Hipster Industries
With Koch, tech investments are it
Charles Koch is taking tech by inches.
Kansas-based Koch Industries — the conglomerate led by the libertarian 83-year-old billionaire whose support for the Americans for Prosperity Foundation helped to reshape the Republican Party — isn’t exactly a textbook Silicon Valley backer.
But in the past several months, Koch, whose similarly well-known younger sibling David retired last summer from business and political life due to health reasons, has been quietly investing in tech companies — but they’re not big chunks of Apple, Facebook and Google parent Alphabet.
Instead, Koch has begun taking stakes in smaller firms connected to sectors where it already has as a pres- ence — from refining and chemicals to and pulp-and-paper products like Brawny paper towels and Dixie cups.
“Charles Koch saw the tech threat coming many years ago,” Koch Industries Chief Financial Officer Steve Feilmeier said.
“He started pressing us about how every business was going to change. And he said we better apply tech to improve our businesses. We would rather be forward thinking than be a victim.”
Koch Industries, which generated $110 billion in revenue last year, has invested in more than 10 outside companies over the past five years, most of which are in the tech sector, Jim Hannan, chief executive of Koch’s enterprise companies, told The Post.
Those investments total more than $15 billion in equity, and now tech represents between 15 and 20 percent of Koch Industries’ value, Hannan said. Among Koch’s portfolio names are Phillips-Medsize, a subsidiary of Molex, which now makes a lowerpriced competitor to Mylan’s EpiPen.
Last year, Koch Industries shelled out $2.5 billion for a 45 percent stake in Infor, a New York-based software giant. In turn, Koch has started to run some of its operations with new Infor software, employing both its financial and human resources management software in the cloud.
Our investments in “tech are helping us to disrupt all our businesses” before outsiders get in and do the job for us, Hannan said.
“They’ve made a name for themselves in tech,” said one bank insider. “They are on my relatively short list of buyers to call when I am on a sell-side process and looking for a financial buyer.”