Kohler Co. to sell majority of its energy portfolio to California-based private equity firm

Kohler Co. plans to sell most of its energy division to a California-based private equity firm.

Kohler Energy will become an independent business separate from Kohler with investment firm Platinum Equity as the majority partner, the company announced this week.

While Sheboygan County-based Kohler is known for producing plumbing products, the energy division manufactures home and industrial energy systems like generators and transfer switches.

Kohler said it will continue to have a stake in the energy portfolio following the sale, which the company anticipates finalizing in the first half of 2024.

In a statement, the company’s Chief Executive Officer David Kohler called the sale a “bold and strategic” move that will support the future of the business.

“This important moment in our journey signifies our commitment to deepening the focus and investment in Kohler’s Kitchen & Bath and Hospitality businesses and continuing to drive growth within our respective industries,” he said. “​The timing is right due to the strength of the Energy business, which is driven by world-class products manufactured and sold by highly skilled associates.”

The businesses included in Kohler Energy are power systems, engines, home energy, Kohler Uninterruptible Power, Clarke Energy, Curtis Instruments and Heila Technologies.

United Auto Workers Local 833, which represents workers at Kohler Co., said on social media that the union was notified of the company’s plans to sell the majority of its ownership in the energy divisions.

“We will continue to keep our members updated as much as we can,” the union stated on Facebook Monday. “We have reached out to our International for support. No one jump to conclusions, please keep business as usual.”

Kohler officials declined to be interviewed for this story. In its announcement, the company said it selected Platinum Equity due to its “deep operational expertise and successful track record with carve-out transactions.”

Brian Melka, group president of Kohler Energy, said in a statement that Platinum Equity shares Kohler’s “values of quality, innovation and operational excellence.” He said Kohler’s immediate priority is to ensure a smooth transition.

“We expect to drive significant continued investment that increases value to our customers, team members, and shareholders,” Melka said.

In a statement, Platinum Equity Co-President Jacob Kotzubei said he appreciates Kohler Co.’s confidence in the private equity firm.

“We have great respect for David and the Kohler leadership team and are proud to be their partners,” Kotzubei said.

Platinum Equity was founded in 1995 and manages about $47 billion in assets. Even though Kohler is selling much of its energy portfolio, David Kohler will serve on the board of the energy business after the sale, and Melka, currently the group president, will serve as CEO.