L Squared Capital Partners, a private equity investment firm, has successfully completed the acquisition of Kano Laboratories, a leading provider of premium consumable chemical solutions primarily used in industrial maintenance, repair, and operations (MRO) applications. Founded in 1939, Kano is renowned for its flagship product, Kroil, a proprietary-formulated industrial penetrant that has garnered an unparalleled level of customer loyalty among professionals in high-cost-of-failure environments. This acquisition marks L Squared’s fourth platform investment from its Fund IV, a $840 million private equity fund that closed in April 2023.
The acquisition aligns perfectly with L Squared’s investment strategy, which focuses on identifying companies with niche specialty chemical products that hold significant growth potential but lack the resources to scale. L Squared recognizes that the market for specialty chemical solutions, such as Kano’s Super Lube product line, is fragmented, with many companies offering excellent value propositions but struggling to expand due to limited sales infrastructure. Kano has addressed this gap by building a robust go-to-market infrastructure, positioning itself as the partner of choice for these businesses.
Kano’s product portfolio is a key driver of its growth and reputation in the industrial sector. In particular, its Kroil brand has been a trusted solution for over 85 years, providing exceptional performance in loosening rusted, corroded, and frozen mechanical parts. The Kroil brand’s longstanding presence in high-demand industries has contributed to its loyal customer base, which spans industrial professionals, DIYers, and MRO specialists. Recently, Kano has expanded its market presence, introducing new product extensions and increasing its access points through a variety of go-to-market channels, including industrial distribution, e-commerce platforms, and retail outlets.
A notable development in Kano’s recent growth was its acquisition of Super Lube in January 2024. Super Lube is a premium, food-grade synthetic industrial grease and lubricant brand that has built strong relationships with customers in over 45 countries. Super Lube’s products are widely used for ongoing asset reliability and machine upkeep across industries requiring high-performance lubricants. This acquisition complements Kano’s existing product offerings, particularly in the repair and critical maintenance of equipment. With Super Lube’s premium reputation and Kano’s expanded sales infrastructure, the combined entity is well-positioned for future growth.
L Squared’s involvement in Kano’s growth strategy goes beyond the acquisition itself. The firm is committed to accelerating the company’s expansion, particularly through future acquisitions of niche, founder-owned industrial chemicals businesses. Randall Hunt, Managing Partner at L Squared, highlighted the fragmented landscape of specialty chemical products and emphasized the importance of Kano’s established sales infrastructure in scaling these businesses effectively. He expressed excitement about the opportunity to partner with Kano’s leadership to accelerate its growth trajectory through strategic acquisitions.
Kano’s CEO, Mark Klein, also expressed enthusiasm about the partnership with L Squared. He noted that the collaboration marks an exciting new chapter for Kano, providing access to valuable resources that will support its growth and facilitate the acquisition of additional niche chemical businesses when the time is right. This partnership is expected to drive Kano’s market presence and strengthen its position as a leader in the industrial chemicals sector.
The equity investment for this acquisition was led by L Squared’s Fund IV, with additional co-investment from select limited partners and participation from Kano’s executive leadership team. NXT Capital provided debt financing to support the acquisition. Skadden, Arps, Slate, Meagher & Flom LLP served as legal counsel to L Squared, while BMO Capital Markets acted as advisor and Kirkland & Ellis LLP served as legal counsel to Kano.
L Squared Capital Partners, headquartered in Newport Beach, California, manages over $2 billion in equity commitments and specializes in long-term investments in growth companies across targeted sectors such as Education Technology, Technology-Enabled Services & Software, and Industrial Technology & Services. L Squared’s approach to investment focuses on creating long-term value through revenue and earnings growth, rather than relying on financial engineering or market timing. The firm’s principals bring over 125 years of combined experience in growing private companies, making them well-positioned to support Kano’s continued growth and success.
Kano Laboratories, based in Nashville, Tennessee, continues to be a leading producer of industrial-grade lubricants and penetrating oils, including its well-known Kroil brand. The company’s acquisition of Synco Chemical Corporation and its Super Lube line of premium synthetic lubricants strengthens its portfolio and enhances its product offering in the industrial market. For more information on Kano Laboratories and its products,
This acquisition is a testament to L Squared Capital Partners’ strategic investment approach and its commitment to fostering growth in niche, high-potential markets. The partnership between L Squared and Kano positions the company for continued success in the industrial chemicals sector, benefiting from an expanded product portfolio, increased market presence, and enhanced infrastructure.
