp.

About Kinderhook Industries
Founded in 2003, Kinderhook Industries is a private equity firm with $770 million of committed capital and an investment philosophy based on combining senior management and operating experience in a variety of industries with the financial and investment know-how of private equity professionals. Kinderhook primarily makes control investments in companies with transaction values of $25-$100 million in which the firm can achieve significant financial, operational and growth improvements. The firm targets orphaned non-core subsidiaries of corporate parents, existing small capitalization public companies lacking institutional support and management-led recapitalizations of entrepreneur-owned companies. By providing access to capital, strategic advice and an extensive network of relationships, Kinderhook Industries has a history of successfully building privately held firms in partnership with management. For more information please visit: www.kinderhook.com

About Absorption Corp
Absorption Corp develops, manufactures and markets proprietary, cost-effective cellulose-based absorbent products for pets and industrial applications that are derived from sustainable reclaimed wood cellulose (pulp), a natural organic by-product of the pulp and paper manufacturing process. The Company’s proprietary, environmentally safe, non-toxic, lightweight products are utilized in a broad range of industrial, agricultural and consumer applications, including retail/commercial animal bedding, litter, oil and hazardous spill cleanup and control, oil/water filtration, and packaging. For more information please visit: www.absorptioncorp.com

About J. Rettenmaier & Sohne Group
JRS is a leading manufacturer of high-quality sustainable organic fibers, made from plant raw material, for use in a broad range of applications within the pet care, food, nutrition, pharmaceutical, chemicals and construction industries. JRS’ pet care offerings include pet litter and pet bedding products. The company supplies products to customers worldwide from its 23 facilities. JRS was founded in 1878 and is based in Rosenberg, Germany.