Ashland’s 19-Year Bet on KBK Industries Yields a 118x Return

CHICAGO, IL – January 27, 2026 – In a transaction that stands as a testament to long-term investment strategy, Chicago-based private investment firm Ashland Capital Partners has announced the sale of KBK Industries, a premier manufacturer of specialty tanks. The deal concludes a highly successful 19-year partnership and has delivered extraordinary returns, underscoring the power of patient capital in the industrial sector.

The buyer has been identified as TerraVest Industries Inc. (TSX:TVK), a Canadian diversified industrial company, which acquired the Houston-based manufacturer for US$90.0 million in cash. The sale generated a staggering 118-times multiple of invested capital (MOIC) and a 45.5% annual internal rate of return (IRR) for Ashland, figures that defy typical private equity exit timelines and expectations.

A Masterclass in Patient Capital

The sale of KBK Industries is a landmark event for Ashland Capital Partners, perfectly encapsulating its core philosophy. While many private equity firms operate on a 3-to-7-year hold period, Ashland’s 19-year stewardship of KBK, which began in 2006, highlights a different model focused on sustained growth and deep partnership.

“We are incredibly proud of what we have accomplished together with the KBK team over the last 19 years,” said Jim Lynch, Founder and Chairman at Ashland Capital Partners, in a statement. “Our long-term investment in KBK exemplifies Ashland’s philosophy of patient capital and partnership. We didn’t just buy a business; we invested in people and infrastructure to build a market leader.”

This approach involves acting as a long-term steward for lower-middle-market industrial businesses, reinvesting earnings for growth, and preserving the unique culture of each company. Rather than managing towards a fixed exit date, Ashland focuses on long-term compounding and value creation. The firm's portfolio includes nine other industrial businesses, some of which have also been held since 2006, demonstrating a consistent commitment to this strategy. The remarkable 118x MOIC on the KBK investment provides a powerful validation of this less-traveled path in private equity.

The Industrial Engine: KBK Industries' Growth Story

Founded in 1975, KBK Industries has carved out a vital niche as a manufacturer of fiberglass and steel tanks and sophisticated separation equipment. Headquartered in Houston, with key manufacturing facilities in Kansas, the company serves a broad array of essential industries, including energy, chemical, agriculture, and wastewater management. Its products are critical infrastructure components, from fuel and agricultural storage tanks to complex, patented systems for separating oily water and suspended solids.

Under Ashland’s long-term ownership, KBK significantly scaled its manufacturing capabilities and solidified its reputation for quality and innovation. The partnership provided the resources for growth while allowing KBK to maintain its operational focus and customer-centric values. This strategy enabled KBK to become a "one-stop shop" for many clients, offering a comprehensive suite of both above-ground and underground tank solutions designed by in-house engineering teams.

“This announcement marks an exciting new chapter for KBK Industries,” said Steven White, CEO of KBK. “Ashland Capital Partners has been an exceptional partner, providing the strategic resources and autonomy needed to grow while staying true to our core values of quality manufacturing and customer service.” The enduring support of KBK’s founder, Bill Baalmann, who remained a Limited Partner after the 2006 acquisition, further illustrates the collaborative nature of the partnership.

A Strategic Acquisition in a Consolidating Market

The acquisition by TerraVest Industries for US$90.0 million, representing approximately 5.6 times KBK's trailing twelve-month EBITDA, signals strong strategic interest in the specialty industrial manufacturing sector. For TerraVest, a Canadian company specializing in a range of industrial products, the deal is a significant move to expand its footprint in the U.S. tank market.

KBK's operations are highly complementary to TerraVest's existing businesses, including its Canadian fiberglass tank operations and its Composite USA subsidiary in Maryland. The acquisition provides TerraVest with valuable geographical diversification, helping to mitigate cross-border tariff exposure and strengthen its competitive position across North America. It also opens up new avenues in markets where KBK has a strong presence, such as the convenience store sector. This move reflects a broader trend of consolidation within niche industrial markets, where established players seek to acquire specialized expertise and expand their geographic reach.

The Financial Architecture of a Two-Decade Success

The success of the KBK investment was also built on the foundation of another long-term financial partner, Main Street Capital Corp. (NYSE: MAIN). The Houston-based investment firm was instrumental from the beginning, leading the majority recapitalization of KBK back in January 2006.

Main Street’s initial investment included $5.75 million in senior secured term debt and a direct equity investment of just $250,000. Over the two-decade holding period, Main Street provided crucial follow-on capital to fuel KBK’s growth. Upon the sale to TerraVest, Main Street’s patience was rewarded handsomely. The firm realized a $17.3 million gain on its equity, which, when combined with $25.1 million in cumulative dividends, generated an astonishing 127.2% IRR and a 62.7x multiple on its equity investment.

The combined success of Ashland and Main Street demonstrates a powerful synergy between a patient private equity sponsor and a flexible capital provider. Their shared long-term vision allowed KBK Industries to not only survive but thrive, evolving into a market leader ready for its next chapter with TerraVest and leaving behind a legacy of exceptional value creation.