How does a public company run a search-fund program (Kingsway KSX)?

What is Kingsway and why does it matter to a small holding company?

Kingsway is a Delaware holding company with U.S. operating subsidiaries. On May 19, 2026 it changed its name to Kingsway Corporation and its NYSE ticker to KWY, after 99.7% shareholder support at its annual meeting, according to its May 2026 Form 8-K release. It calls itself the only publicly traded U.S. company employing the search fund model. That is the company’s own description.

It matters because it answers a question most searchers never ask: what if the parent is public and the search is a standing program? The company reports two segments, KSX and Extended Warranty. Its 2025 Kingsway FY2025 Form 10-K says the first searcher was hired in May 2020.

How does the program work?

The 10-K describes these features:

• Kingsway employs operators-in-residence, called searchers, whose job is to find a business and then run it.
• The target is a privately held business with $1 million to $3 million of EBITDA whose owner wants to step back from daily work.
• After a purchase, the searcher becomes CEO of that company.
• Searchers receive stock-based grants in the acquired company, with time and performance vesting.
• Kingsway had three full-time searchers at December 31, 2025.
• The 2025 acquisitions were paid with cash on hand, bank term loans (Roundhouse and Southside Plumbing) and, for two plumbing deals, seller notes. The risk factors describe acquisition financing as non-recourse to other Kingsway entities.

The 10-K does not describe a separate outside investor fund or give the searchers’ equity percentages. I have not assumed any. The first searcher found Ravix, which Kingsway bought in October 2021, about 17 months after the hire. On August 3, 2026 the company announced that Fletcher Vynne had joined as its newest operator-in-residence, per a company release.

What did it do, by the numbers?

Each figure is as reported by the company.

• 2025 full year: total revenue $135.0 million (2024: $109.4 million). KSX revenue $64.2 million (2024: $40.5 million). KSX adjusted EBITDA $9.5 million (2024: $6.7 million). Extended Warranty revenue $70.8 million, adjusted EBITDA $3.1 million (2024: $7.5 million). Source: the Kingsway fourth quarter and full year 2025 release.
• Second quarter 2026: KSX revenue $22.3 million (Q2 2025: $13.3 million), adjusted EBITDA $4.3 million (Q2 2025: $2.4 million). KSX trailing-twelve-month adjusted EBITDA $12.9 million against $7.6 million a year earlier. Source: the second quarter 2026 release.
• Portfolio: ten KSX subsidiaries named in the 10-K, including Ravix (bought October 2021), Roundhouse Electric (July 1, 2025, about $22.7 million in cash and phantom equity awards per the 10-K, with an $11.0 million bank term loan) and three plumbing companies (2025).
• Debt: short-term and long-term debt of $67.3 million on the balance sheet at June 30, 2026, per the second quarter Form 10-Q.
• Plan: management reaffirmed a target of three to five acquisitions in 2026.

What worked, and what is unproven?

The company reported that KSX revenue grew 58.5% in 2025 and KSX adjusted EBITDA grew 40.8%, with acquisitions contributing. The company also reported that Extended Warranty adjusted EBITDA fell from $7.5 million to $3.1 million, so the second segment did not grow alongside KSX. The company’s Q1 2026 release also lists net debt of $63.9 million at March 31, 2026 and a consolidated net loss of $2.2 million for the quarter.

Two points remain open from the filings I read. The searchers’ returns are not disclosed. And the 10-K’s risk factors name concentration in specific businesses, for example Roundhouse’s exposure to the Permian Basin. Treat the growth as reported results, not proof that the model works at any size.

What does and does not transfer to a small holding company?

What transfers: a standing search program, searchers paid with equity in the business they run, and acquisition debt kept at the subsidiary level. These can be copied by a private holding company too.

What does not: a NYSE listing, a finance team that files quarterly and audited statements, and public reporting that puts any quarterly net loss in view. A holding company that is not yet listed has to build those first; see What finance team does a public holding company need?.

Worked numbers: what a KSX deal looks like

The company reported that Image Solutions bought Romeo Computer Company on August 1, 2026 for $2.4 million, with about $2.5 million of unaudited pro forma annual revenue and $0.5 million of pro forma adjusted EBITDA. The price is 4.8 times pro forma adjusted EBITDA ($2.4M / $0.5M) and about 0.96 times revenue ($2.4M / $2.5M). Compare KSX as a whole: 2025 adjusted EBITDA of $9.5 million on $64.2 million of revenue is a 14.8% margin.

Where these numbers come from: All Kingsway figures are the company’s own, from the Kingsway FY2025 Form 10-K, the Kingsway fourth quarter and full year 2025 release, the second quarter 2026 release, the Q1 2026 release and the Form 10-Q. The ratios are my arithmetic.

Related questions

Is Kingsway a search fund?

Not in the traditional sense. It describes its model as a search fund approach inside a listed company, with searchers as employees.

Does the searcher own the company?

The searcher gets stock-based grants in the acquired company that vest over time and on performance. The filing does not give the percentage.

Could a private holding company copy this?

Yes, without the listing. It needs capital, a source of searchers and a plan for what the searcher earns.

What comes next

To see how a company moves from one deal toward a listing, read From one acquisition to a listed serial acquirer: what are the milestones?.

Related articles

• Can a search fund become a public company?
• From one acquisition to a listed serial acquirer: what are the milestones?
• What is a serial acquirer, and how is it different from a roll-up?
• ETA, search fund, independent sponsor or holding company: what's the difference?
• How do you build a holding company for acquisitions?

Meraki Dealmakers is a service of Meraki Partners, LLC, an advisory firm. It is not a broker-dealer, investment adviser, business broker, law firm or accounting firm. This article is general information, not legal, tax or investment advice.