Acquired in 2017 and exited in 2019, KGK Science provides efficient contract research services for nutraceutical and cannabis industry clients. At acquisition, KGK faced financial uncertainty that was ultimately tied to well-defined and improvable operational and sales deficiencies. Under CPS ownership, the company quickly improved its operational and financial situation, and capitalized on opportunities to expand by serving the rapidly growing cannabis industry.
KGK was sold to a strategic acquiror in 2019, returning investors 2.2x net cash-on-cash returns over 18 months of ownership (80% IRR). While the financial profile of KGK and short hold period are atypical of CPS’s approach to investing, this success story is testament to our ability to quickly and efficiently introduce meaningful improvements to the businesses we work with.
