Kohlberg & Company's Acquisition of Engage PEO: A Game-Changing Move for HR Outsourcing

In a strategic partnership that promises to provide a critical competitive advantage, Kohlberg & Company, LLC ("Kohlberg") has announced its acquisition of a majority stake in Engage PEO ("Engage"), a leading professional employer organization ("PEO") in the U.S. The move will see Kohlberg partner with existing investor Lightyear Capital LLC and the Engage management team to drive further growth for the company.

Engage PEO, founded in 2011 by CEO Jay Starkman, has distinguished itself by focusing on the client experience and delivering quality service across all aspects of the organization. Its innovative business model and unique approach to HR delivery have allowed Engage to create a partnership with brokers and agents, resulting in added value for mutual clients.

In today's talent-focused environment, Engage has successfully guided its clients through the complex HR and regulatory landscape. The company has improved HR and safety functions' efficiency and cost-effectiveness, ensured compliance with a myriad of regulations, and provided access to a comprehensive suite of HR benefits and services. All of these efforts help clients become employers of choice and drive significant cost savings.

Jay Starkman, CEO of Engage, expressed his excitement about the partnership with Kohlberg, stating, "The Kohlberg team brings substantial value to Engage's growth strategy, specifically with their deep network and experience across the insurance brokerage channel, as well as their track record partnering with management teams to accelerate organic and M&A driven growth."

Kohlberg, with a 36-year history of successful investments, has a strong focus on financial and outsourced business services. Alex Forrey, Managing Director at Kohlberg & Company, highlighted Engage's differentiated PEO service offering, describing it as a solution to the critical issues businesses face in today's complex operating environment. Kohlberg aims to collaborate with Engage to drive organic growth and strengthen its transformative M&A strategy.

Lightyear Capital LLC, an existing investor in Engage, remains a partner in the business. Mark Vassallo, Managing Partner of Lightyear, expressed excitement about the investment, saying, "Our successful investment in Engage has expanded our thesis into the broader human capital management sector. We are excited to remain a partner in the business and to continue to capitalize on the strong industry tailwinds."

The terms of the transaction were not disclosed in the press release.

Engage PEO, headquartered in Fort Lauderdale, FL, is a market-leading national PEO. It holds licenses in all states with licensing requirements and serves clients across all 50 states. Engage's unique service delivery model involves HR services delivered by licensed attorneys. The company also partners with insurance brokers and agencies to optimize its go-to-market strategy.

Kohlberg & Company, based in Mount Kisco, New York, is a leading U.S. middle-market private equity firm. With over 36 years of experience, Kohlberg has organized 11 private equity vehicles, totaling over $14 billion in aggregate. The firm's investments have generated over $10 billion in realized returns since its inception.

Lightyear Capital LLC, a New York-based private equity firm, focuses on partnering with growing companies in financial services and technology, healthcare, and business services. With over 20 years of experience, Lightyear leverages its industry expertise, network of advisors, and operating resources to accelerate growth and build market-leading businesses.

In summary, Kohlberg & Company's acquisition of a majority stake in Engage PEO represents a significant milestone for both companies. The strategic partnership aims to leverage the unique value proposition of Engage's PEO services to drive growth and capitalize on the strong industry tailwinds in the HR outsourcing sector. Combining Kohlberg's deep network and experience with Engage's client-centric approach, the partnership sets the stage for continued success and further expansion in the market.